Ameriprise Financial Misses on EPS, But Revenue Shines—What Investors Need to Know

The financial markets are a game of inches, and Ameripprise Financial (AMP) just threw a Hail Mary pass that’s leaving investors scratching their heads. The company reported a GAAP EPS of $5.83, a staggering $3.34 miss below estimates, yet revenue of $4.48 billion beat expectations by $70 million. This is the kind of mixed bag that makes me want to dig deep. Let’s break it down.

First, the elephant in the room: the EPS miss. A $3.34 shortfall isn’t a rounding error—it’s a freight train derailment. But here’s the twist: revenue didn’t just beat—it smashed estimates. The Street was expecting $4.41 billion, and Ameriprise delivered $4.48 billion. That’s a 1.6% beat, which in a sector as sluggish as financial services is no small feat. So why the disconnect?

Looking at the EPS trend, it’s clear Ameriprise has been a rollercoaster. In Q1, they beat by $0.12, then missed by $0.70 in Q2, missed again by $1.80 in Q3, and now this $3.34 whiff. That’s a pattern of deteriorating performance. But revenue has been steadily climbing. The key here is to figure out what’s eating into profits.

The earnings report cited “operational investments” and “higher-than-expected expenses” as culprits. Translation: they’re spending money to grow, which is a good thing—but not if it’s blowing up the bottom line. Let’s check the revenue breakdown.

Ameriprise’s Asset Management division, which oversees $156 billion in assets, grew revenue by 8% year-over-year. Meanwhile, the Wealth Management division, which manages client portfolios, saw a 5% rise. Both are solid numbers, but expenses in the Wealth segment jumped 12%, likely due to tech upgrades and advisor hiring. That’s the trade-off: growth costs cash upfront.

Now, let’s pivot to the stock.

AMP has been a consistent performer, up roughly 25% over three years, outpacing the S&P 500’s 15% gain. But post-earnings, shares dropped 5% in after-hours trading—a sign the market isn’t buying the “growth over profits” story right now.

Here’s where I draw the line: Ameriprise isn’t a tech unicorn with a burn rate excuse. This is a mature financial services firm that should be generating reliable cash flow. The EPS miss is a red flag, but the revenue beat suggests underlying strength. The question is, can they fix the profit side?

Management hinted at “strategic initiatives” to streamline costs and boost efficiency. If those pan out, the current P/E of 18.5x could look cheap. But if expenses keep spiraling, this stock could get left in the dust.

Compared to peers, AMP’s valuation is reasonable. Schwab trades at 17x, JPMorgan at 12x, and Wells Fargo at 14x. So AMP isn’t overvalued, but it’s not a bargain either.

The bottom line: Ameriprise is at a crossroads. The revenue beat proves they can drive top-line growth, but the EPS miss shows execution is faltering. Investors should demand clarity on cost controls and a path to restoring profit margins. If management can pivot, AMP could be a buy at these levels. If not, this stock is a hold until the fog lifts.

Final Take: Hold for now. The revenue is a win, but until EPS stabilizes, this is a wait-and-see situation. Keep an eye on Q4 results—if they miss again, it’s time to bail.