If You Like Cash Flow Machines Take A Look At SSNC

July 31st, 2025 by Trefis Team
SSNC: SS&C Technologies logo
SSNC
SS&C Technologies

Here is why we think SS&C Technologies (SSNC) is worth a look

  • Not many stocks offer free cash flow yield of 6.0%, but SSNC does
  • Last 12 month revenue growth of 6.9% and operating margin of 23.0% show good fundamentals
  • At PE of 24.9, this combo of cash yield, growth, and margin could get noticed
  • Compared to S&P, while you get higher valuation, you further get higher LTM growth, and better margins

SS&C Technologies provides software and services for financial and healthcare industries, covering securities accounting, trading, portfolio management, and healthcare solutions across global markets.

SSNC S&P Median
Sector Information Technology –
Industry Application Software –
Free Cash Flow Yield 6.0% 3.9%
Revenue Growth LTM 6.9% 5.0%
Revenue Growth 3YAVG 5.3% 5.9%
Operating Margin LTM 23.0% 18.8%
Operating Margin 3YAVG 22.2% 17.5%
PE Ratio 24.9 23.8

That is one way to look at stocks. Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure

The Point? The Market Can Notice, And Reward

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Here are some stocks that showed strong cash flow yield in mid 2024, and saw strong returns in the subsequent 12 months

  • FFIV gained 70% in a year after showing a 6.9% free cash flow yield
  • CSCO had 6.6% yield, and returned 50% in the next 12 months
  • PM rose over 85% percent as the market noticed its 5.7% free cash flow yield and good underlying growth

But Consider The Risk

That said, SSNC isn’t immune to sharp sell-offs. It fell about 36% during the 2018 correction, nearly 48% through the Covid pandemic, and around 44% in the recent inflation shock. Even with strong fundamentals, the stock has shown significant vulnerability when broader market turmoil hits. Bottom line: favorable factors matter, but steep dips can still happen.

Picking winners on a consistent basis is not an easy task – especially given the volatility associated with a single stock. Instead, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.