It has been about a month since the last earnings report for Voya Financial (VOYA). Shares have lost about 3.1% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Voya due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Voya Financial Q4 Earnings Beat, Revenues & Premiums Rise Y/Y

Voya Financial, Inc. reported fourth-quarter 2024 adjusted operating earnings of $1.50 per share, which beat the Zacks Consensus Estimate by more than two-fold. The bottom line decreased 23.8% year over year. The decline was due to higher loss ratios in Stop Loss in Health Solutions and lower spread-based assets in Wealth Solutions. It was partially offset by growth in fee-based revenues in Wealth Solutions and Investment Management and higher alternative investment income.

Behind the Headlines

Adjusted operating revenues amounted to $1.9 billion, which increased 12.5% year over year. Net investment income decreased 0.2% year over year to $521 million. Meanwhile, fee income of $543 million increased 11% year over year. Premiums totaled $790 million, up 17.4% from the year-ago quarter. Total benefits and expenses were $1.8 billion, up 10% from the year-ago quarter. As of Dec. 31, 2024, VOYA’s assets under management and assets under administration and advisement totaled $893.5 million.

Segmental Update

Wealth Solutions recorded adjusted operating earnings of $210 million, which increased 42.8% year over year. The increase was primarily due to growth in fee-based revenues, higher alternative investment income and disciplined expense management, partially offset by lower spread-based assets. Full-service recurring deposits grew 10.7% to $3.8 billion, driven by growth in both Corporate and Tax-Exempt markets.

Health Solutions incurred pre-tax adjusted operating loss of $102 million against the year-ago period’s earnings of $44 million. The decline was primarily attributable to higher loss ratios in Stop Loss. Annualized in-force premiums and fees grew 16% to $3.9 billion on growth across all product lines due to strong sales and favorable retention.

Investment Management posted pre-tax adjusted operating earnings, excluding Allianz's noncontrolling interest, of $66 million, which increased 46.7% year over year. The increase was primarily due to higher fee-based revenues benefiting from strong business momentum, positive capital markets and performance fees. It was partially offset by higher variable compensation. Investment Management generated net inflows of $3.4 billion (excluding divested businesses) during the three months ended Dec. 31, 2024, representing organic growth of 1.1% for the reported quarter. Net flows reflect continued growth in the Insurance channel and further positive flows within Retail.

Corporate incurred pre-tax adjusted operating losses, excluding Allianz's noncontrolling interest, of $27 million, narrower than a loss of $34 million incurred in the year-ago quarter.

Financial Update

Voya Financial exited the quarter with cash and cash equivalents of $1.4 billion, which increased 49.3% year over year. Total investments amounted to $35 billion, down 4.3% year over year. Long-term debt at quarter-end was $2.1 billion, up 0.2% from 2023-end. The financial leverage ratio, excluding AOCI, deteriorated 250 basis points year over year to 30.3%. As of Dec. 31, 2024, book value per share (excluding AOCI) was $61.31, which increased 5.4% year over year. As of Dec. 31, 2024, Voya Financial had approximately $0.6 billion of excess capital.

Capital Deployment

Voya Financial returned $800 million of excess capital to shareholders in 2024, including through $140 million of share repurchases and $43 million of dividends in the reported quarter. As of Dec. 31, 2024, VOYA had a remaining share repurchase authorization of $761 million.

Full-Year Highlights

Full-year 2024 adjusted operating earnings per share of $7.79 decreased 3% year over year. The bottom line beat the Zacks Consensus Estimate by 17.3%. 
Adjusted operating revenues jumped 9.7% from the year-ago quarter to $7.5 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -9.09% due to these changes.

VGM Scores

At this time, Voya has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Voya has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.

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Voya Financial, Inc. (VOYA) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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