What Happened?
Shares of independent financial services firm LPL Financial (NASDAQ: LPLA) jumped 10.2% in the afternoon session after the company reported third-quarter results that surpassed analyst expectations on several key metrics. The wealth management firm posted adjusted earnings of $5.20 per share, a 25% increase from the prior year and well ahead of the $4.49 consensus estimate. Revenue also impressed, growing 48.4% year-over-year to $4.55 billion, beating forecasts. While the company reported a small pre-tax loss on a GAAP basis, investors appeared to focus on the strong underlying business momentum. This was highlighted by its assets under management (AUM), which surged 48.9% year-over-year to $2.3 trillion, also easily clearing Wall Street's expectations. The strong performance in adjusted earnings, revenue, and asset growth fueled investor optimism.
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What Is The Market Telling Us
LPL Financial’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. But moves this big are rare even for LPL Financial and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was about 2 months ago when the stock dropped 6.3% as a broad market sell-off triggered by a dismal August jobs report signaled a slowing economy. The U.S. economy added only 22,000 nonfarm payrolls, a figure substantially below the forecasted 75,000, while the unemployment rate ticked up to 4.3%, its highest level since 2021. This unexpected weakness in the labor market led to a downturn in major indices like the S&P 500 and Dow Jones Industrial Average.
LPL Financial is up 14.2% since the beginning of the year, and at $374.60 per share, it is trading close to its 52-week high of $399 from July 2025. Investors who bought $1,000 worth of LPL Financial’s shares 5 years ago would now be looking at an investment worth $4,652.
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