T. Rowe Price trades at $105.62 per share and has stayed right on track with the overall market, gaining 13.3% over the last six months. At the same time, the S&P 500 has returned 15.3%.

Is there a buying opportunity in T. Rowe Price, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free for active Edge members.

Why Is T. Rowe Price Not Exciting?

We're sitting this one out for now. Here are two reasons there are better opportunities than TROW and a stock we'd rather own.

1. Long-Term Revenue Growth Disappoints

Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years.

Unfortunately, T. Rowe Price’s 3.9% annualized revenue growth over the last five years was sluggish. This fell short of our benchmark for the financials sector.

2. EPS Barely Growing

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

T. Rowe Price’s EPS grew at a weak 1.5% compounded annual growth rate over the last five years, lower than its 3.9% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

Final Judgment

T. Rowe Price isn’t a terrible business, but it isn’t one of our picks. That said, the stock currently trades at 10.2× forward P/E (or $105.62 per share). While this valuation is reasonable, we don’t really see a big opportunity at the moment. We're pretty confident there are superior stocks to buy right now. We’d recommend looking at one of our all-time favorite software stocks.

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