Why Is Moelis (MC) Up 9.5% Since Last Earnings Report?
A month has gone by since the last earnings report for Moelis (MC). Shares have added about 9.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Moelis due for a pullback? 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 drivers.
Moelis & Company Q3 Earnings Top, Revenues & Costs Down
Moelis & Company’s third-quarter 2022 adjusted earnings per share of 37 cents handily surpassed the Zacks Consensus Estimate of 32 cents. The bottom line, however, reflects a plunge of 79% from the prior-year quarter.
Results largely benefited from a decrease in expenses. Also, the company had a solid liquidity position in the reported quarter. However, lower revenues were the headwind.
Net income (GAAP basis) was $28.6 million, down 80% from the prior-year quarter.
Revenues & Expenses Decline
Total revenues (GAAP basis) tanked 52% year over year to $233.5 million. The fall was primarily due to fewer transaction completions. The top line beat the Zacks Consensus Estimate of $208.4 million.
Total operating expenses (GAAP basis) were $198.5 million, down 41%. The fall was due to a decline in compensation and benefits costs.
Other income (GAAP basis) was $2.6 million in the reported quarter compared with other income of $30.4 million in the prior-year quarter.
As of Sep 30, 2022, the company had cash and liquid investments of $340.9 million, with no debt or goodwill.
Share Repurchase Update
During the reported quarter, Moelis & Company repurchased 0.6 million shares for $13.5 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Moelis has a subpar Growth Score of D, a grade with the same score on the momentum front. 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 D. 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 looks promising. Notably, Moelis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Moelis belongs to the Zacks Financial - Investment Bank industry. Another stock from the same industry, Evercore (EVR), has gained 11.6% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
Evercore reported revenues of $576.94 million in the last reported quarter, representing a year-over-year change of -30%. EPS of $2.20 for the same period compares with $3.96 a year ago.
Evercore is expected to post earnings of $1.99 per share for the current quarter, representing a year-over-year change of -72.2%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Evercore has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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