Moelis & Company (NYSE:MC) Announces Earnings Results, Beats Estimates By $0.01 EPS

Moelis & Company (NYSE:MC) issued its quarterly earnings results on Wednesday. The asset manager reported $0.63 EPS for the quarter, beating analysts’ consensus estimates of $0.62 by $0.01, FiscalAI reports. Moelis & Company had a return on equity of 38.94% and a net margin of 14.46%.The firm had revenue of $409.39 million during the quarter, compared to the consensus estimate of $387.27 million.

Here are the key takeaways from Moelis & Company’s conference call:

• Record results and strong pipeline: Second-quarter revenue rose 12% year over year to $409 million, while first-half revenue increased 9% to $729 million. Management said the announced pipeline was up more than 80% year over year and the total pipeline reached a record level entering the second half.
• Non-M&A businesses are expanding: Capital markets and private capital advisory drove much of the growth, with both producing record first-half revenue. Moelis is adding capabilities in debt and private credit, securitization, GP-led and LP-led secondaries, and promoted co-investments.
• Profitability and shareholder returns improved: The adjusted compensation ratio declined to 65.8% from 69% a year earlier, while adjusted pretax margins increased to 18.6% in the quarter and 17% for the first half. The firm returned approximately $246 million to shareholders in the first half through dividends and repurchases and ended the quarter with $481 million in cash and no debt.
• M&A recovery remains uneven: Management characterized the broader M&A cycle as being in its early stages, supported by scale requirements, technology disruption and sponsor portfolio exits. However, sponsor engagement has not yet translated into broad middle-market exits because some portfolio companies have not reached valuations that support targeted returns.
• Investment and market risks remain: Capital structure advisory revenue declined, while non-compensation expenses are expected to remain in the mid-to-high $60 million range per quarter due to higher deal activity, underwriting costs, technology and AI investment. Executives also noted that AI could disrupt certain software companies and create additional liability-management needs.

Moelis & Company Trading Down 4.7%

NYSE MC traded down $3.25 on Wednesday, hitting $65.34. 1,245,349 shares of the stock traded hands, compared to its average volume of 1,097,144. The stock has a 50-day moving average of $67.15 and a 200 day moving average of $65.40. Moelis & Company has a twelve month low of $51.06 and a twelve month high of $78.22. The company has a market capitalization of $5.13 billion, a P/E ratio of 23.51, a price-to-earnings-growth ratio of 0.86 and a beta of 1.85.

Wall Street Analysts Forecast Growth

A number of brokerages have issued reports on MC. UBS Group reaffirmed a “sell” rating and issued a $60.00 target price (up from $58.00) on shares of Moelis & Company in a research report on Wednesday, July 8th. Wall Street Zen downgraded shares of Moelis & Company from a “hold” rating to a “sell” rating in a research report on Saturday, May 2nd. Morgan Stanley dropped their price target on shares of Moelis & Company from $90.00 to $83.00 and set an “overweight” rating for the company in a research note on Thursday, April 9th. Keefe, Bruyette & Woods cut their price target on shares of Moelis & Company from $69.00 to $66.00 and set a “market perform” rating on the stock in a report on Friday, July 10th. Finally, Weiss Ratings downgraded shares of Moelis & Company from a “hold (c+)” rating to a “hold (c)” rating in a research note on Tuesday, May 26th. Two investment analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat, the stock presently has a consensus rating of “Hold” and an average target price of $73.38.

Institutional Investors Weigh In On Moelis & Company

A number of institutional investors have recently made changes to their positions in the company. Wasatch Advisors LP raised its position in shares of Moelis & Company by 3.9% during the 4th quarter. Wasatch Advisors LP now owns 3,432,623 shares of the asset manager’s stock valued at $235,959,000 after acquiring an additional 128,443 shares in the last quarter. Charles Schwab Investment Management Inc. boosted its holdings in Moelis & Company by 2.1% in the fourth quarter. Charles Schwab Investment Management Inc. now owns 3,194,479 shares of the asset manager’s stock worth $219,588,000 after purchasing an additional 66,697 shares during the period. State Street Corp increased its stake in Moelis & Company by 3.2% during the second quarter. State Street Corp now owns 2,862,337 shares of the asset manager’s stock valued at $178,381,000 after purchasing an additional 89,143 shares during the last quarter. Ameriprise Financial Inc. increased its stake in Moelis & Company by 6.0% during the second quarter. Ameriprise Financial Inc. now owns 2,396,230 shares of the asset manager’s stock valued at $149,333,000 after purchasing an additional 135,885 shares during the last quarter. Finally, Dimensional Fund Advisors LP increased its stake in Moelis & Company by 9.5% during the fourth quarter. Dimensional Fund Advisors LP now owns 1,216,644 shares of the asset manager’s stock valued at $83,641,000 after purchasing an additional 105,185 shares during the last quarter. 91.53% of the stock is currently owned by institutional investors.

About Moelis & Company

Moelis & Co operates as a holding company. It engages in the provision of financial advisory, capital raising and asset management services to a client base including corporations, governments, sovereign wealth funds and financial sponsors. The firm focuses on clients including large public multinational corporations, middle market private companies, financial sponsors, entrepreneurs and governments. The company was founded by Kenneth David Moelis, Navid Mahmoodzadegan, Jeffrey Raich and Elizabeth Ann Crain in July 2007 and is headquartered in New York, NY.