Category: MC

MC – Moelis (MC) Up 1.8% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Moelis (MC Free Report) . Shares have added about 1.8% in that time frame, outperforming 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 Q2 Earnings Beat as Revenues Improve Significantly

Moelis & Company recorded second-quarter 2021 adjusted earnings per share of $1.19, surpassing the Zacks Consensus Estimate of 82 cents. In the prior-year quarter, the company recorded a loss per share of 11 cents.

Results were driven by a substantial improvement in revenues. Moreover, the company had a solid liquidity position in the reported quarter. However, a rise in expenses was the undermining factor.

Net income (GAAP basis) was $93.2 million or $1.17 per share against a net loss of $9 million or 10 cents per share recorded in the prior-year quarter.

Revenues Improve Significantly, Expenses Rise

Total revenues jumped significantly year over year from $159.9 million to $360.9 million. The top line outpaced the Zacks Consensus Estimate of $268 million.

Total operating expenses (adjusted basis) were $242.7 million, up 37% year over year. The rise was due to an increase in both compensation and benefits costs, and non-compensation costs.

Other income was $2.8 million against other expenses of $3.3 million recorded in the prior-year quarter.

As of Jun 30, 2021, the company had cash and liquid investments of $280.7 million, with no debt or goodwill.

Share Repurchase Update

In the reported quarter, the company repurchased 0.4 million shares for $21.7 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 6.19% due to these changes.

VGM Scores

At this time, Moelis has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

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

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Moelis has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

MC – Moelis (MC) Beats Q2 Earnings and Revenue Estimates

Moelis (MC Free Report) came out with quarterly earnings of $1.19 per share, beating the Zacks Consensus Estimate of $0.82 per share. This compares to loss of $0.11 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 45.12%. A quarter ago, it was expected that this investment bank would post earnings of $0.97 per share when it actually produced earnings of $1.02, delivering a surprise of 5.15%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Moelis, which belongs to the Zacks Financial – Investment Bank industry, posted revenues of $360.91 million for the quarter ended June 2021, surpassing the Zacks Consensus Estimate by 34.67%. This compares to year-ago revenues of $159.94 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock’s immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings call.

Moelis shares have added about 17.4% since the beginning of the year versus the S&P 500’s gain of 15.1%.

What’s Next for Moelis?

While Moelis has outperformed the market so far this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company’s earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Moelis was mixed. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.77 on $269.42 million in revenues for the coming quarter and $3.59 on $1.14 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial – Investment Bank is currently in the bottom 34% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

MC – Recap: Moelis & Q2 Earnings

Shares of Moelis & (NYSE:MC) fell in after-market trading after the company reported Q2 results.

Quarterly Results

Earnings per share were up 1181.82% over the past year to $1.19, which beat the estimate of $0.80.

Revenue of $360,907,000 up by 125.65% from the same period last year, which beat the estimate of $262,520,000.

Guidance

Moelis & hasn’t issued any earnings guidance for the time being.

Moelis & hasn’t issued any revenue guidance for the time being.

Details Of The Call

Date: Jul 21, 2021

Time: 05:00 PM

ET Webcast URL: https://78449.choruscall.com/dataconf/productusers/mc/mediaframe/45525/indexr.html

Recent Stock Performance

Company’s 52-week high was at $59.63

52-week low: $28.77

Price action over last quarter: Up 0.96%

Company Overview

Moelis & Co is an independent investment bank that provides unconflicted strategic advice to a diverse client base. The firm’s objective is to offer a range of advisory services with expertise across all major industries in mergers and acquisitions, recapitalizations and restructurings, and other corporate finance matters. Business is operated through the geographical region of the United States, Europe, and Internationally of which the United States accounts for a major share of the revenue.

MC – How to Boost Your Portfolio with Top Finance Stocks Set to Beat Earnings

Earnings are arguably the most important single number on a company’s quarterly financial report. Wall Street clearly dives into all of the other metrics and management’s input, but the EPS figure helps cut through all the noise.

The earnings figure itself is key, of course, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb and vice versa.

Now that we know how important earnings and earnings surprises are, it’s time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.

The Zacks Earnings ESP, Explained

The Zacks Expected Surprise Prediction, or ESP, works by locking in on the most up-to-date analyst earnings revisions because they can be more accurate than estimates from weeks or even months before the actual release date. The thinking is pretty straightforward: analysts who provide earnings estimates closer to the report are likely to have more information.

With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.

In fact, when we combined a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, stocks produced a positive surprise 70% of the time. Perhaps most importantly, using these parameters has helped produce 28.3% annual returns on average, according to our 10 year backtest.

Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank.

Should You Consider Moelis?

The final step today is to look at a stock that meets our ESP qualifications. Moelis (MC Free Report) earns a #1 (Strong Buy) two days from its next quarterly earnings release on April 28, 2021, and its Most Accurate Estimate comes in at $0.91 a share.

By taking the percentage difference between the $0.91 Most Accurate Estimate and the $0.87 Zacks Consensus Estimate, Moelis has an Earnings ESP of 4.98%. Investors should also know that MC is just one of a large group of stocks with positive ESPs. All of these qualifying stocks can be filtered by ESP, Zacks Rank, % Surprise (Last Qtr.), and Reporting date.

Using the Zacks Earnings ESP to your advantage is just the start. Make sure to check out the Earnings ESP Home Page for even more earnings-related tips and tricks to design a winning investment portfolio.

Find Stocks to Buy or Sell Before They’re Reported

Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they’re reported for profitable earnings season trading. Check it out here >>

MC – Moelis (MC) Earnings Expected to Grow: Should You Buy?

The market expects Moelis (MC Free Report) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended December 2020. This widely-known consensus outlook is important in assessing the company’s earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.

The earnings report, which is expected to be released on February 10, 2021, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management’s discussion of business conditions on the earnings call, it’s worth handicapping the probability of a positive EPS surprise.

Zacks Consensus Estimate

This investment bank is expected to post quarterly earnings of $1.33 per share in its upcoming report, which represents a year-over-year change of +250%.

Revenues are expected to be $306.90 million, up 37.3% from the year-ago quarter.

Estimate Revisions Trend

The consensus EPS estimate for the quarter has been revised 4.92% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.

Price, Consensus and EPS Surprise

Earnings Whisper

Estimate revisions ahead of a company’s earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model — the Zacks Earnings ESP (Expected Surprise Prediction) — has this insight at its core.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model’s predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Moelis?

For Moelis, the Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate. This has resulted in an Earnings ESP of 0%.

On the other hand, the stock currently carries a Zacks Rank of #1.

So, this combination makes it difficult to conclusively predict that Moelis will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?

While calculating estimates for a company’s future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it’s worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Moelis would post earnings of $0.02 per share when it actually produced earnings of $0.54, delivering a surprise of +2,600%.

Over the last four quarters, the company has beaten consensus EPS estimates four times.

Bottom Line

An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it’s worth checking a company’s Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they’ve reported.

Moelis doesn’t appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

MC – Why Is Moelis (MC) Up 1.3% Since Last Earnings Report?

It has been about a month since the last earnings report for Moelis (MC Free Report) . Shares have added about 1.3% 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 its most recent earnings report in order to get a better handle on the important catalysts.

Moelis & Company Q3 Earnings Top Estimates, Revenues Decline

Moelis & Company recorded third-quarter 2020 adjusted earnings per share of 54 cents, comfortably surpassing the Zacks Consensus Estimate of 2 cents. However, the figure deteriorated from the year-ago reported figure of 76 cents per share.

Results were primarily hurt by a fall in revenues. However, a decrease in expenses and a solid liquidity position were tailwinds.

Net income (GAAP basis) was $41.8 million or 54 cents per share compared with net income of $54.7 million or 54 cents per share recorded in the prior-year quarter.

Revenues & Expenses Decline

Total revenues decreased 10% year over year to $207.6 million. The fall can be primarily attributed to lesser M&A transactions. However, the top line surpassed the Zacks Consensus Estimate of $140.8 million.

Total operating expenses (adjusted basis) were $154.9 million, down 8.5% year over year. Decrease in compensation and benefits costs led to the fall.

Other expenses (GAAP basis) were $1.6 million against other income of $14.3 million recorded in the year-ago quarter.

As of Sep 30, 2020, the company had cash and liquid investments of $266.3 million, with no debt or goodwill.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 637.5% due to these changes.

VGM Scores

Currently, Moelis has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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 trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Moelis has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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