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Moelis (MC)
NYSE:MC

Moelis (MC) AI Stock Analysis

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MC

Moelis

(NYSE:MC)

74Outperform
Moelis & Company is well-positioned with strong financial performance and an optimistic outlook for 2025. While its valuation appears high, the company's strategic initiatives and leadership changes support future growth. Technical indicators suggest some caution in the short term, but the overall long-term prospects remain strong.
Positive Factors
Revenue Growth
Moelis closed the year on a great note with 4Q24 revenues increased ~104% over 4Q23, materially pulling up full-year revenue growth to 40%.
Strategic Investments
Moelis made strategic investments in key sectors such as technology, industrials, and energy that are driving results for the firm.
Negative Factors
Earnings Per Share
Lowering 4Q24 EPS by 12% to $0.29 on lower revenues and a higher 75% comp ratio.

Moelis (MC) vs. S&P 500 (SPY)

Moelis Business Overview & Revenue Model

Company DescriptionMoelis & 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, and financial sponsors. It focuses on clients from large public multinational corporations to middle market private companies to individual entrepreneurs. 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.
How the Company Makes MoneyMoelis & Company generates revenue primarily through advisory fees collected for its financial advisory services. The company's key revenue streams include fees from mergers and acquisitions advisory, where they guide clients through the buying, selling, and merging of businesses; capital markets advisory, assisting clients with raising capital through equity or debt markets; and restructuring advisory, helping clients navigate financial distress situations. Moelis & Company's earnings are significantly influenced by the volume and size of the transactions they advise on, as well as the overall health of the global financial markets. The firm does not engage in proprietary trading or lending, maintaining a focus solely on client advisory, which differentiates it from many traditional investment banks. Strategic partnerships and a strong global network further contribute to the firm's ability to secure high-profile advisory roles, enhancing its revenue potential.

Moelis Financial Statement Overview

Summary
Moelis demonstrated impressive financial recovery in 2024 with a 39.76% revenue growth, improved margins, and a debt-free balance sheet. Strong cash flow management and profitability indicate a solid financial foundation for future growth.
Income Statement
78
Positive
Moelis showed a strong recovery in its financial performance over the past year. The company experienced a significant revenue growth of 39.76% in 2024 compared to the previous year. The gross profit margin improved substantially to 28.0%, demonstrating effective cost management. Net profit margin also rebounded to 11.39%, a notable improvement from the previous year's negative margin. EBIT and EBITDA margins turned positive, reflecting strong operational efficiency. These factors indicate robust profitability and efficiency improvements.
Balance Sheet
82
Very Positive
Moelis has a solid balance sheet with no total debt, resulting in a debt-free status for 2024. The equity ratio improved to 32.02%, indicating a solid capital structure. Return on equity (ROE) increased to 30.8%, showcasing the company's ability to generate profits from shareholders' equity. The strong equity position and lack of debt highlight financial stability and reduced risk.
Cash Flow
85
Very Positive
The company demonstrated strong cash flow management with a substantial increase in operating cash flow to $427.5M in 2024. Free cash flow grew significantly by 192.96%, indicating improved cash generation capabilities. The free cash flow to net income ratio was strong at 3.05, illustrating efficient conversion of earnings into cash flow. The operating cash flow to net income ratio was particularly high at 3.14, highlighting robust liquidity and financial flexibility.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.19B854.75M985.30M1.54B943.28M
Gross Profit
334.49M140.00M367.10M626.70M382.47M
EBIT
172.94M-40.35M216.10M495.92M265.71M
EBITDA
183.39M-32.03M224.07M503.16M270.42M
Net Income Common Stockholders
136.02M-24.70M150.34M365.21M178.83M
Balance SheetCash, Cash Equivalents and Short-Term Investments
412.47M186.42M206.79M520.21M202.48M
Total Assets
1.38B1.18B1.22B1.56B1.20B
Total Debt
223.24M215.68M192.76M191.89M196.61M
Net Debt
-189.23M29.27M-14.03M-328.32M-5.86M
Total Liabilities
899.55M817.30M757.93M1.08B751.97M
Stockholders Equity
441.61M352.14M444.50M489.07M479.95M
Cash FlowFree Cash Flow
415.39M141.78M27.04M920.55M388.56M
Operating Cash Flow
427.49M158.47M32.99M936.98M429.21M
Investing Cash Flow
17.11M48.57M-11.18M-17.01M-39.95M
Financing Cash Flow
-215.10M-229.17M-326.90M-602.54M-351.79M

Moelis Technical Analysis

Technical Analysis Sentiment
Negative
Last Price58.55
Price Trends
50DMA
72.66
Negative
100DMA
72.59
Negative
200DMA
66.89
Negative
Market Momentum
MACD
-4.23
Positive
RSI
23.23
Positive
STOCH
7.76
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MC, the sentiment is Negative. The current price of 58.55 is below the 20-day moving average (MA) of 67.98, below the 50-day MA of 72.66, and below the 200-day MA of 66.89, indicating a bearish trend. The MACD of -4.23 indicates Positive momentum. The RSI at 23.23 is Positive, neither overbought nor oversold. The STOCH value of 7.76 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MC.

Moelis Risk Analysis

Moelis disclosed 38 risk factors in its most recent earnings report. Moelis reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Moelis Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
MSMS
77
Outperform
$183.87B14.3513.16%3.18%7.16%53.77%
MCMC
74
Outperform
$4.61B33.8534.27%4.08%39.75%
LALAZ
74
Outperform
$4.12B17.1151.51%4.36%23.88%
GSGS
74
Outperform
$167.16B13.2111.95%2.19%14.80%77.97%
PJPJT
74
Outperform
$5.50B28.7862.26%0.70%29.48%63.03%
EVEVR
73
Outperform
$7.76B21.8523.03%1.61%22.67%47.20%
63
Neutral
$13.85B10.479.22%4.23%17.31%-7.79%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MC
Moelis
58.55
6.95
13.47%
EVR
Evercore Partners
193.85
7.06
3.78%
LAZ
Lazard
44.93
7.56
20.23%
MS
Morgan Stanley
111.68
26.14
30.56%
GS
Goldman Sachs Group
524.81
145.96
38.53%
PJT
PJT Partners
139.91
44.02
45.91%

Moelis Earnings Call Summary

Earnings Call Date: Feb 5, 2025 | % Change Since: -25.89% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance for Moelis & Company, with notable revenue growth and strategic sector investments driving positive results. However, there are concerns about increasing expenses and typical seasonal slowdowns. Overall, the firm's outlook is optimistic with upcoming strategic initiatives.
Highlights
Record Revenue Growth
Fourth quarter revenues were $439 million, marking an increase of 104% from the prior year period. Full year adjusted revenues rose by 40% to $1.2 billion.
Strong Sector Performance
Technology was the largest sector contributor to 2024 revenues, with significant investments in technology, industrials, and energy sectors exceeding expectations.
Dividend Increase
The board declared a regular quarterly dividend of $0.65 per share, representing an 8% increase from the prior quarter.
No Debt and Strong Cash Position
The company maintains a strong balance sheet with $560 million of cash and no debt.
New Strategic Hire
Announced the hire of a market-leading banker as Global Head of Private Funds Advisory, highlighting commitment to expanding private capital solutions.
Lowlights
Increasing Expenses
Non-compensation expenses are expected to trend higher in 2025 due to increased investment in technology, occupancy, and T&E spend.
Seasonality and Regulatory Delays
A slower first quarter due to typical seasonality and regulatory delays, with some deals moving from Q4 to Q2.
Company Guidance
During the Moelis & Company earnings call for Q4 2024, guidance for the upcoming year included several key financial metrics. The firm reported a significant revenue increase of 104% year-over-year for the fourth quarter, totaling $439 million, and a 40% increase in full-year revenues, reaching $1.2 billion. The adjusted compensation expense ratio was reported at 58.4% for the quarter and 69% for the year, with non-compensation expenses at 11.4% and 15.9%, respectively. Moving into 2025, non-compensation expenses are expected to rise due to increased spending on technology, occupancy, and travel. The firm achieved a pretax margin of 31.4% for the quarter and 16.4% for the year, with a normalized corporate tax rate of 30.1% and an effective tax rate of 23.5%. Additionally, a quarterly dividend of $0.65 per share was declared, marking an 8% increase. The firm remains optimistic about 2025, anticipating benefits from a pro-growth strategy and an uptick in sponsor activity, while maintaining a strong balance sheet with $560 million in cash and no debt.

Moelis Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Moelis Appoints Christopher Callesano as New CFO
Positive
Feb 27, 2025

On February 27, 2025, Moelis & Company announced the appointment of Christopher Callesano as Chief Financial Officer, effective March 31, 2025, succeeding Joseph Simon, who will leave after a 15-year tenure. Callesano, with extensive experience in finance and accounting, has been with Moelis since 2010 and will continue to support the firm’s growth strategy. His appointment reflects Moelis’s commitment to maintaining its robust financial operations and strategic growth, benefiting clients and shareholders.

Executive/Board ChangesBusiness Operations and Strategy
Moelis Grants $25M Retention Award to CEO
Positive
Feb 10, 2025

On February 4, 2025, the Compensation Committee of Moelis & Company approved a retention grant valued at $25,000,000 in profits interest limited partnership units for Ken Moelis, the Chairman and CEO. This decision aims to ensure leadership stability and acknowledges Mr. Moelis’ contributions to the company’s strategy and shareholder value. The award will fully vest by February 13, 2029, contingent on Mr. Moelis’ continued employment with the company, with restrictions on selling the units until one year post-vesting.

Executive/Board ChangesDividendsBusiness Operations and StrategyFinancial Disclosures
Moelis Reports Strong Revenue Growth and Leadership Changes
Positive
Feb 5, 2025

Moelis & Company has reported significant financial growth for the fourth quarter and full year of 2024, with a 104% increase in quarterly revenues to $438.7 million and a 40% rise in full year revenues to $1,201.5 million compared to the previous year. The firm has also increased its quarterly dividend by 8% to $0.65 per share and strengthened its leadership team by promoting and hiring several managing directors, reflecting its strong operational momentum and commitment to growth strategies.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.