It has been about a month since the last earnings report for Evercore (
EVR Quick Quote EVR - Free Report) . Shares have added about 1.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Evercore 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 catalysts.
Evercore Q2 Earnings & Revenues Beat Estimates
Evercore reported second-quarter 2021 adjusted earnings per share of $3.17, which handily surpassed the Zacks Consensus Estimate of $2.82. Also, the bottom line came in higher than the prior-year quarter’s $1.53 per share.
Impressive revenue growth, with support from higher asset management and advisory fees, supported the company. Also, rise in AUM was a tailwind. In addition, Evercore’s liquidity position was consistently strong through the quarter. However, escalating expenses were a major drag. On a GAAP basis, net income available to common shareholders was $140.4 million or $3.21 per share compared with the $56.4 million or $1.35 per share reported in the year-ago quarter. Revenues Climb, Expenses Flare Up
Total revenues increased 35.1% year over year to a record $692.2 million in the reported quarter. Jump in asset management and administration fees as well as other revenues, including interest and investments and advisory fees, led to the uptick. The reported figure also beat the Zacks Consensus Estimate of $541.4 million. On an adjusted basis, net revenues came in at $691.2 million, up 34.5%.
Total expenses flared up 14.4% to $480.85 million from the prior-year quarter. This upswing was partly offset by lower execution, clearing and custody fees, communications and information services and other operating expenses. Adjusted compensation ratio was 59%, down from the year-earlier quarter’s 65%. Adjusted operating margin came in at 30.4% compared with the prior-year quarter’s 20%. Quarterly Segment Performance (U.S. GAAP)
Investment Banking: Net revenues climbed 35.4% year over year to $670.8 million. Also, operating income increased considerably to $202.7 million. Advisory client transactions were 255,000, up 15%. Notably, underwriting revenues of $48.05 million in the quarter plunged 48.7% from the prior-year period.
Investment Management: Net revenues were $17.05 million, up 45.7% from the prior-year quarter. Operating income was $4.4 million, against a loss of $0.6 million in year-ago quarter. Additionally, an AUM of $11.1 million was reported in the second quarter, up 7% from the year-ago quarter. Balance-Sheet Position
As of Jun 30, 2021, cash and cash equivalents were $442.2 million, while marketable and investment securities totaled $1.1 billion. Moreover, current assets exceeded current liabilities by $1.3 billion as of the same date.
Capital Deployment Activities
The company returned $496.3 million to shareholders in the first half of 2021 through dividends and repurchases of 3.3 million shares at an average price of $128.40.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
Currently, Evercore has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Evercore has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.