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Moelis (MC) Down 7.5% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Moelis (MC - Free Report) . Shares have lost about 7.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Moelis due for a breakout? 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 drivers.
Moelis & Company Q4 Earnings Miss as Revenues Plunge
Moelis & Company’s fourth-quarter 2022 adjusted earnings per share of 33 cents missed the Zacks Consensus Estimate of 37 cents. The bottom line reflects a plunge of 76.8% 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 $22.7 million or 28 cents per share, down from $113.5 million or $1.41 per share.
In 2022, adjusted earnings per share were $2.22, which missed the Zacks Consensus Estimate of $2.26 per share. This reflects a decline of 58.9%. Net income (GAAP basis) was $168.7 million or $2.14 per share, down from $423 million or $5.34 per share recorded in 2021.
Revenues & Expenses Decline
Total revenues (GAAP basis) tanked 51.3% year over year to $207.2 million in the reported quarter. The fall was primarily due to a decrease in average fees earned per completed transaction. The top line missed the Zacks Consensus Estimate of $214.1 million.
In 2022, revenues were $985.3 million, down 36%. However, the figure surpassed the Zacks Consensus Estimate of $982.2 million.
Total operating expenses (GAAP basis) were $177.8 million, down 34.6%. The fall was due to a decline in compensation and benefits costs.
Other income (GAAP basis) was $2.9 million in the reported quarter compared with other income of $4 million in the prior-year quarter.
As of Dec 31, 2022, the company had cash and liquid investments of $412.6 million, with no debt or goodwill.
Share Repurchase Update
In 2022, the company repurchased 3.2 million shares for $147.5 million.
Outlook
The company expects non-compensation expenses in the first quarter of 2023 to be in the $40 million range, excluding episodic transaction-related costs.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -46.1% due to these changes.
VGM Scores
At this time, Moelis has a great 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 D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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 indicates a downward shift. It's no surprise Moelis has a Zacks Rank #5 (Strong Sell). We expect a below average 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, LPL Financial Holdings Inc. (LPLA - Free Report) , has gained 0.1% over the past month. More than a month has passed since the company reported results for the quarter ended December 2022.
LPL Financial Holdings Inc. reported revenues of $2.33 billion in the last reported quarter, representing a year-over-year change of +11.4%. EPS of $4.21 for the same period compares with $1.63 a year ago.
LPL Financial Holdings Inc. is expected to post earnings of $4.59 per share for the current quarter, representing a year-over-year change of +135.4%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for LPL Financial Holdings Inc. Also, the stock has a VGM Score of A.
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Moelis (MC) Down 7.5% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Moelis (MC - Free Report) . Shares have lost about 7.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Moelis due for a breakout? 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 drivers.
Moelis & Company Q4 Earnings Miss as Revenues Plunge
Moelis & Company’s fourth-quarter 2022 adjusted earnings per share of 33 cents missed the Zacks Consensus Estimate of 37 cents. The bottom line reflects a plunge of 76.8% 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 $22.7 million or 28 cents per share, down from $113.5 million or $1.41 per share.
In 2022, adjusted earnings per share were $2.22, which missed the Zacks Consensus Estimate of $2.26 per share. This reflects a decline of 58.9%. Net income (GAAP basis) was $168.7 million or $2.14 per share, down from $423 million or $5.34 per share recorded in 2021.
Revenues & Expenses Decline
Total revenues (GAAP basis) tanked 51.3% year over year to $207.2 million in the reported quarter. The fall was primarily due to a decrease in average fees earned per completed transaction. The top line missed the Zacks Consensus Estimate of $214.1 million.
In 2022, revenues were $985.3 million, down 36%. However, the figure surpassed the Zacks Consensus Estimate of $982.2 million.
Total operating expenses (GAAP basis) were $177.8 million, down 34.6%. The fall was due to a decline in compensation and benefits costs.
Other income (GAAP basis) was $2.9 million in the reported quarter compared with other income of $4 million in the prior-year quarter.
As of Dec 31, 2022, the company had cash and liquid investments of $412.6 million, with no debt or goodwill.
Share Repurchase Update
In 2022, the company repurchased 3.2 million shares for $147.5 million.
Outlook
The company expects non-compensation expenses in the first quarter of 2023 to be in the $40 million range, excluding episodic transaction-related costs.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -46.1% due to these changes.
VGM Scores
At this time, Moelis has a great 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 D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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 indicates a downward shift. It's no surprise Moelis has a Zacks Rank #5 (Strong Sell). We expect a below average 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, LPL Financial Holdings Inc. (LPLA - Free Report) , has gained 0.1% over the past month. More than a month has passed since the company reported results for the quarter ended December 2022.
LPL Financial Holdings Inc. reported revenues of $2.33 billion in the last reported quarter, representing a year-over-year change of +11.4%. EPS of $4.21 for the same period compares with $1.63 a year ago.
LPL Financial Holdings Inc. is expected to post earnings of $4.59 per share for the current quarter, representing a year-over-year change of +135.4%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for LPL Financial Holdings Inc. Also, the stock has a VGM Score of A.