Moelis & Company (MC - Free Report) is well poised for growth on the back of consistent top-line rise, solid earnings performance and a strong balance sheet position. Thus, this Zacks Rank #2 (Buy) stock seems like an attractive investment opportunity right now.
Further, the analysts are bullish on the stock as it has been witnessing solid upward estimate revisions. Over the last 60 days, the Zacks Consensus Estimate for earnings has been raised 4.5% and 1.7% for 2018 and 2019, respectively.
Also, the stock has rallied 16.9% in a year’s time against 4.5% decline for the industry it belongs to.
Here are the factors that make Moelis & Company a viable investment option.
Earnings strength: Moelis & Company has witnessed earnings growth of 15.4% in the past three-five years, higher than the industry’s growth of 10.7%. This earnings momentum is likely to continue in the near term, as reflected by the company’s projected EPS growth rate of 31.4% for 2018.
Further, the stock has a Growth Score of A. Our research shows that stocks with a Style Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best upside potential.
Also, the company has a decent earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters with an average beat of 21.6%.
Revenue growth: Moelis & Company’s top-line growth reflects favorable operating backdrop. The company’s revenues have witnessed a five-year (2013-2017) CAGR of 13.6%.Further, the company’s projected sales growth rate of 29.5% and 6% for 2018 and 2019, respectively, ensures continuation of the upward trend in revenues.
Strong Leverage: Moelis & Company’s debt/equity ratio is 0.00 compared with the industry average of 0.20. This shows that the company does not use debt to finance its operations. Hence, it will be financially stable even in adverse economic conditions.
Superior Return on Equity (ROE): Moelis & Company has an ROE of 50.56%, significantly higher than the industry average of 11.47%. This shows that the company reinvests its cash more efficiently.
Favorable VGM Score: Moelis & Company has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 offer the best upside potential.
Other Stocks to Consider
Other stocks in the same space worth a look are JMP Group LLC (JMP - Free Report) , Evercore Inc (EVR - Free Report) and Stifel Financial Corp. .
JMP Group has witnessed an upward earnings estimate revision of 54.5% for the current year, over the last 60 days. Its share price has increased 4.6% in the past three months. The company currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Evercore’s Zacks Consensus Estimate for the current year has remained stable over the last 60 days. Its shares have gained 41.2% in the past 12 months. It carries a Zacks Rank #2.
Stifel Financial also carries a Zacks Rank of 2. The stock has witnessed an upward earnings estimate revision of 5.3% for the current year over the past 60 days. Its shares price has increased 14.4% in a year’s time.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>