Moelis trades at $63.63 per share and has stayed right on track with the overall market, gaining 21.4% over the last six months. At the same time, the S&P 500 has returned 21.3%.
Is now the time to buy MC? Find out in our full research report, it’s free for active Edge members.
Why Is MC a Good Business?
Founded in 2007 by veteran banker Ken Moelis during the lead-up to the financial crisis, Moelis & Company (NYSE:MC) is an independent investment bank that provides strategic and financial advisory services to corporations, financial sponsors, governments, and sovereign wealth funds.
1. Skyrocketing Revenue Shows Strong Momentum
A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.
Luckily, Moelis’s revenue grew at an impressive 14.8% compounded annual growth rate over the last five years. Its growth surpassed the average financials company and shows its offerings resonate with customers.
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
Moelis’s EPS grew at a remarkable 19.2% compounded annual growth rate over the last five years, higher than its 14.8% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Stellar ROE Showcases Lucrative Growth Opportunities
Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.
Over the last five years, Moelis has averaged an ROE of 44.9%, exceptional for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows Moelis has a strong competitive moat.
Final Judgment
These are just a few reasons why we're bullish on Moelis, but at $63.63 per share (or 20.9× forward P/E), is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.
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