PJT Partners (PJT) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended December 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The earnings report, which is expected to be released on February 4, 2025, might help the stock move higher if these key numbers are better tha ...

Growth Stocks and PJT Partners - Growth investors focus on stocks with above-average financial growth, which can deliver solid returns but carry higher risk and volatility [1] - The Zacks Growth Style Score helps identify cutting-edge growth stocks, and PJT Partners is currently recommended due to its favorable Growth Score and top Zacks Rank [2] - Stocks with the best growth features consistently outperform the market, especially those with a Growth Score of A or B and a Zacks Rank 1 or 2 [3] Earnings Growth - Earnings growth is crucial for growth investors, with double-digit growth indicating strong prospects and potential stock price gains [4] - PJT Partners' historical EPS growth rate is 0.9%, but its projected EPS growth for this year is 34.6%, significantly higher than the industry average of 15.5% [5] Cash Flow Growth - Higher-than-average cash flow growth is particularly beneficial for growth-oriented companies, enabling business expansion without relying on external funding [6] - PJT Partners' year-over-year cash flow growth is 38.1%, well above the industry average of -21.3% [6] - The company's annualized cash flow growth rate over the past 3-5 years is 14.9%, compared to the industry average of 10.3% [7] Earnings Estimate Revisions - Positive trends in earnings estimate revisions are strongly correlated with near-term stock price movements [8] - PJT Partners' current-year earnings estimates have been revised upward, with the Zacks Consensus Estimate surging 1.1% over the past month [8] Conclusion - PJT Partners has earned a Growth Score of B and a Zacks Rank 2 due to its strong earnings estimate revisions and growth metrics [10] - This combination positions PJT Partners well for outperformance, making it an attractive option for growth investors [12]

Stock Performance - PJT Partners' stock has risen by 15.4% over the past month and hit a new 52-week high of $163.54 [1] - The stock has gained 60.5% since the start of the year, outperforming the Zacks Finance sector (24.1%) and the Zacks Financial - Miscellaneous Services industry (17.7%) [1] Earnings and Revenue - PJT Partners has consistently beaten earnings estimates, with no misses in the last four quarters [2] - In the last earnings report, the company reported EPS of $0.93 versus the consensus estimate of $0.74 [2] - For the current fiscal year, PJT Partners is expected to post earnings of $4.40 per share on $1.42 billion in revenues, representing a 34.56% change in EPS and a 23.22% change in revenues [3] - For the next fiscal year, the company is expected to earn $5.40 per share on $1.62 billion in revenues, representing year-over-year changes of 22.73% and 13.65%, respectively [3] Valuation Metrics - PJT Partners trades at 37.2X current fiscal year EPS estimates, a premium to the peer industry average of 13.1X [7] - On a trailing cash flow basis, the stock trades at 22.9X versus its peer group's average of 9.5X [7] - The company has a Value Score of C, Growth Score of B, and Momentum Score of F, resulting in a VGM Score of B [6] Zacks Rank and Style Scores - PJT Partners currently has a Zacks Rank of 2 (Buy) due to rising earnings estimates [8] - The company's Style Scores (Value, Growth, Momentum) and Zacks Rank suggest it could still be poised for more gains [8] Industry Comparison - The Financial - Miscellaneous Services industry is in the top 31% of all industries, indicating favorable conditions for PJT Partners and its peers [11] - WisdomTree, Inc. (WT), a peer company, has a Zacks Rank of 2 (Buy) and a Value Score of C, Growth Score of B, and Momentum Score of B [9] - WisdomTree, Inc. beat earnings estimates by 5.88% last quarter and is expected to post earnings of $0.74 per share on revenue of $429.19 million for the current fiscal year [10] - WisdomTree, Inc.'s stock has gained 10.1% over the past month and trades at a forward P/E of 16.73X and a P/CF of 21.79X [10]

Global M&A and Restructuring Activity - Worldwide M&A announced volumes during the first nine months of 2024 were up 16% compared with the first nine months of 2023, with annualized volume up 7% compared to 2023[109] - Global restructuring and special situations activity remained strong in Q3 2024, driven by elevated levels of liability management and balance sheet restructurings[110] Fund Placement Activity - Fund placement activity increased from a year ago but remained challenged due to macroeconomic conditions and investor selectivity[111] Q3 2024 Financial Performance - Total revenues for Q3 2024 were $326.3 million, a 17% increase compared to $278.4 million in Q3 2023[125] - Advisory fees for Q3 2024 were $283.8 million, up 16% from $244.1 million in Q3 2023[125] - Placement fees for Q3 2024 were $32.5 million, a 22% increase from $26.7 million in Q3 2023[125] - Net income attributable to PJT Partners Inc. for Q3 2024 was $22.2 million, a 27% increase from $17.4 million in Q3 2023[125] - Compensation and benefits expenses for Q3 2024 were $226.8 million, up 17% from $193.5 million in Q3 2023[125] - Total expenses for Q3 2024 were $276.9 million, a 17% increase from $235.8 million in Q3 2023[125] - Net income for Q3 2024 was $41.1 million, a 32% increase from $31.2 million in Q3 2023[125] - Total revenues for Q3 2024 were $326.3 million, a $48.0 million increase compared to $278.4 million in Q3 2023[126] - Advisory fees for Q3 2024 were $283.8 million, a $39.7 million increase compared to $244.1 million in Q3 2023, driven by private capital solutions revenues[126] - Placement fees for Q3 2024 were $32.5 million, a $5.8 million increase compared to $26.7 million in Q3 2023, due to higher fund placement revenues[126] - Expenses for Q3 2024 were $276.9 million, a $41.1 million increase compared to $235.8 million in Q3 2023, driven by higher compensation and benefits, occupancy, and other expenses[129] Nine Months Ended September 30, 2024 Financial Performance - Total revenues for the nine months ended September 30, 2024, were $1,015.9 million, a $191.3 million increase compared to $824.6 million in the same period in 2023[127] - Advisory fees for the nine months ended September 30, 2024, were $879.6 million, a $143.5 million increase compared to $736.0 million in the same period in 2023, driven by strategic advisory, restructuring, and private capital solutions revenues[128] - Placement fees for the nine months ended September 30, 2024, were $113.8 million, a $39.6 million increase compared to $74.3 million in the same period in 2023, due to a significant increase in fund placement revenues[128] Share Repurchase Program - The company repurchased 1.9 million shares of Class A common stock at an average price of $100.08 per share, totaling $185.5 million, under the share repurchase program[148] Cash and Investments - As of September 30, 2024, the company had cash, cash equivalents, and short-term investments of $477.0 million, compared to $436.9 million as of December 31, 2023[137] Employee Loans and Guarantees - The company's guarantee for employee loans was $2.0 million as of September 30, 2024, down from $2.3 million as of December 31, 2023[151] Tax Receivable Agreement Liabilities - The company's tax receivable agreement liabilities were $30.7 million as of September 30, 2024, up from $29.7 million as of December 31, 2023[153] Allowance for Credit Losses - The allowance for credit losses increased to $4.0 million as of September 30, 2024 from $2.4 million as of December 31, 2023[161] Foreign Currency Fluctuations - Foreign currency fluctuations resulted in a $2.7 million gain in Other Comprehensive Income for the nine months ended September 30, 2024, compared to a $0.5 million loss in the same period of 2023[163] - The company reported a $1.3 million loss in Interest Income and Other due to foreign currency fluctuations for the nine months ended September 30, 2024, compared to a $3.4 million loss in the same period of 2023[163]

Growth Stocks Overview - Growth stocks are attractive due to their above-average financial growth and potential for exceptional returns, but they carry higher risk and volatility [1] - Finding great growth stocks is challenging as betting on stocks with declining growth stories can lead to significant losses [1] Zacks Growth Style Score and PJT Partners - The Zacks Growth Style Score helps identify cutting-edge growth stocks by analyzing real growth prospects beyond traditional attributes [2] - PJT Partners is recommended by the Zacks system due to its favorable Growth Score and top Zacks Rank [2] - Stocks with a Growth Score of A or B and a Zacks Rank 1 or 2 consistently outperform the market [3] Key Growth Factors for PJT Partners Earnings Growth - Earnings growth is a critical factor for growth stocks, with double-digit growth indicating strong prospects [4] - PJT Partners' historical EPS growth rate is 4.7%, but its projected EPS growth for this year is 34.6%, significantly higher than the industry average of 15.3% [5] Cash Flow Growth - High cash flow growth is essential for growth-oriented companies to fund new projects without external financing [6] - PJT Partners' year-over-year cash flow growth is 38.1%, compared to the industry average of -22% [6] - The company's annualized cash flow growth rate over the past 3-5 years is 14.9%, above the industry average of 10.7% [7] Earnings Estimate Revisions - Positive trends in earnings estimate revisions correlate with near-term stock price movements [8] - PJT Partners' current-year earnings estimates have been revised upward, with the Zacks Consensus Estimate increasing by 1.1% over the past month [9] Conclusion - PJT Partners' combination of a Zacks Rank 2 and a Growth Score of A positions it well for outperformance, making it an attractive option for growth investors [9][10]

Investment Strategy - The Value Lab focuses on long-only value ideas, targeting international mispriced equities with a portfolio yield of about 4% [1] - The Valkyrie Trading Society shares high-conviction developed market ideas that are downside limited and likely to generate non-correlated and outsized returns [3] Company Performance - PJT Partners' restructuring franchise continues to perform well, and the Park Hill placement franchise is also noted for its performance [2] Services Offered - The Value Lab provides members with a portfolio featuring real-time updates, 24/7 chat support, regular global market news reports, feedback on member stock ideas, new trades monthly, quarterly earnings write-ups, and daily macro opinions [2]

Financial Data and Key Metrics - Q3 2024 revenues reached a record $326 million, up 17% YoY, with adjusted pretax income up 16% and adjusted EPS up 19% [6] - Nine-month revenues were $1.016 billion, up 23% YoY, with adjusted pretax income up 32% and adjusted EPS up 35% [6] - Compensation expense was 69.5% of revenues for the first nine months, consistent with full-year 2024 expectations [10] - Adjusted non-compensation expense was $49 million for Q3, up 19% YoY, and $138 million for the first nine months, up 14% YoY [11] - Adjusted pretax income was $51 million for Q3 and $172 million for the first nine months, with an effective tax rate of 21% [13] - Q3 adjusted EPS was $0.93, and nine-month adjusted EPS was $3.10 [14] - The company ended Q3 with $477 million in cash and cash equivalents and $491 million in net working capital, with no funded debt outstanding [16] Business Line Performance - PJT Park Hill revenues rebounded significantly, with year-to-date fundraising volumes more than double YoY, outperforming the broader primary fundraising market [18][19] - Restructuring revenues reached record levels, with 2024 expected to be another record year due to elevated restructuring activity and liability management [21][22] - Strategic advisory revenues were up solidly YoY for the nine months, with Q3 revenues up slightly, reflecting a slow recovery in the M&A market [23][24] - The company has 35% more strategic advisory partners with over two years of tenure compared to 2021, leading to higher win rates and a growing backlog of transactions [25] Market and Geographic Performance - The acquisition of deNovo Partners strengthens the company's presence in the Gulf region, combining deNovo's regional expertise with PJT's global advisory capabilities [7][17] - The company continues to expand its global reach and sees network benefits from its collaborative business model, delivering integrated advisory and capital raising services worldwide [26] Strategic Direction and Industry Competition - The company remains committed to investing in capabilities, industry expertise, and geographic expansion, with the acquisition of deNovo Partners being a key strategic move [6][7] - The restructuring cycle is expected to continue due to high interest rates, technological disruption, and changing consumer preferences, providing a tailwind for the restructuring business [22] - The M&A market is expected to recover more significantly in 2025, driven by rate cuts, open capital markets, and increased private equity activity [24][36] Management Commentary on Operating Environment and Outlook - Management is confident in the company's near, intermediate, and long-term growth prospects, citing a strong pipeline, increased client traction, and a favorable M&A backdrop [25][26] - The company expects strategic advisory revenues to grow meaningfully in excess of headcount in 2025, leading to improved compensation leverage [45][49] - The restructuring cycle is seen as multiyear, with continued demand for liability management and restructuring services [33][34] Other Important Information - The company closed the acquisition of deNovo Partners on October 1, 2024, enhancing its capabilities in the Gulf region [7][17] - The Board approved a dividend of $0.25 per share, payable on December 18, 2024, to shareholders of record as of December 4, 2024 [16] Q&A Session Summary Question: Capacity and productivity expectations for the strategic advisory business - The company does not manage to a specific revenue-per-partner metric due to varying factors such as macroeconomic conditions and franchise strength [29] - The firm has significantly improved its market presence and expects higher productivity in 2025 compared to previous cycles [30][31] Question: Pace of new restructuring mandates - The restructuring cycle is expected to be long-tailed, with no material change in the onboarding of new clients, and the company remains constructive on 2024 and beyond [33][34] Question: Confidence in a stronger M&A market in 2025 - Management cites rate cuts, open capital markets, and increased corporate appetite for M&A as key drivers for a stronger M&A environment in 2025 [36][37] - The company has a near-record mandate count and a growing backlog of announced transactions, positioning it well for 2025 [38] Question: Sponsor activity in the M&A market - Sponsor activity is expected to improve but is unlikely to return to the levels seen during the near-zero interest rate environment [39] Question: Leveraging Park Hill's sponsor relationships - The company leverages its strategic advisory and restructuring capabilities to build strong sponsor relationships, with Park Hill playing a key role in fund continuation services [40][41][42] Question: Compensation leverage and headcount growth - Strategic advisory revenues are expected to grow faster than headcount in 2025, leading to improved compensation leverage [45][49] Question: Park Hill's fundraising market outlook - Fund continuation vehicles are expected to remain a significant part of the market, with Park Hill benefiting from its differentiated approach to distribution and origination [51][52] Question: Structural changes in compensation ratios - The company is confident in its ability to return to a 64% compensation ratio, despite inflationary pressures at the junior level [54] Question: Capital allocation and acquisition strategy - The company prioritizes building a best-in-class firm and will consider acquisitions only if they are highly attractive and complementary to its existing business [56] Question: Impact of the deNovo acquisition - The deNovo acquisition is expected to have an immediate impact across all business lines, with long-term aspirations to establish a strong presence in the Middle East [58][59]

Earnings Performance - PJT Partners reported quarterly earnings of $0 93 per share, beating the Zacks Consensus Estimate of $0 74 per share, representing a 25 68% earnings surprise [1] - The company's earnings per share (EPS) increased from $0 78 per share a year ago [1] - Over the last four quarters, PJT Partners has surpassed consensus EPS estimates four times [2] Revenue Performance - PJT Partners posted revenues of $326 32 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 14 10% [2] - This compares to year-ago revenues of $278 36 million [2] - The company has topped consensus revenue estimates four times over the last four quarters [2] Stock Performance - PJT Partners shares have added about 38 5% since the beginning of the year, outperforming the S&P 500's gain of 22 1% [3] - The stock's immediate price movement will depend on management's commentary on the earnings call [3] Earnings Outlook - The current consensus EPS estimate is $1 43 on $412 million in revenues for the coming quarter and $4 35 on $1 39 billion in revenues for the current fiscal year [7] - The estimate revisions trend for PJT Partners is mixed, translating into a Zacks Rank 3 (Hold) [6] Industry Context - PJT Partners belongs to the Zacks Financial - Miscellaneous Services industry, which is currently in the bottom 43% of the 250 plus Zacks industries [8] - The top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8] Peer Comparison - Axos Financial (AX), another stock in the same industry, is expected to post quarterly earnings of $1 80 per share, representing a year-over-year change of +27 7% [9] - Axos Financial's revenues are expected to be $299 59 million, up 22% from the year-ago quarter [10] - The consensus EPS estimate for Axos Financial has been revised 0 4% lower over the last 30 days [9]

Revenue Growth - Record Third Quarter Revenues of $326 million, a 17% increase from a year ago[3] - Record year-to-date Revenues of $1.02 billion, a 23% increase from a year ago[3] - Total revenues for Q3 2024 were $326.3 million, a 17.2% increase compared to $278.4 million in Q3 2023[37] - Advisory Fees increased to $283.8 million, a 16% increase from the prior year[5] - Placement Fees increased to $32.5 million, a 22% increase from the prior year[5] - Interest Income & Other increased to $10.1 million, a 33% increase from the prior year[5] - Advisory fees for Q3 2024 were $283.8 million, up 16.2% from $244.1 million in Q3 2023[37] Income and Profitability - GAAP Pretax Income of $49 million and Adjusted Pretax Income of $51 million, both increased 16% from a year ago[3] - GAAP Diluted EPS of $0.79 and Adjusted EPS of $0.93, increases of 16% and 19%, respectively, from a year ago[3] - Net income attributable to PJT Partners Inc. for Q3 2024 was $22.2 million, a 27.2% increase from $17.4 million in Q3 2023[37] - Adjusted pretax income for Q3 2024 was $50.6 million, up 15.6% from $43.8 million in Q3 2023[39] - Adjusted net income for Q3 2024 was $42.1 million, a 29.0% increase from $32.6 million in Q3 2023[39] - Basic net income per share of Class A common stock for Q3 2024 was $0.87, compared to $0.69 in Q3 2023[37] - Diluted net income per share of Class A common stock for Q3 2024 was $0.79, compared to $0.68 in Q3 2023[37] - Adjusted net income, if-converted per share for Q3 2024 was $0.93, compared to $0.78 in Q3 2023[39] Share Repurchases and Equity - Repurchased 2.6 million share and share equivalents through September 30, 2024, with record open market repurchases of 1.9 million shares[3] - Weighted-average shares outstanding, if-converted for Q3 2024 were 44.5 million, up 7.5% from 41.4 million in Q3 2023[39] - Basic Shares Outstanding, GAAP for Q3 2024 was 25,372,621, compared to 25,193,359 in Q3 2023[44] - Diluted Shares Outstanding, GAAP for Q3 2024 increased to 44,642,704 from 26,644,324 in Q3 2023[44] - Fully-Diluted Shares Outstanding as of September 30, 2024, was 46,950,955, up from 44,457,247 in 2023[44] - The Company achieved a dividend adjusted 20-day volume-weighted average share price of over $129, with 2.5 million share equivalents included in the fully-diluted share count[44] - 1.0 million share equivalents had satisfied both service and market conditions, while 1.5 million are vesting under ongoing service conditions[44] - Dilutive Impact of Unvested RSUs for Q3 2024 was 3,437,914, compared to 1,450,965 in Q3 2023[44] - Dilutive Impact of Partnership Units for Q3 2024 was 15,832,169, with no comparable figure in Q3 2023[44] - If-Converted Shares Outstanding for Q3 2024 was 44,504,239, up from 41,409,625 in Q3 2023[44] - Partnership Units for Q3 2024 were 15,693,704, compared to 14,765,301 in Q3 2023[44] Cash and Investments - Record cash, cash equivalents and short-term investments of $477 million and no funded debt[3] Acquisitions and Expenses - Completed the acquisition of deNovo Partners on October 1, 2024[3] - Adjusted non-compensation expense for Q3 2024 was $48.9 million, up 19.0% from $41.1 million in Q3 2023[41] - The Company's tax adjustments include amortization of intangible assets from acquisitions and compensation-related tax deductions[46]

Earnings Expectations for PJT Partners - The market expects PJT Partners to report a year-over-year decline in earnings of 5.1% to $0.74 per share, while revenues are expected to increase by 2.7% to $286 million for the quarter ended September 2024 [2] - The consensus EPS estimate has been revised 1.42% higher over the last 30 days, reflecting analysts' reassessment of initial estimates [3] - The company has a Zacks Rank of 3 (Hold) and an Earnings ESP of 0%, making it difficult to predict an earnings beat [6][7] Historical Performance and Industry Comparison - PJT Partners has consistently beaten consensus EPS estimates over the last four quarters, including a significant surprise of +45.12% in the last reported quarter [8] - In the same industry, WisdomTree, Inc is expected to post earnings of $0.17 per share, representing a year-over-year increase of 70%, with revenues expected to grow 21.7% to $110.01 million [10] - WisdomTree, Inc has an Earnings ESP of 2.00% and a Zacks Rank of 3 (Hold), indicating a higher likelihood of beating consensus EPS estimates [10] Market Impact and Investor Considerations - The actual earnings results compared to estimates will likely influence PJT Partners' near-term stock price, with better-than-expected results potentially driving the stock higher [1] - Management's discussion of business conditions during the earnings call will be crucial in determining the sustainability of any immediate price change and future earnings expectations [1] - While an earnings beat or miss is not the sole basis for stock movement, betting on stocks expected to beat earnings expectations increases the odds of success [9]