Why Is Moelis (MC) Up 12.7% Since Last Earnings Report?

Core Viewpoint - Moelis & Company reported strong first-quarter earnings for 2024, with adjusted earnings per share significantly exceeding expectations, but faced challenges with rising expenses and downward revisions in estimates [2][4][7]. Financial Performance - Adjusted earnings per share for Q1 2024 were 22 cents, surpassing the Zacks Consensus Estimate of 11 cents and up from 5 cents in the prior-year quarter [2]. - Net income on a GAAP basis was $17.5 million, a substantial increase from $3.6 million in the prior-year quarter [3]. - Total revenues grew 15% year over year to $217.5 million, driven by increased fees from restructuring and capital markets transactions, although it fell short of the Zacks Consensus Estimate of $222.7 million [4]. - Total operating expenses rose 12% to $211.7 million, attributed to higher compensation and benefits costs as well as non-compensation expenses [4]. - Other income was reported at $4.2 million, up from $1.7 million in the prior-year quarter [5]. - As of March 31, 2024, the company had cash and liquid investments totaling $124.9 million, with no debt or goodwill [5]. Outlook - Management anticipates adjusted non-compensation expenses to be nearly $46 million per quarter [6]. - Recent estimates for the company have trended downward, with a significant shift of -42.55% in consensus estimates [7]. - Moelis holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [9]. Industry Comparison - Moelis operates within the Zacks Financial - Investment Bank industry, where Goldman Sachs has seen a 9.1% increase in stock price over the past month [10]. - Goldman Sachs reported revenues of $14.21 billion for the last quarter, reflecting a year-over-year increase of 16.3%, with an EPS of $11.58 compared to $8.79 a year ago [10]. - For the current quarter, Goldman is projected to post earnings of $8.87 per share, indicating a 188% change from the year-ago quarter, with a Zacks Rank 1 (Strong Buy) [11].