Why Is Moelis (MC) Down 7.2% Since Last Earnings Report?

It has been about a month since the last earnings report for Moelis (MC). Shares have lost about 7.2% 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 the most recent earnings report in order to get a better handle on the important catalysts.

Moelis & Company's Q3 Earnings Miss Estimates, Expenses Rise

Moelis & Company's third-quarter 2018 adjusted earnings of 62 cents per share missed the Zacks Consensus Estimate of 63 cents. However, the figure reflects an improvement of 9% from the prior-year quarter.

Results benefited from increase in revenues as M&A activities continued to rise. However, higher expenses acted as a headwind.

Net income (GAAP basis) was $44.9 million or 61 cents per share, up from $43.3 million or 48 cents per share in the prior-year quarter.

Revenues Improve, Costs Rise

Total revenues grew 22% year over year to $207.7 million. The rise was mainly driven by strength in M&A-related activity and higher average fees per completed transaction. However, it marginally lagged the Zacks Consensus Estimate of $207.9 million.

Total operating expenses (adjusted basis) were $153.6 million, increasing 19% year over year. Increase in compensation and non-compensations costs led to the rise.

Other income (adjusted basis) was $1 million, significantly lower than $15 million in the year-ago quarter.

As of Sep 30, 2018, Moelis & Company had cash and liquid investments of $231.6 million.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

At this time, Moelis has a great Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.


Moelis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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