A month has gone by since the last earnings report for Moelis (MC). Shares have added about 12.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Moelis due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Moelis & Company's Q1 Earnings Top as Revenues Rise Y/Y

Moelis & Company’s first-quarter 2024 adjusted earnings per share of 22 cents handily surpassed the Zacks Consensus Estimate of 11 cents. The bottom line compared favorably with 5 cents earned in the prior-year quarter.

Results benefited from a rise in revenues and other income. Also, the company had a solid liquidity position in the quarter. However, an increase in expenses acted as an undermining factor.

Net income (GAAP basis) was $17.5 million, up substantially from $3.6 million in the prior-year quarter.

Revenues Rise, Expenses Up

Total revenues (GAAP basis) grew 15% year over year to $217.5 million. This was driven by a rise in fees earned from restructuring and capital markets transactions. The top line, however, lagged the Zacks Consensus Estimate of $222.7 million.

Total operating expenses (GAAP basis) were $211.7 million, up 12%. The rise was due to an increase in both compensation and benefits costs and non-compensation expenses. Our estimates for total operating expenses were $223.8 million.

Other income (GAAP basis) was $4.2 million in the reported quarter, surging from $1.7 million in the prior-year quarter.

As of Mar 31, 2024, the company had cash and liquid investments of $124.9 million, with no debt or goodwill.

Outlook

Management expects adjusted non-compensation expenses to be almost $46 million per quarter.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

The consensus estimate has shifted -42.55% due to these changes.

VGM Scores

Currently, Moelis has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

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

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Moelis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.