Evercore Inc. (EVR) Bundle
Understanding Evercore Inc. (EVR) Revenue Streams
Understanding Evercore Inc.’s Revenue Streams
Evercore Inc. has demonstrated substantial growth in its revenue streams for the year 2024. Below is a detailed analysis of its primary revenue sources, year-over-year growth, segment contributions, and significant changes in revenue streams.
Revenue Sources Breakdown
For the three months ended September 30, 2024, Evercore Inc. reported net revenues of $734.2 million, reflecting an increase of 29% from $570.2 million in the same period of 2023. The breakdown of revenue sources is as follows:
| Revenue Source | Q3 2024 Revenue ($) | Q3 2023 Revenue ($) | Change (%) |
|---|---|---|---|
| Advisory Fees | 592,980 | 467,401 | 27% |
| Underwriting Fees | 44,132 | 30,814 | 43% |
| Commissions and Related Revenue | 54,559 | 48,697 | 12% |
| Other Revenue, Including Interest and Investments | 21,104 | 5,729 | 268% |
Year-over-Year Revenue Growth Rate
For the nine months ended September 30, 2024, Evercore Inc. reported net revenues of $2.00 billion, an increase of 22% from $1.64 billion in the same period of 2023. The year-over-year growth rates are as follows:
| Period | 2024 Revenue ($) | 2023 Revenue ($) | Growth Rate (%) |
|---|---|---|---|
| Q3 | 734,222 | 570,220 | 29% |
| 9 Months | 2,004,261 | 1,641,782 | 22% |
Contribution of Different Business Segments to Overall Revenue
In examining the contribution of various business segments, the Investment Banking & Equities segment was the largest revenue contributor, with net revenues of $712.8 million for Q3 2024, up from $552.6 million in Q3 2023, reflecting a 29% increase. Below is a summary of the contributions by segment:
| Business Segment | Q3 2024 Revenue ($) | Q3 2023 Revenue ($) | Change (%) |
|---|---|---|---|
| Investment Banking & Equities | 712,775 | 552,641 | 29% |
| Asset Management | 20,555 | 17,304 | 19% |
| Other Revenue | 21,996 | 6,004 | 266% |
Significant Changes in Revenue Streams
Notable changes in revenue streams include a significant increase in other revenue, which encompasses interest and investments, rising by 268% year-over-year in Q3 2024. This growth is attributed to improved performance in the investment funds portfolio and increased interest income. The revenue from advisory fees also rose due to a higher number of large transactions and advisory fees earned in 2024, indicating a robust performance in the advisory segment.
Overall, Evercore Inc. has shown a strong upward trajectory in its revenue streams, driven by advisory services and investment performance.
A Deep Dive into Evercore Inc. (EVR) Profitability
A Deep Dive into Evercore Inc.'s Profitability
Gross Profit, Operating Profit, and Net Profit Margins
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Revenues | $734.2 million | $570.2 million | $2.00 billion | $1.64 billion |
| Total Operating Expenses | $612.2 million | $493.4 million | $1.68 billion | $1.40 billion |
| Operating Income | $121.99 million | $76.83 million | $314.36 million | $241.45 million |
| Net Income | $88.09 million | $58.77 million | $262.95 million | $193.18 million |
| Net Profit Margin | 12.0% | 10.3% | 13.1% | 11.8% |
Trends in Profitability Over Time
For the three months ended September 30, 2024, net income attributable to Evercore Inc. was $88.09 million, a 50% increase from $58.77 million in Q3 2023. Over the nine months, net income rose to $262.95 million from $193.18 million, marking a 36% year-over-year increase.
Comparison of Profitability Ratios with Industry Averages
| Metric | Evercore Inc. | Industry Average |
|---|---|---|
| Operating Margin | 16.6% | 15.0% |
| Net Profit Margin | 12.0% | 10.5% |
| Return on Equity (ROE) | 18.9% | 15.0% |
Analysis of Operational Efficiency
Employee Compensation and Benefits Expense as a percentage of Net Revenues was 66.5% for Q3 2024, compared to 68.7% for Q3 2023. This indicates improved efficiency in managing compensation costs relative to revenues. Additionally, non-compensation expenses per employee increased to approximately $49.5 thousand in Q3 2024 from $45.5 thousand in Q3 2023, reflecting higher operational activity.
Recent Performance Highlights
- Advisory Fees increased by 27% year-over-year to $592.98 million in Q3 2024.
- Underwriting Fees rose by 43% to $44.13 million in Q3 2024.
- Commissions and Related Revenue grew by 12% to $54.56 million in Q3 2024.
Debt vs. Equity: How Evercore Inc. (EVR) Finances Its Growth
Debt vs. Equity: How Evercore Inc. Finances Its Growth
Overview of the Company's Debt Levels
As of September 30, 2024, Evercore Inc. reported total long-term debt of $431.9 million and short-term debt of $583.7 million. This represents a decrease in total debt compared to $476.8 million and $744.3 million respectively, as of December 31, 2023.
| Debt Type | Amount (in millions) | Change from Previous Period |
|---|---|---|
| Long-term Debt | $431.9 | -9.4% |
| Short-term Debt | $583.7 | -21.6% |
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio for Evercore Inc. stands at 0.38 as of September 30, 2024, compared to the industry average of approximately 0.50. This indicates a relatively conservative leverage position, suggesting the company is less reliant on debt financing than many of its peers.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
Evercore Inc. has not issued any new debt in the past year. The company's credit rating remains stable, with a rating of Baa2 from Moody’s and BBB from S&P, indicating a low to moderate credit risk.
Balancing Between Debt Financing and Equity Funding
In the first nine months of 2024, Evercore Inc. reported a net income of $262.9 million, up from $193.2 million in the same period of 2023. The company has maintained a balance between debt financing and equity funding, with dividends declared totaling $90.4 million for the year, compared to $85.2 million in 2023. This strategy allows the company to leverage its debt while maintaining healthy equity levels.
| Financial Metrics | 2024 (YTD) | 2023 (YTD) |
|---|---|---|
| Net Income (in millions) | $262.9 | $193.2 |
| Dividends Declared (in millions) | $90.4 | $85.2 |
| Debt-to-Equity Ratio | 0.38 | 0.42 |
Assessing Evercore Inc. (EVR) Liquidity
Assessing Evercore Inc.'s Liquidity
As of September 30, 2024, Evercore Inc. reported a current ratio of 2.69, indicating a robust liquidity position. This is an increase from a current ratio of 2.47 as of September 30, 2023. The quick ratio, which excludes inventory from current assets, stood at 2.54 for 2024, compared to 2.33 in 2023, reflecting a strong ability to meet short-term obligations.
Working Capital Trends
Working capital, calculated as current assets minus current liabilities, was $1.1 billion as of September 30, 2024, an increase from $950 million in 2023. This positive trend in working capital indicates improved financial flexibility and operational efficiency.
| Period | Current Assets ($ millions) | Current Liabilities ($ millions) | Working Capital ($ millions) |
|---|---|---|---|
| September 30, 2024 | 2,400 | 1,300 | 1,100 |
| September 30, 2023 | 2,200 | 1,250 | 950 |
Cash Flow Statements Overview
For the nine months ended September 30, 2024, cash flows from operating activities totaled $301.8 million, a significant increase from $42.3 million in the same period of 2023. This increase was primarily due to higher net income and improved management of working capital.
Investing activities used $179.1 million for the nine months ended September 30, 2024, compared to $290.5 million in 2023, reflecting a reduced need for capital expenditures and investments. Financing activities led to an outflow of $550.7 million in 2024, which included dividends paid and share repurchases.
| Cash Flow Type | 2024 ($ millions) | 2023 ($ millions) |
|---|---|---|
| Operating Activities | 301.8 | 42.3 |
| Investing Activities | (179.1) | (290.5) |
| Financing Activities | (550.7) | (510.6) |
Potential Liquidity Concerns or Strengths
Despite the strong liquidity ratios, potential concerns could arise from the financing activities that resulted in significant cash outflows, primarily due to share repurchases and dividend payments. However, the strong operating cash flow and increased working capital provide a solid buffer against short-term liquidity risks. The company’s ability to generate cash from operations remains a critical strength, enhancing its liquidity profile moving forward.
As of September 30, 2024, the total cash, cash equivalents, and restricted cash amounted to $570 million, up from $501.5 million at the end of September 2023, further solidifying the company’s liquidity position.
Is Evercore Inc. (EVR) Overvalued or Undervalued?
Valuation Analysis
To assess whether Evercore Inc. is overvalued or undervalued, we will examine key financial metrics such as the price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios.
Price-to-Earnings (P/E) Ratio
The P/E ratio for Evercore Inc. is currently $37.94. This is calculated based on the diluted net income per share attributable to Evercore Inc. common shareholders, which is $5.76 for the nine months ended September 30, 2024.
Price-to-Book (P/B) Ratio
The P/B ratio stands at 2.06. This is derived from the company's book value of equity, which is approximately $1.98 billion as of September 30, 2024, divided by the total number of shares outstanding.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is calculated at 12.37. This ratio considers the enterprise value, which is approximately $3.22 billion, and the EBITDA for the last twelve months, which is around $260 million.
Stock Price Trends
Over the last 12 months, Evercore Inc.'s stock price has fluctuated, reaching a high of $236.91 and a low of $178.02. The current stock price is approximately $222.92, indicating a 12% decline from its 12-month high.
Dividend Yield and Payout Ratios
Evercore Inc. has a dividend yield of 1.56%, with total dividends paid amounting to $34.54 million for the nine months ended September 30, 2024. The payout ratio is approximately 14.5%, calculated based on the net income attributable to Evercore Inc. of $237.84 million.
Analyst Consensus on Stock Valuation
According to the latest analyst reports, Evercore Inc. holds a consensus rating of "Hold". Out of 15 analysts, 5 recommend a "Buy", 8 suggest a "Hold", and 2 recommend a "Sell".
| Metric | Value |
|---|---|
| P/E Ratio | $37.94 |
| P/B Ratio | 2.06 |
| EV/EBITDA Ratio | 12.37 |
| 12-Month High Stock Price | $236.91 |
| 12-Month Low Stock Price | $178.02 |
| Current Stock Price | $222.92 |
| Dividend Yield | 1.56% |
| Total Dividends Paid | $34.54 million |
| Payout Ratio | 14.5% |
| Analyst Consensus | Hold |
Key Risks Facing Evercore Inc. (EVR)
Key Risks Facing Evercore Inc.
Understanding the risk factors that can impact the financial health of Evercore Inc. is crucial for investors. Below is an overview of both internal and external risks that the company faces.
Industry Competition
The investment banking sector is highly competitive, with firms competing for market share in advisory and underwriting services. For the nine months ended September 30, 2024, the value of North American M&A deals announced was $1,193 billion, an increase of 20% compared to the previous year. However, the value of completed deals decreased by 7% to $956 billion.
Regulatory Changes
Changes in regulations can pose significant risks. The company must continuously adapt to new compliance requirements, which can lead to increased operational costs. For instance, the provision for income taxes for the three months ended September 30, 2024, was $34.971 million, reflecting an effective tax rate of 28.4%, up from 25.1% the previous year.
Market Conditions
Market volatility can directly affect the company's revenue streams, particularly in advisory fees and underwriting. The net revenues for the three months ended September 30, 2024, were $734.2 million, an increase of 29% from $570.2 million in the same period last year. However, fluctuations in market conditions can impact future performance.
Operational Risks
Operational risks include challenges related to employee compensation and benefits. For the nine months ended September 30, 2024, employee compensation and benefits expense was $1.33 billion, which was a 22% increase from $1.10 billion in the same period of 2023. This increase is primarily due to higher accruals for incentive compensation and higher base salaries.
Financial Risks
Financial risks encompass factors such as credit risk and liquidity risk. The company reported total operating expenses of $1.68 billion for the nine months ended September 30, 2024, up from $1.40 billion in the prior year. Managing these expenses while ensuring adequate liquidity is essential for maintaining financial health.
Strategic Risks
Strategic risks involve the potential misalignment of the company's strategic objectives with market realities. The total number of fees from advisory and underwriting client transactions increased to 544 for the nine months ended September 30, 2024, up from 484 the previous year, indicating a positive trend. However, failure to adapt to changing market dynamics can impact future growth.
Mitigation Strategies
To mitigate these risks, Evercore Inc. focuses on diversifying its service offerings and maintaining a strong capital base. The company also invests in compliance systems to adapt to regulatory changes effectively. For example, the net income attributable to Evercore Inc. for the nine months ended September 30, 2024, was $237.8 million, a 38% increase from $172.7 million in the same period of 2023.
| Risk Category | Details | Impact on Financials |
|---|---|---|
| Industry Competition | High competition in investment banking | Revenue fluctuations due to market share changes |
| Regulatory Changes | Adapting to new compliance requirements | Increased operational costs |
| Market Conditions | Volatility affecting advisory and underwriting revenues | Direct impact on revenue streams |
| Operational Risks | Challenges related to employee compensation | Increased expenses impacting profitability |
| Financial Risks | Credit and liquidity risks | Impact on cash flow and operational stability |
| Strategic Risks | Potential misalignment of objectives | Future growth challenges |
Future Growth Prospects for Evercore Inc. (EVR)
Future Growth Prospects for Evercore Inc.
Evercore Inc. is poised for significant growth driven by several key factors:
Key Growth Drivers
- Advisory Fees: Increased by $286.5 million, or 22%, for the nine months ended September 30, 2024, compared to the same period in 2023.
- Underwriting Fees: Rose by $38.8 million, or 42%, in the same timeframe.
- Asset Management Fees: Experienced a growth of $8.6 million, or 17%.
Future Revenue Growth Projections and Earnings Estimates
Net Revenues for the nine months ended September 30, 2024, totaled $2.00 billion, reflecting a 22% increase from $1.64 billion in the previous year. The earnings estimate for the upcoming quarters suggests a continued upward trend, with projected revenues driven by robust advisory and underwriting activity.
Strategic Initiatives or Partnerships
Strategic initiatives include expanding into new markets and enhancing service offerings, which are expected to bolster revenue streams. Partnerships with other financial institutions may further enhance market penetration and service capabilities.
Competitive Advantages
Evercore's competitive advantages include:
- Strong reputation in investment banking.
- Experienced management team with a proven track record.
- Diverse service offerings across various sectors, enhancing resilience against market fluctuations.
Financial Performance Summary
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Income | $78.4 million | $52.1 million | 50% |
| Net Revenues | $734.2 million | $570.2 million | 29% |
| Advisory Fees | $592.98 million | $467.4 million | 27% |
| Underwriting Fees | $44.1 million | $30.8 million | 43% |
| Commissions and Related Revenue | $54.6 million | $48.7 million | 12% |
Investment Banking & Equities Segment Performance
In the Investment Banking & Equities segment for the nine months ended September 30, 2024, revenues totaled $1.94 billion, a 22% increase compared to $1.59 billion in 2023. Significant increases were seen in both advisory and underwriting fees, which are critical to future growth.
As of September 30, 2024, Evercore employs approximately 2,395 individuals, up from 2,230 in 2023, indicating expansion in workforce to support growth initiatives.
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Resources:
- Evercore Inc. (EVR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Evercore Inc. (EVR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Evercore Inc. (EVR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.