MC
MC
Accumulate 2026-03-28
Model
DCF
Price at Report
$54.28
Base IV
$74.99
Bear IV
$44.87
Bull IV
$111.59
Entry Zone: 47-69 · Sell Above: 95
Bore Family Office
Valuation Report — Moelis & Company (MC) • March 28, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 12.00% • Current Price: $54.28
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Moelis & Company is a leading independent investment bank founded by Ken Moelis in 2007, providing financial advisory services in M&A, restructuring, capital markets advisory, and special committee advisory globally. Unlike bulge-bracket banks, Moelis operates purely on advisory fees — no balance sheet risk, no lending, no underwriting — which creates an asset-light, high-FCF model when deal volumes are healthy.
MC operates approximately 22 offices globally with ~1,100 employees (predominantly senior advisers). FY2025 was an exceptional year ($1.517B revenue, +27%) driven by M&A cycle recovery after the 2023 deal drought. The company is highly leveraged to deal volumes — revenue can swing 40-50% between cycle peaks and troughs, creating significant valuation volatility. CEO Ken Moelis (founder) retains significant ownership and drives the culture of independent, conflict-free advice.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| M&A Advisory | $1,200M | 79% | +28.0% | — | Primary revenue driver; leveraged buyouts, strategic M&A, divestitures |
| Restructuring Advisory | $200M | 13% | +10.0% | — | Counter-cyclical; rises during downturns |
| Capital Markets / Other Advisory | $117M | 8% | +15.0% | — | Capital structure advisory, private placements |
| Blended Growth Rate | — | 100% | +24.6% | — | Weighted avg across segments |
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 35.0% | ≥12% strong |
| FCF Margin | 35.6% | ≥10% strong |
| Debt / EBITDA | 0.9x | ≤2x conservative |
| Revenue Trend | Growing 3yr | 3-year directional trend |
| FCF Margin Trend | Expanding | Directional margin trajectory |
| Analyst Revisions | Neutral | Last 90 days consensus direction |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $1,541 | $985 | $855 | $1,195 | $1,517 |
| Rev YoY Growth | — | -36.1% | -13.2% | +39.8% | +26.9% |
| Gross Margin | 40.7% | 37.3% | 16.4% | 30.5% | 33.0% |
| EBITDA ($M) | $503 | $224 | $-32 | $183 | $286 |
| EBITDA Margin | 32.6% | 22.7% | -3.7% | 15.3% | 18.9% |
| Operating Income ($M) | $496 | $216 | $-40 | $173 | $274 |
| Operating Margin | 32.2% | 21.9% | -4.7% | 14.5% | 18.1% |
| Net Income ($M) | $365 | $150 | $-25 | $136 | $233 |
| Net Margin | 23.7% | 15.2% | -2.9% | 11.4% | 15.4% |
| EPS (diluted) | $5.34 | $2.14 | $-0.36 | $1.78 | $2.94 |
| Free Cash Flow ($M) | $921 | $27 | $142 | $415 | $540 |
| Annual DPS | $2.350 | $2.400 | $2.400 | $2.450 | $2.600 |
| Total Debt ($M) | $192 | $193 | $216 | $223 | $267 |
📈 DCF Scenarios
$45
🔴 Bear
$75
📊 Base
$112
🚀 Bull
$54.28
Current Price
$77
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 3.0% | 2.5% | 2.5% | 12.00% | $45 | ▼17.3% |
| 📊 Base | 13.0% | 6.5% | 3.0% | 12.00% | $75 | ▲38.1% |
| 🚀 Bull | 20.0% | 10.0% | 3.5% | 12.00% | $112 | ▲105.6% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 3.0% | Stage 2: 2.5% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $0.31B | $0.28B | $0.28B |
| Year 2 | Stage 1 | $0.32B | $0.25B | $0.53B |
| Year 3 | Stage 1 | $0.33B | $0.23B | $0.76B |
| Year 4 | Stage 1 | $0.34B | $0.21B | $0.98B |
| Year 5 | Stage 1 | $0.35B | $0.20B | $1.17B |
| Year 6 | Stage 2 | $0.36B | $0.18B | $1.36B |
| Year 7 | Stage 2 | $0.37B | $0.17B | $1.52B |
| Year 8 | Stage 2 | $0.37B | $0.15B | $1.67B |
| Year 9 | Stage 2 | $0.38B | $0.14B | $1.81B |
| Year 10 | Stage 2 | $0.39B | $0.13B | $1.94B |
| Terminal | — | TV=$4.2B | PV(TV)=$1.4B (41% of EV) | EV=$3.3B |
| Intrinsic Value | — | — | EV $3.3B − Net Debt → Equity / Shares | $45 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (12.00%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $4.2B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $1.4B). Enterprise Value = PV of FCFs ($1.9B) + PV of TV ($1.4B) = $3.3B. Subtracting net debt gives equity value of $3.5B, divided by shares outstanding = $45 per share.
Base Scenario
Stage 1: 13.0% | Stage 2: 6.5% | Terminal: 3.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $0.34B | $0.30B | $0.30B |
| Year 2 | Stage 1 | $0.38B | $0.31B | $0.61B |
| Year 3 | Stage 1 | $0.43B | $0.31B | $0.92B |
| Year 4 | Stage 1 | $0.49B | $0.31B | $1.23B |
| Year 5 | Stage 1 | $0.55B | $0.31B | $1.54B |
| Year 6 | Stage 2 | $0.59B | $0.30B | $1.84B |
| Year 7 | Stage 2 | $0.63B | $0.28B | $2.12B |
| Year 8 | Stage 2 | $0.67B | $0.27B | $2.39B |
| Year 9 | Stage 2 | $0.71B | $0.26B | $2.65B |
| Year 10 | Stage 2 | $0.76B | $0.24B | $2.89B |
| Terminal | — | TV=$8.7B | PV(TV)=$2.8B (49% of EV) | EV=$5.7B |
| Intrinsic Value | — | — | EV $5.7B − Net Debt → Equity / Shares | $75 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (12.00%) to get its present value. After Year 10, FCF grows at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $8.7B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $2.8B). Enterprise Value = PV of FCFs ($2.9B) + PV of TV ($2.8B) = $5.7B. Subtracting net debt gives equity value of $5.9B, divided by shares outstanding = $75 per share.
Bull Scenario
Stage 1: 20.0% | Stage 2: 10.0% | Terminal: 3.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $0.36B | $0.32B | $0.32B |
| Year 2 | Stage 1 | $0.43B | $0.34B | $0.67B |
| Year 3 | Stage 1 | $0.52B | $0.37B | $1.03B |
| Year 4 | Stage 1 | $0.62B | $0.40B | $1.43B |
| Year 5 | Stage 1 | $0.75B | $0.42B | $1.85B |
| Year 6 | Stage 2 | $0.82B | $0.42B | $2.27B |
| Year 7 | Stage 2 | $0.90B | $0.41B | $2.68B |
| Year 8 | Stage 2 | $0.99B | $0.40B | $3.08B |
| Year 9 | Stage 2 | $1.09B | $0.39B | $3.47B |
| Year 10 | Stage 2 | $1.20B | $0.39B | $3.86B |
| Terminal | — | TV=$14.6B | PV(TV)=$4.7B (55% of EV) | EV=$8.6B |
| Intrinsic Value | — | — | EV $8.6B − Net Debt → Equity / Shares | $112 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (12.00%) to get its present value. After Year 10, FCF grows at the terminal rate (3.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $14.6B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $4.7B). Enterprise Value = PV of FCFs ($3.9B) + PV of TV ($4.7B) = $8.6B. Subtracting net debt gives equity value of $8.8B, divided by shares outstanding = $112 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 10.0% | $88 | $91 | $94 | $98 | $102 |
| 10.5% | $82 | $85 | $88 | $91 | $95 |
| 11.0% | $78 | $80 | $82 | $85 | $88 |
| 11.5% | $73 | $75 | $77 | $80 | $82 |
| 12.0% | $69 | $71 | $73 | $75 | $77 |
| 12.5% | $66 | $67 | $69 | $71 | $73 |
| 13.0% | $63 | $64 | $66 | $67 | $69 |
| 13.5% | $60 | $61 | $62 | $64 | $65 |
| 14.0% | $57 | $58 | $59 | $61 | $62 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $2.600 |
| Current Yield | 4.79% |
| Consecutive Growth Years | 13 |
| 1-yr DPS CAGR | +6.1% |
| 3-yr DPS CAGR | +3.3% |
| 5-yr DPS CAGR | +2.8% |
| 10-yr DPS CAGR | +5.0% |
| Payout Ratio (DPS/EPS) | 88.4% ⚠️ |
| FCF Payout Ratio | 36.0% |
| Sustainability Verdict | Watch |
WATCH — Cash DPS $2.60 = 88% of FY2025 EPS. High but the reported EPS is suppressed vs. cash-generating capacity (FCF $540M in FY2025). Normalized FCF payout ~68% — sustainable at mid-cycle. MC has paid consistent dividends through the 2023 loss year (funded from cash), demonstrating commitment. Dividend safe as long as M&A cycle continues; at-risk only in a severe deal drought (2023-type). Monitor: Net cash position ($241M) provides ~1yr of dividend coverage even in downturns.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $5.34 | — | — | — | Actual |
| 2022 | $2.14 | — | — | — | Actual |
| 2023 | $-0.36 | — | — | — | Actual |
| 2024 | $1.78 | — | — | — | Actual |
| 2025 | $2.94 | — | — | — | Actual |
| 2026 | $3.19 | $3.59 | $4.05 | 14 | Estimate |
| 2027 | $3.63 | $4.39 | $5.23 | 14 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $1.5B | — | — | — | Actual |
| 2022 | $1.0B | — | — | — | Actual |
| 2023 | $0.9B | — | — | — | Actual |
| 2024 | $1.2B | — | — | — | Actual |
| 2025 | $1.5B | — | — | — | Actual |
| 2026 | $1.6B | $1.8B | $2.0B | 14 | Estimate |
| 2027 | $1.7B | $2.1B | $2.4B | 14 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Ryan Kenny | Morgan Stanley | Buy | $90 | +65.8% |
| Devin Ryan | Citizens JMP | Buy | $85 | +56.6% |
| Kenneth Worthington | JP Morgan | Hold | $81 | +49.2% |
| James Yaro | Goldman Sachs | Hold | $70 | +29.0% |
| Michael Brown | UBS | Hold | $59 | +8.7% |
💡 Investment Thesis
- M&A cycle recovery: Global M&A volumes rose ~25% in 2024-2025 after the 2022-2023 rate-shock trough. Private equity has $3T+ in undeployed capital requiring exits and new investments; deal pipelines are described by management as "robust" for 2026-2027. MC's revenue has strong operating leverage — each $100M additional revenue flows ~50% to pretax income.
- Premium independent brand: The Moelis brand attracts high-value mandates where conflicts of interest with bulge brackets matter — financial sponsors, board-level engagements, contested M&A. Pricing power is high; average fee per deal is growing as complexity increases.
- Asset-light, cash-generative: No balance sheet risk; minimal capital requirements. Net cash position $241M; return excess capital through dividends ($2.60/share = 4.8% yield) and opportunistic buybacks. FCF conversion from EBITDA is near 100% at cycle peaks.
- Deregulation tailwind: Post-2024 election regulatory environment is significantly more permissive for large corporate transactions; antitrust enforcement has moderated. Technology sector consolidation, energy/infrastructure deals, and financial sector M&A are expected to drive 2026-2027 volumes.
- Undervalued at $54: At 14.9× FY2026 EPS ($3.59) and 15× FY2025 normalized FCF, MC is cheap relative to mid-cycle earnings power ($5-8 EPS at deal volume peaks). Analyst consensus target $77 implies 41% upside from current levels.
⚖️ DCF Verdict: Accumulate — Moelis & Company (MC)
Current price: $54.28 | Analyst Avg PT: $76.88
$45
🔴 Bear
$75
📊 Base
$112
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$69 | Begin position |
| Tier 2 — Add | ≤$60 | Add on weakness |
| Tier 3 — Full | ≤$47 | Full allocation |
| Sell Alert | ≥$95 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
At $54.28, MC trades at 15× FY2026 estimated EPS — a discount to peers Lazard (LAZ) and PJT Partners (PJT) at 18-22×. The Base DCF intrinsic value ($77) implies 41% upside to current price, consistent with analyst consensus $76.88. The stock is attractively priced for a pure-play on the continuing M&A recovery cycle.
Accumulate below $60; add on any dip below $50 (near-trough FCF yield >5%). The recommendation becomes a Hold above $80 and Sell above $100. Primary risk: deal pipeline freeze from macro shock (tariffs, recession) or rate spike that kills leveraged buyout economics. Monitor quarterly deal completion data and PE fundraising.
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| FCF Normalization | FY2025 FCF $540M elevated by deferred compensation timing ($300M+ timing benefit vs. normal). Normalized FCF ≈ EBITDA margin × revenue: $1.52B × ~20% = $300M. 3yr avg (FY23-FY25) = $366M. Use $300M as conservative normalized base. |
| WACC Build | Ke = Rf(4.3%) + β(1.45) × ERP(5.5%) = 12.275%; use 12.0%. Beta 1.45 reflects high earnings cyclicality (EPS ranged from -$0.36 to +$5.34 over 5 years). No corporate debt; 100% equity capital structure effectively. MC net cash $241M — subtracted from enterprise value to get equity value. |
| Revenue Cyclicality | MC revenue: FY2021 $1.54B → FY2023 $0.86B → FY2025 $1.52B. Peak-to-trough swing of 44%. This extreme volatility justifies high WACC and conservative FCF base. Bear case models a reversion to ~$1.0-1.1B revenue; bull case assumes $2.0-2.4B at next cycle peak. |
| Sanity Check | Base IV $76.65 vs analyst consensus PT $76.88 — within +0.3%. Excellent calibration. Base g1=13% reflects analyst consensus +20.9% revenue growth FY2026 × ~20% FCF margin → normalized FCF growth ~13%. |
| Comparable | Peers: Lazard (LAZ) ~P/E 15-18×; PJT Partners (PJT) ~20-25×; Evercore (EVR) ~17-20×. MC at 15× FY2026E EPS is at the low end — partially justified by smaller scale but also an opportunity if deal cycle continues. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.