Evercore Inc. (EVR) Stock Analysis and Metrics

Sector: Financial Services Industry: Capital Markets CIK: 0001360901

Market Cap 13.21 Bn

P/B 7.30

P/E 25.01

P/S 3.73

ROIC (Qtr) 17.67

Div Yield % 0.96

Rev 1y % (Qtr) 41.49

Total Debt (Qtr) 1.13 Bn

Debt/Equity (Qtr) 0.63

About

Evercore Inc., a renowned independent investment banking firm, trades under the symbol EVR and operates within the financial services industry. The company's main business activities revolve around providing strategic advisory, capital markets, and wealth management services to clients across the globe. With a significant presence in various regions, including Germany, Hong Kong, Singapore, the United Arab Emirates, and the United Kingdom, Evercore's services extend to a diverse clientele. The company's Investment Banking & Equities segment, which...

Evercore Inc., a renowned independent investment banking firm, trades under the symbol EVR and operates within the financial services industry. The company's main business activities revolve around providing strategic advisory, capital markets, and wealth management services to clients across the globe. With a significant presence in various regions, including Germany, Hong Kong, Singapore, the United Arab Emirates, and the United Kingdom, Evercore's services extend to a diverse clientele.

The company's Investment Banking & Equities segment, which accounted for 97% of its revenues in 2023, offers strategic advisory, liability management and restructuring, capital markets advisory, and private capital advisory and fundraising services. Evercore's investment banking business excels in advising clients on intricate transactions, including mergers and acquisitions, divestitures, and recapitalizations, demonstrating its proficiency in navigating the complexities of global capital markets. Furthermore, Evercore's equities business, Evercore ISI, stands as a top independent research firm, delivering high-quality research and analysis to institutional investors while providing access to numerous investment opportunities.

Evercore's Investment Management segment caters to high-net-worth individuals, foundations, and endowments, offering customized investment solutions through its private equity, hedge funds, and mutual funds sub-segments. By focusing on clients' unique needs and goals, Evercore's investment management business has garnered a strong reputation in the industry.

Evercore's competitive advantage lies in its independence and expertise in advising clients on complex transactions. This has enabled the company to maintain a strong market position despite intense competition from industry leaders such as Goldman Sachs, Morgan Stanley, and JPMorgan Chase. Moreover, Evercore's human capital management strategy prioritizes attracting, developing, and retaining top talent, fostering a culture centered on core values like client focus, integrity, excellence, respect, diversity, equity, and inclusion.

Regulatory compliance is crucial for Evercore, as it is subject to oversight from various government agencies and self-regulatory organizations, including the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), and Financial Conduct Authority (FCA) in the United Kingdom.

Evercore's brand names and trade names include Investment Banking & Equities, Investment Management, Evercore ISI, private equity, hedge funds, and mutual funds. These entities represent Evercore's commitment to delivering high-quality services and solutions tailored to its clients' needs.

Price action

Investment thesis

Bull case

Strong operating cash flow of 1.14B provides robust 1x coverage of total debt 1.13B, indicating excellent debt servicing capability and financial flexibility.
Healthy cash reserves of 851.91M provide 7.76x coverage of short-term debt 109.72M, demonstrating strong liquidity position and minimal refinancing risk.
Operating cash flow of 1.14B provides exceptional 25.45x coverage of minority interest expenses 44.61M, showing strong core operations.
Strong tangible asset base of 4.29B provides 3.79x coverage of total debt 1.13B, indicating robust asset backing and low credit risk.
Robust free cash flow of 1.06B exceeds capital expenditure of 78.47M by 13.47x, indicating strong organic growth funding capability.

Bear case

Operating cash flow of 1.14B barely covers its investment activities of (334.79M), with a coverage ratio of -3.39, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Operating cash flow of 1.14B provides thin coverage of dividend payments of (142.76M) with a -7.95 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
The company's operating cash flow of 1.14B shows concerning coverage of stock compensation expenses of 645.18M, with a 1.76 ratio indicating potential earnings quality issues.
Operating cash flow of 1.14B is outpaced by equity issuance of (517.57M) (-2.19 ratio), indicating concerning reliance on equity markets for funding operations.
Retained earnings of 2.41B provide limited buffer against comprehensive income items of (15.18M), which is -159x, indicating elevated exposure to market risks.

Peer comparison

Companies in the Capital Markets

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	GS	Goldman Sachs Group Inc	284.23 Bn	17.94	4.84	911.32 Bn
2	MS	Morgan Stanley	279.63 Bn	17.97	4.05	353.12 Bn
3	SCHW	Schwab Charles Corp	179.33 Bn	23.09	7.83	27.59 Bn
4	HOOD	Robinhood Markets, Inc.	106.92 Bn	48.73	25.43	0.00 Bn
5	CRCL	Circle Internet Group, Inc.	40.97 Bn	261.00	24.22	0.15 Bn
6	IBKR	Interactive Brokers Group, Inc.	28.23 Bn	30.79	4.75	28.43 Bn
7	LPLA	LPL Financial Holdings Inc.	27.60 Bn	33.13	1.77	7.52 Bn
8	FUTU	Futu Holdings Ltd	22.89 Bn	18.13	8.54	1.75 Bn

Industry comparisons

Current Valuation	Value	Ind Avg
EV to Assets EV to Assets	3.06	1.07
EV to Cash from Ops. EV/CFO	11.91	15.33
EV to Debt EV to Debt	11.94	21.89
EV to EBIT EV/EBIT	20.83	-0.80
EV to EBITDA EV/EBITDA	18.26	11.20
EV to Free Cash Flow [EV/FCF] EV/FCF	12.80	43.08
EV to Market Cap EV to Market Cap	1.02	-0.05
EV to Revenue EV/Rev	3.82	12.82
Price to Book Value [P/B] P/B	7.30	3.09
Price to Earnings [P/E] P/E	25.01	6.20

Dividend Metrics	Value	Ind Avg
Dividend Coverage Ratio Div Coverage (Qtr)	3.70	4.22
Dividend Payout Ratio % Div Payout % (Qtr)	24.00	10.37
Dividend per Basic Share Div per Share (Qtr)	3.28	0.70
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr)	12.02	-8.68
Interest Coverage Interest Coverage	0.00	37.53

Growth Metrics	Value	Ind Avg
Capex Growth (1y) % Capex 1y % (Qtr)	-329.77	-12,429.64
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr)	59.80	1,588.78
Dividend Growth (1y) % Div 1y % (Qtr)	5.13	4.88
EBIAT Growth (1y) % EBIAT 1y % (Qtr)	64.82	270.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr)	57.61	333.57
EBIT Growth (1y) % EBIT 1y % (Qtr)	60.42	3,103.22
EBT Growth (1y) % EBT 1y % (Qtr)	60.42	3,039.53
EPS Growth (1y) % EPS 1y % (Qtr)	63.17	24.25
FCF Growth (1y) % FCF 1y % (Qtr)	51.17	-80.08
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr)	27.06	51.33

Liquidity Ratios	Value	Ind Avg
Asset Utilization Ratio Asset Util Ratio (Qtr)	0.80	0.42
Cash Payout Ratio Cash Payout (Qtr)	0.12	-0.08
Cash Ratio Cash Ratio (Qtr)	0.74	2.01
Current Ratio Curr Ratio (Qtr)	2.71	3.47
Debt to Equity Ratio Debt/Equity (Qtr)	0.63	1.46
Interest Cover Ratio Interest Cover Ratio	0.00	37.53
Times Interest Earned Times Interest Earned	0.00	37.53

Profitability	Value	Ind Avg
EBITDA Margin % EBITDA Margin % (Qtr)	19.80	76.68
EBIT Margin % EBIT Margin % (Qtr)	18.33	46.81
EBT Margin % EBT Margin % (Qtr)	18.33	58.57
Gross Margin % Gross Margin % (Qtr)	100.00	53.60
Net Profit Margin % Net Margin % (Qtr)	14.90	29.41

Evercore Inc. (NYSE: EVR)

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Price action

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Bull case

Bear case

Peer comparison

Industry comparisons

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