PJT Partners Inc. (NYSE: PJT)

Sector: Financial Services Industry: Capital Markets CIK: 0001626115
Market Cap 4.30 Bn
P/B 18.83
P/E 24.17
P/S 2.60
ROIC (Qtr) 37.65
Div Yield % 0.74
Rev 1y % (Qtr) 37.01
Total Debt (Qtr) 413.21 Mn
Debt/Equity (Qtr) 1.81

About

PJT Partners Inc., commonly known as PJT, is a leading global investment bank that specializes in providing strategic advisory, restructuring and special situations, and alternative asset advisory services. The company, which trades under the symbol PJT, has established a strong reputation in the financial services industry for its high-quality advice and old-world client service. PJT operates in a highly competitive industry, with a diverse range of competitors including other investment banks, private equity firms, hedge funds, and corporate...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 566.31M provides robust 1.37x coverage of total debt 413.21M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 1.52B provides 3.68x coverage of total debt 413.21M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 537.17M exceeds capital expenditure of 29.13M by 18.44x, indicating strong organic growth funding capability.
  • Tangible assets of 1.52B provide exceptional 221.53x coverage of deferred revenue 6.86M, showing strong service capability backing.
  • Operating cash flow of 566.31M provides strong 82.60x coverage of deferred revenue 6.86M, indicating service delivery capability.

Bear case

  • Operating cash flow of 566.31M provides thin coverage of dividend payments of (24.40M) with a -23.21 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 400.45M provide limited coverage of acquisition spending of (10.73M), which is -37.33x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 566.31M shows concerning coverage of stock compensation expenses of 224.76M, with a 2.52 ratio indicating potential earnings quality issues.
  • Operating cash flow of 566.31M is outpaced by equity issuance of (240.02M) (-2.36 ratio), indicating concerning reliance on equity markets for funding operations.
  • Operating cash flow of 566.31M shows concerning coverage of minority interest expenses of 123.50M, which is 4.59x, suggesting complex corporate structure 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 Percentile
EV to Assets EV to Assets 2.62 1.07
EV to Cash from Ops. EV/CFO 7.95 15.33
EV to Debt EV to Debt 10.90 21.89
EV to EBIT EV/EBIT 22.59 -0.80
EV to EBITDA EV/EBITDA 12.75 11.20
EV to Free Cash Flow [EV/FCF] EV/FCF 8.38 43.08
EV to Market Cap EV to Market Cap 1.05 -0.05
EV to Revenue EV/Rev 2.72 12.82
Price to Book Value [P/B] P/B 18.83 3.09
Price to Earnings [P/E] P/E 24.17 6.20
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 7.30 4.22
Dividend Payout Ratio % Div Payout % (Qtr) 14.40 10.37
Dividend per Basic Share Div per Share (Qtr) 1.00 0.70
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 4.79 -8.68
Interest Coverage Interest Coverage 0.00 37.53
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -762.66 -12,429.64
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 169.06 1,588.78
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 4.88
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 64.87 270.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 41.69 333.57
EBIT Growth (1y) % EBIT 1y % (Qtr) 48.34 3,103.22
EBT Growth (1y) % EBT 1y % (Qtr) 48.34 3,039.53
EPS Growth (1y) % EPS 1y % (Qtr) 64.15 24.25
FCF Growth (1y) % FCF 1y % (Qtr) 17.90 -80.08
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 23.16 51.33
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.96 0.42
Cash Payout Ratio Cash Payout (Qtr) 0.04 -0.08
Cash Ratio Cash Ratio 0.00 2.01
Current Ratio Current Ratio 0.00 3.47
Debt to Equity Ratio Debt/Equity (Qtr) 1.81 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 Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 13.90 76.68
EBIT Margin % EBIT Margin % (Qtr) 12.04 46.81
EBT Margin % EBT Margin % (Qtr) 12.04 58.57
Gross Margin % Gross Margin % (Qtr) 100.00 53.60
Net Profit Margin % Net Margin % (Qtr) 10.80 29.41