Moelis & Co (MC) stock intrinsic value fair value estimate & owner earnings analysis

Moelis & Company is an independent investment bank. It earns fees advising companies on mergers, acquisitions, restructurings and capital raising, with 1,416 employees, 178 Managing Directors and over 20 offices as of February 2026. About 84% of 2025 revenue of $1.52 billion came from the United States, 10% from Europe and 6% from the rest of the world. The firm has little in the way of plant or debt. Its costs are almost entirely people, and pay is heavily weighted to bonuses and equity, which is why the way we count owner earnings matters. How we measure earnings. We start with cash from operations, remove the swings from bonus accruals and receivables (in 2021 record bonuses accrued $283 million of cash that was paid out in 2022), and then subtract equity compensation in full. Moelis paid $230 million in stock-based pay in 2025 and it is a genuine cost to shareholders. Capex is small (mostly leasehold improvements). On this basis owner earnings per share were roughly $2.07 (2019), $3.74 (2020), $6.08 (2021), $3.02 (2022), negative $0.69 (2023), $2.38 (2024) and $3.30 (2025). Advisory revenue swings with deal activity, so we use the middle of that full cycle, about $3.00 per share, rather than the 2021 peak or the 2023 trough. Years before 2019 are not shown because the share counts reported then leave out most of the exchangeable partnership units and are not comparable. Growth check. Owner earnings per share rose about 39% in 2025, but that reflects a recovery in deal fees, not a contracted or repeatable growth stream. Net income for the first half of 2026 was $97 million versus $101 million a year earlier, and equity compensation was lower, so we see no acceleration. We therefore start the base case flat at $3.00 per share, below the 2025 actual, and give no credit for revenue growth. The 95 Managing Directors added over five years are already reflected in current results; we do not assume they lift earnings further, because fee volume depends on the deal market, which we cannot name or evidence. Base case, about $36 per share. Earnings hold at about $3.00 per share for ten years, then fade about 5% a year. What persists is a firm that has been profitable in every year we examined except the 2023 slump, and that has retained and added senior bankers. There is no contract behind the fee stream, so we do not assume permanence: we let it decay slowly rather than run flat forever. Bear case, about $15 per share. Deal activity stays near the 2022 to 2024 average of about $1.50 per share for ten years, and departures of senior bankers, which the company itself flags as a key risk because Managing Directors can and do move to competitors, erode the franchise about 10% a year afterward. 2023 shows how quickly earnings can turn negative when bonuses and equity pay stay high while fees fall. Bull case, about $60 per share. The firm sustains about $4.50 per share for ten years, roughly midway between 2025 and the 2021 peak, as its larger Managing Director bench, 9 hired in 2025, operates at 2025 fee capacity, then fades about 3% a year afterward. We assume no deal boom; this simply credits the earnings power already shown in 2021 and 2025 lasting longer. Things to know. Founder Kenneth Moelis controls the company's Class B shares (ten votes per share while a threshold is met), and a Delaware court ruled in 2024 that certain governance rights in the stockholder agreement were unenforceable, with the company appealing; we do not model any effect. Diluted share counts include exchangeable partnership units only when they are dilutive, so 2023 (a loss year) is shown on a smaller share count than we would otherwise use. The company has an office in China but 2025 revenue there is small and not reported separately. What would make us wrong: a sustained multi-year deal drought or a wave of Managing Director departures would push toward the bear case, while a sustained 2021-type fee level would exceed the bull case.