Moelis (MC) Earnings: A Strong Q3 Amid Sector-Wide Momentum – Is This the Time to Buy?

Moelis & Company (MC) delivered a standout performance in Q3 2025, with adjusted revenue surging 34% year-over-year to $376 million, driven by robust activity in large strategic and sponsor-driven mergers and acquisitions (M&A) and a rebound in capital markets advisory services. This growth outpaced broader industry trends, positioning the firm as a key beneficiary of a risk-on environment and regulatory tailwinds. However, investors must weigh this momentum against valuation metrics and peer comparisons to determine whether MC represents a compelling long-term opportunity.

Revenue Growth and Margin Expansion: A Tale of Strategic Focus

Moelis' Q3 results underscored its ability to capitalize on high-margin, large-ticket transactions. M&A accounted for two-thirds of revenue, with average fees rising due to a higher proportion of complex, cross-border deals. The firm's capital markets advisory business also saw performance more than double year-over-year, reflecting strong demand for private credit and debt restructuring services.

Adjusted pre-tax margins expanded dramatically to 22.2% in Q3 2025, up from 9.5% in the prior-year period. This improvement was fueled by disciplined cost management and a favorable mix of transactions. For context, Morgan Stanley's investment banking division reported a 44% year-over-year revenue increase in Q3 2025, driven by advisory and underwriting gains, but its operating margins in wealth management (30.3%)according to data suggest a different cost structure. Perella Weinberg, by contrast, faced a 41% revenue decline in Q3 2025, largely due to fewer M&A closings, though it offset some losses with growth in restructuring and liability management.

Strategic Moves in M&A and Private Capital Advisory

Moelis is doubling down on private capital advisory (PCA) as a "fourth pillar" of its business, a move that aligns with a $200+ billion secondary market in 2025. The firm has hired 10 managing directors year-to-date, including five since its last earnings report, to bolster expertise in technology, capital markets, and private assets. CEO Navid Mahmoodzadegan emphasized that PCA's growth is being driven by GP-led secondaries and fund recapitalization, areas where Perella Weinberg recently made a strategic acquisition of Devon Park Advisors to strengthen its capabilities.

Morgan Stanley, meanwhile, leveraged its scale to dominate capital markets, with equity underwriting revenue jumping 80% year-over-year. However, its broader business model-spanning wealth management and institutional banking-means it is less exposed to the high-margin, transactional nature of Moelis' core M&A and PCA businesses.

Valuation Metrics: A Mixed Picture

Moelis' valuation appears elevated relative to peers but reasonable when viewed through the lens of its growth trajectory. As of January 2026, the firm trades at a P/E ratio of 22.5x, above its estimated fair value of 18.3x according to analysis and the peer average of 18.5x. Its EV/EBITDA ratio of 18.5x is also higher than Morgan Stanley's forward EV/EBITDA of 12.7x, though Morgan Stanley's diversified revenue streams and lower margin volatility justify a lower multiple.

Perella Weinberg's valuation is more opaque, with an enterprise value of $2.2 billion as of Q3 2025, but its revenue decline and lack of EV/EBITDA data make direct comparisons challenging. For Moelis, the key question is whether its premium valuation is justified by its ability to sustain margin expansion and capture market share in PCA-a sector expected to grow as private capital managers seek liquidity solutions.

Capital Allocation and Balance Sheet Strength

Moelis' financial discipline further strengthens its case. The firm ended Q3 with a $619.9 million cash position and it returned $200 million to shareholders through dividends and share repurchases. This contrasts with Perella Weinberg's $186 million cash position and focus on reinvesting in talent, while Morgan Stanley's $4.45 billion net income reflects its scale but also higher operational complexity.

Is This the Time to Buy?

Moelis' Q3 results highlight a firm that is outperforming peers in a sector-wide upturn, with a clear strategic focus on high-growth areas like PCA. However, its valuation premium-while justified by margin expansion and revenue growth-requires careful scrutiny. Investors should consider:
1. Regulatory Tailwinds: A more accommodating regulatory environment in the U.S. is likely to sustain large transaction volumes according to earnings commentary.
2. 3. Margin Sustainability: Continued cost discipline and a favorable transaction mix will be critical to maintaining margins above 20%.

For long-term investors, Moelis appears undervalued relative to its growth potential but overvalued compared to peers like Morgan Stanley. A strategic entry point may exist if the stock corrects on broader market concerns, particularly as the firm's PCA business gains traction.