Perella Weinberg (PWP)

Financial advisory firm Perella Weinberg Partners (NASDAQ:PWP) missed Wall Street’s revenue expectations in Q3 CY2025, with sales falling 40.8% year on year to $164.6 million. Its non-GAAP profit of $0.13 per share was 10.3% below analysts’ consensus estimates.

Company Overview

Founded in 2006 by veteran investment bankers Joseph Perella and Peter Weinberg during a wave of boutique advisory firm launches, Perella Weinberg Partners (NASDAQ:PWP) is a global independent advisory firm that provides strategic and financial advice to corporations, financial sponsors, and government institutions.

Investment banks and brokerages facilitate capital raises, mergers and acquisitions, and securities trading. The sector benefits from corporate activity during economic expansion, increased retail trading participation, and advisory opportunities in emerging sectors. Headwinds include economic cycle vulnerability affecting deal flow, compressed trading commissions due to electronic platforms, and regulatory capital requirements constraining certain higher-risk activities.

Perella Weinberg Partners competes with independent advisory firms like Evercore (NYSE:EVR), Lazard (NYSE:LAZ), and PJT Partners (NYSE:PJT), as well as the investment banking divisions of major financial institutions such as Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), and JPMorgan Chase (NYSE:JPM).

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Perella Weinberg’s revenue grew at a decent 8.6% compounded annual growth rate over the last five years. Its growth was slightly above the average financials company and shows its offerings resonate with customers.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Perella Weinberg’s annualized revenue growth of 10.6% over the last two years is above its five-year trend, suggesting some bright spots. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Perella Weinberg missed Wall Street’s estimates and reported a rather uninspiring 40.8% year-on-year revenue decline, generating $164.6 million of revenue.

Revenue growth is one major determinant of business quality, and the efficiency of operations is another. For Investment Banking & Brokerage companies, we look at pre-tax profit rather than the operating margin that defines sectors such as consumer, tech, and industrials.

Financials companies manage interest-bearing assets and liabilities, making the interest income and expenses included in pre-tax profit essential to their profit calculation. Taxes, being external factors beyond management control, are appropriately excluded from this alternative margin measure.

Over the last four years, Perella Weinberg’s pre-tax profit margin has fallen by 4 percentage points, going from 3.6% to 7.6%. It has also expanded by 22.4 percentage points on a two-year basis, showing its expenses have consistently grown at a slower rate than revenue. This typically signals prudent management.

Perella Weinberg’s pre-tax profit margin came in at 7% this quarter. This result was 6 percentage points worse than the same quarter last year.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Perella Weinberg’s full-year EPS dropped 186%, or 30% annually, over the last four years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, Perella Weinberg’s low margin of safety could leave its stock price susceptible to large downswings.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

Perella Weinberg’s EPS grew at an astounding 25.8% compounded annual growth rate over the last two years, higher than its 10.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Perella Weinberg’s earnings to better understand the drivers of its performance. While we mentioned earlier that Perella Weinberg’s pre-tax profit margin declined this quarter, a two-year view shows its margin has expanded. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q3, Perella Weinberg reported adjusted EPS of $0.13, down from $0.34 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects Perella Weinberg’s full-year EPS of $0.76 to grow 76%.

Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.

Over the last five years, Perella Weinberg has averaged an ROE of negative 11.4%, a bad result not only in absolute terms but also relative to the majority of firms putting up 25%+. It also shows that Perella Weinberg has little to no competitive moat.

Perella Weinberg reported $186,000 of cash and $0 of debt on its balance sheet in the most recent quarter.

Given the company has no debt, leverage is not an issue here.

We struggled to find many positives in these results. Its revenue missed and its EPS fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock remained flat at $18.85 immediately after reporting.

Updated: December 4, 2025 at 11:28 PM EST

Before investing in or passing on Perella Weinberg, we urge you to understand the company’s business quality (or lack thereof), valuation, and the latest quarterly results - in that order.

Perella Weinberg falls short of our quality standards. Although its revenue growth was decent over the last five years and is expected to accelerate over the next 12 months, its declining EPS over the last four years makes it a less attractive asset to the public markets. And while the company’s expanding pre-tax profit margin shows the business has become more efficient, the downside is its relatively low ROE suggests management has struggled to find compelling investment opportunities.

Perella Weinberg’s P/E ratio based on the next 12 months is 15.6x. This multiple tells us a lot of good news is priced in - we think there are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $23.25 on the company (compared to the current share price of $18.67).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.