Evercore (EVR)

Investment banking firm Evercore (NYSE:EVR) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 40.5% year on year to $1.04 billion. Its non-GAAP profit of $3.48 per share was 5.5% above analysts’ consensus estimates.

Company Overview

Founded in 1995 as a boutique advisory firm focused on independence and client trust, Evercore (NYSE:EVR) is an independent investment banking firm that provides strategic advisory, capital markets, and wealth management services to corporations, financial sponsors, and high-net-worth individuals.

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.

Evercore competes with other independent advisory firms like Lazard (NYSE:LAZ), PJT Partners (NYSE:PJT), and Moelis & Company (NYSE:MC), 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).

Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Evercore grew its revenue at a solid 11.9% compounded annual growth rate. Its growth surpassed the average financials company and shows its offerings resonate with customers, a great starting point for our analysis.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Evercore’s annualized revenue growth of 19.4% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 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, Evercore reported magnificent year-on-year revenue growth of 40.5%, and its $1.04 billion of revenue beat Wall Street’s estimates by 6.1%.

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.

This is because for financials businesses, interest income and expense should be factored into the definition of profit but taxes - which are largely out of a company's control - should not.

Over the last four years, Evercore’s pre-tax profit margin has risen by 11.8 percentage points, going from 31.3% to 19.5%. Luckily, it seems the company has recently taken steps to address its expense base as its pre-tax profit margin expanded by 1.2 percentage points on a two-year basis.

Evercore’s pre-tax profit margin came in at 20.9% this quarter. This result was 4.3 percentage points better than the same quarter last year.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Evercore’s EPS grew at a solid 14.3% compounded annual growth rate over the last five years, higher than its 11.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Evercore, its two-year annual EPS growth of 27.1% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q3, Evercore reported adjusted EPS of $3.48, up from $2.04 in the same quarter last year. This print beat analysts’ estimates by 5.5%. Over the next 12 months, Wall Street expects Evercore’s full-year EPS of $12.80 to grow 30.2%.

Financial institutions with multiple business lines manage complex balance sheets that span various financial activities. Market valuations reflect this operational complexity, prioritizing balance sheet strength and sustainable book value growth across all business segments.

When analyzing this sector, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value and provides insight into the institution’s capital position across diverse operations. Traditional metrics like EPS are helpful but face distortion from the complexity of diversified operations, M&A activity, and various accounting rules that can obscure true performance across multiple business lines.

Evercore’s TBVPS grew at an impressive 13.7% annual clip over the last five years. However, TBVPS growth has recently decelerated to 5.8% annual growth over the last two years (from $35.29 to $39.54 per share).

Return on equity (ROE) reveals the profit generated per dollar of shareholder equity, which represents a key source of bank funding. Banks maintaining elevated ROE levels tend to accelerate wealth creation for shareholders via earnings retention, buybacks, and distributions.

Over the last five years, Evercore has averaged an ROE of 34.7%, exceptional for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows Evercore has a strong competitive moat.

Evercore reported $896.6 million of cash and $360.3 million of debt on its balance sheet in the most recent quarter.

Given the company has more cash than debt, leverage is not an issue here.

We enjoyed seeing Evercore beat analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock remained flat at $323 immediately following the results.

Updated: December 4, 2025 at 11:14 PM EST

A common mistake we notice when investors are deciding whether to buy a stock or not is that they simply look at the latest earnings results. Business quality and valuation matter more, so we urge you to understand these dynamics as well.

Evercore is truly a cream-of-the-crop financials company. For starters, its revenue growth was solid over the last five years and is expected to accelerate over the next 12 months. On top of that, its stellar ROE suggests it has been a well-run company historically, and its TBVPS growth was impressive over the last five years.

Evercore’s P/E ratio based on the next 12 months is 20x. Analyzing the financials landscape today, Evercore’s positive attributes shine bright. We think it’s one of the best businesses in our coverage and like the stock at this price.

Wall Street analysts have a consensus one-year price target of $347.88 on the company (compared to the current share price of $328.30), implying they see 6% upside in buying Evercore in the short term.