PJT (PJT)

Investment banking firm PJT Partners (NYSE:PJT) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 37% year on year to $447.1 million. Its non-GAAP profit of $1.85 per share was 32.1% above analysts’ consensus estimates.

Company Overview

Spun off from Blackstone in 2015 and founded by former Morgan Stanley executive Paul J. Taubman, PJT Partners (NYSE:PJT) is an advisory-focused investment bank that provides strategic advice, restructuring services, and fundraising solutions to corporations, boards, and investment firms.

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.

PJT Partners competes with independent advisory firms like Evercore (NYSE:EVR), Lazard (NYSE:LAZ), 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).

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. Over the last five years, PJT grew its revenue at a solid 11.1% compounded annual growth rate. Its growth beat the average financials company and shows its offerings resonate with customers, a helpful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. PJT’s annualized revenue growth of 22.4% 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, PJT reported wonderful year-on-year revenue growth of 37%, and its $447.1 million of revenue exceeded Wall Street’s estimates by 15.6%.

Financial firms generate fee-based revenue through activities like M&A advisory, capital raising, and dedicated client servicing programs.

PJT’s fees have grown at an annual rate of 12.8% over the last five years, a step above the broader financials industry and faster than its total revenue. This tells us its advisory and servicing operations helped top-line performance. When analyzing PJT’s fees over the last two years, we can see that growth accelerated to 22.9% annually.

PJT’s fees punched in at $389.8 million this quarter, beating analysts’ expectations by 14.4%. This print was 37.4% higher than the same quarter last year.

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.

The pre-tax profit margin includes interest because it's central to how financial institutions generate revenue and manage costs. Tax considerations are excluded since they represent government policy rather than operational performance, giving investors a clearer view of business fundamentals.

Over the last four years, PJT’s pre-tax profit margin has risen by 4.4 percentage points, going from 23.9% 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 2.7 percentage points on a two-year basis.

PJT’s pre-tax profit margin came in at 20.3% this quarter. This result was 5.2 percentage points better 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.

PJT’s unimpressive 9.2% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

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

PJT’s two-year annual EPS growth of 36.8% was fantastic and topped its 22.4% two-year revenue growth.

We can take a deeper look into PJT’s earnings to better understand the drivers of its performance. PJT’s pre-tax profit margin has expanded over the last two years. 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, PJT reported adjusted EPS of $1.85, up from $0.93 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects PJT’s full-year EPS of $6.34 to grow 10.6%.

The balance sheet drives profitability for financial firms since earnings flow from managing diverse assets and liabilities across multiple business lines. As such, valuations for these companies concentrate on capital strength and sustainable equity accumulation potential across their varied operations.

This is why we consider tangible book value per share (TBVPS) an important metric for the sector. TBVPS represents the real net worth per share across all business segments, providing a clear measure of shareholder equity regardless of the complexity of operations. EPS can become murky due to the complexity of multiple revenue streams, acquisition impacts, or accounting flexibility across different financial services, and book value resists financial engineering manipulation.

PJT’s TBVPS declined at a 188% annual clip over the last five years. However, TBVPS growth has accelerated recently, growing by 116% annually over the last two years from $0.25 to $1.16 per share.

Return on equity, or ROE, quantifies bank profitability relative to shareholder equity - an essential capital source for these institutions. Over extended periods, superior ROE performance drives faster shareholder wealth compounding through reinvestment, share repurchases, and dividend growth.

Over the last five years, PJT has averaged an ROE of 26.9%, 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 PJT has a strong competitive moat.

PJT reported $400.5 million of cash and $422.2 million of debt on its balance sheet in the most recent quarter.

As investors in high-quality companies, we primarily focus on whether a company’s profits can support its debt.

With $336.7 million of EBITDA over the last 12 months, we view PJT’s 0.1× net-debt-to-EBITDA ratio as safe. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

It was good to see PJT beat analysts’ EPS expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The stock traded up 2.6% to $166.84 immediately after reporting.

Updated: December 4, 2025 at 11:19 PM EST

We think that the latest earnings result is only one piece of the bigger puzzle. If you’re deciding whether to own PJT, you should also grasp the company’s longer-term business quality and valuation.

In our opinion, PJT is a solid company. First off, its revenue growth was solid over the last five years, and analysts believe it can continue growing at these levels. And while its TBVPS has declined over the last five years, its stellar ROE suggests it has been a well-run company historically. On top of that, its fee growth was solid over the last five years.

PJT’s P/E ratio based on the next 12 months is 23.2x. This multiple tells us that a lot of good news is priced in. Add this one to your watchlist and come back to it later.

Wall Street analysts have a consensus one-year price target of $175.75 on the company (compared to the current share price of $170.73).