Earnings to watch: Evercore (EVR) reports Q3 results tomorrow

What happened

Evercore, an investment banking firm, will report third-quarter results Wednesday morning. Last quarter it beat revenue expectations with $999.5 million, up 19.2% year on year, but significantly missed EBITDA estimates. This quarter, the market expects revenue to fall 14.8% year on year.

Confirmed

Global impact / market context

Evercore's revenue is expected to drop 14.8% this quarter, which means its main business of advising on deals and raising money may be slowing. A decline would reverse last year's strong growth and could pressure profit, since Evercore earns fees from completed transactions.

Analyst inference

Peers Goldman Sachs and Jefferies reported revenue growth and beat estimates. Evercore's own record of exceeding expectations raises the bar for this report, since investors may already expect another beat and could punish any shortfall.

Analyst inference

What to watch

1. Evercore reports Wednesday morning. Last quarter revenue was $999.5 million, up 19.2% year on year, while EBITDA missed estimates significantly. Watch whether revenue meets the expected 14.8% year-on-year decline. Confirmed
2. Watch whether Evercore beats the expected 14.8% revenue decline, given its history of exceeding Wall Street expectations. A beat could ease concerns about slowing deal activity, while a miss could reinforce them. Proposed
3. Watch Evercore's profit per sale, which means how much it keeps after costs. Last quarter's EBITDA miss despite strong revenue suggests costs may be rising faster than sales, squeezing profit even if revenue holds up. Analyst inference

Evidence

• stockstory.org