How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Evercore (EVR) ten years ago? It may not have been easy to hold on to EVR for all that time, but if you did, how much would your investment be worth today?
Evercore's Business In-Depth
With that in mind, let's take a look at Evercore's main business drivers.
Headquartered in New York, Evercore Inc. is a premier global independent investment banking advisory firm. Founded in 1995, the company operates from its offices and affiliates in North America, Europe, the Middle East and Asia.
It operates through following two segments:
The Investment Banking segment (98% of net revenues in 2020) includes the advisory business through which Evercore provides advice to clients on M&As, divestitures, restructuring, capital markets and institutional equities services. The company also provides restructuring advice to companies in financial transition, as well as to creditors, shareholders and potential acquirers. In addition, the company provides its clients with capital markets advice, underwrites securities offerings, raises funds for financial sponsors and provides advisory services focused on secondary transactions for private funds interests, as well as on primary and secondary transactions for real estate oriented financial sponsors and private equity interests. The Investment Banking business also includes the Evercore ISI business through which the company offers macroeconomic, policy and fundamental equity research and agency-based equity securities trading for institutional investors.
The Investment Management segment (2%) includes wealth management business through which the company provides investment advisory, wealth management and fiduciary services for high net-worth individuals and associated entities. It also consists of institutional asset management business under which it manages financial assets for sophisticated institutional investors.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Evercore ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in March 2011 would be worth $4,559.21, or a gain of 355.92%, as of March 19, 2021, and this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 206.09% and the price of gold went up 17.48% over the same time frame.
Going forward, analysts are expecting more upside for EVR.
Shares of Evercore have outperformed the industry over the past three months. Also, the company has an impressive earnings surprise history, having beaten the Zacks Consensus Estimate in each of the trailing four quarters. Evercore benefits from continued rise in investment banking revenues owing to initiatives to fortify the segment. This momentum is likely to continue, as the markets remain volatile. Further, the company's steady capital deployment activities are impressive as it continues to enhance shareholders' value. However, escalating expenses on rising compensation costs and falling volatile institutional assets under management (AUM) trend strain the company's fees. Nevertheless, strong capital position keeps Evercore well poised to undertake opportunistic expansion and acquisitions. Also, lower debt level is a tailwind.
Over the past four weeks, shares have rallied 18.68%, and there have been 3 higher earnings estimate revisions in the past two months for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.
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