LAZ

Lazard is a high-quality franchise trading at an unremarkable price. The FY2025 numbers show a firm that is stabilizing on the top line (+1.5% to $3.19B) but still bleeding profitability — net income fell another 15.4% to $237M and diluted EPS dropped 19% to $2.17, the second straight year of declining earnings since the -$75.5M loss in FY2023. That puts the stock at 18.7x trailing earnings and 1.4x sales, which is fair rather than cheap for a business whose own MD&A admits revenues are 'primarily dependent on the successful completion of merger, acquisition, sale, restructuring, capital raising or similar transactions' — i.e., not contracted and not recurring.

What keeps this from being a sell is balance-sheet quality and capital return. Cash of $1.47B (up 12.3% YoY) covers most of the $1.69B long-term debt, equity grew 37% to $874M, and ROE of 27.1% is genuinely strong for a capital-light advisor. Management is returning capital aggressively — $187M dividends + $91M buybacks against $237M of net income — implying a combined shareholder yield north of 6% on the $4.52B market cap. Operating cash flow of $519M dwarfs $32M of capex, so the dividend looks safe even with earnings down.