A Look at Lazard’s Valuation Following the Appointment of Tech Executive Dmitry Shevelenko to Its Board

Lazard (NYSE:LAZ) just shook things up by appointing Dmitry Shevelenko, Chief Business Officer of Perplexity, to its Board of Directors. Shevelenko’s background, spanning leadership stints at Uber, LinkedIn, and Meta, points to a boardroom that is getting serious about technology and operational innovation. While executive appointments do not always move the needle overnight, this one hints at intentions beyond tradition, namely, adapting fast to the tech-driven shifts reshaping global finance.

This addition to Lazard’s board comes at a time when the company’s stock has seen a steady climb this year, up 11% on a year-to-date basis and an impressive 25% over the past twelve months. Momentum really picked up in the past 3 months, with shares rising nearly 32%. Meanwhile, annual revenue and net income have both shown healthy growth, which may be encouraging investors to reconsider how Lazard is valued compared to peers.

With new tech expertise now at the table and shares on the move, does Lazard still have room to run, or has the market already accounted for its innovation pivot?

Most Popular Narrative: 3.5% Undervalued

According to the most widely followed narrative, Lazard appears to be trading modestly below its estimated fair value. Analysts believe the company’s recent expansion efforts, improving margins, and robust forecasted growth justify a higher price than the current market level.

“Efforts to broaden financial advisory services with additions in healthcare, financial sponsors, and restructuring suggest increased investment in personnel, which might lead to temporary elevated expenses without corresponding revenue growth. Continued geopolitical advisory expansion and recruitment may increase operating costs faster than revenue from these services materializes, adversely affecting net margins in the short term.”

Curious about the engine behind Lazard’s valuation story? One big bet: the company’s future profit margin and earnings growth are set to sprint ahead of today’s levels, driving up projected value. Want the playbook behind this ‘undervalued’ rating? The real surprise is how ambitious these financial estimates are, as well as the shift required to make them reality.

Result: Fair Value of $58.20 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, continued diversification and expansion in Lazard’s advisory business or asset management flows could help offset short-term cost pressures and support future growth.

Find out about the key risks to this Lazard narrative.

Another View: DCF Model Weighs In

While analyst targets suggest only modest upside, our DCF model offers a second opinion. It points to Lazard being even further below its fair value and challenges whether the market is fully pricing in the future. Which lens tells the truer story?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Lazard for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Lazard Narrative

If you think the numbers tell a different story, or want to dig into the details yourself, you can craft your own Lazard narrative in under three minutes. Do it your way

A great starting point for your Lazard research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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