Lazard, Inc. (LAZ): what the price requires

At today's price, Lazard, Inc. (LAZ) is priced for +11.1% earnings growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-14 · Exported: 2026-07-17 · Source: https://boothcheck.com/report/LAZ

Headline

FieldValue
TickerLAZ
CompanyLazard, Inc.
Current price$41.02/sh
CompositionFinancial Advisory 59% / Asset Management - Management fees and other 39% / Asset Management - Incentive fees 2%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basisfee-financial
Implied earnings growth11.1%
Price-to-earnings16.8x
Earnings yield6.0%

Solve inputs: computed at a 12.3% cost of equity with 4% terminal growth over a 5-year stage, on a 5-year median GAAP earnings base; each 1pp of cost of equity moves the implied earnings growth ~3.2pp.

Reconcile: at the x-ray's 9.3% required return this reads ~0.3%/yr; the models below use their own rates.

How unusual the bet is: within-range

ReferenceValue
vs own history+0.08σ
cohort percentile (of 49 peers)31
sustained it ~5 years at this level50%
implied end-window share0%

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.46x5expensive
Earnings1.51x5expensive
Relative0.82x2justifies
Growth0.87x4justifies

Families that justify the price: Relative, Growth Families that call it expensive: Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.0%); the inversion above states its own rate.

Per-Model Detail (n=16)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$192.020.21xyesFCF base $0.5B, growth 10% (input: historical growth), terminal g 4.0%, WACC 7.0%, 6yr projection
DCF Exit MultipleGrowth$69.440.59xyesExit EV/EBITDA: 11.6x / 13.6x / 15.6x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative$34.081.20xyesP/E 12x (static sector reference · 2026-04), scenarios: 9.9x / 12.0x / 14.1x (bear / base = reference held flat / bull), EV/EBITDA N/Ax
Simple DDMGrowth——no—
Two-Stage DDMGrowth$23.181.77xyesStage 1: -3% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$28.081.46xyesBV/sh $8.34, ROE (TTM) 31.2%, ke 9.3%
Two-Stage Excess ReturnAsset$53.580.77xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$35.631.15xyesRev $3.3B, growth 10% (input: historical growth; tapered), Terminal P/S: 1.1x / 1.3x / 1.6x (bear / base = today's held flat / bull, cap 8x)
Growth-Adjusted P/ERelative——no—
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$37.861.08xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.42B × (1−21%) / WACC 7.0% → EPV (no growth)
Residual IncomeAsset$43.060.95xyesBV $8.34 + 5yr PV of (ROE (TTM) 31.2% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$21.741.89xyes√(22.5 × EPS $2.52 × BVPS $8.34) — Graham's conservative floor
EV/EBITDA RelativeRelative——no—
FCF YieldEarnings$44.090.93xyesFCF $497.3M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$4.978.25xyesSBC-adj FCF $0.11B (FCF $0.50B − SBC $0.39B) capitalized at Kₑ
Ben Graham FormulaEarnings$3.1712.94xyesEPS $2.52 × (8.5 + 2×-3.5%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$5.437.55xyesBV $8.34 × (ROIC 4.5% / WACC 7.0%)
P/Sales SectorRelative$92.610.44xyesRevenue $3.30B × sector P/S 3.0x
PEG Fair ValueRelative——no—
Earnings YieldEarnings$27.241.51xyesEPS $2.52 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$668.1m
Net debt / NOPAT (after-tax)2.55x
Net debt / operating income (pre-tax)2.01x
Interest coverage3.8x
Share count CAGR (buyback)-0.3%
Burning cashno

Bullet Takeaways

Bull Case

A fee business like Lazard is awkward to value, and the awkwardness cuts in its favor. The firm holds almost no capital against its earnings; the value is the stream of advisory and management fees, not the book the firm sits on. Lazard earns a return on equity above 30% precisely because the equity base is so small, and standard book-value methods, which want to anchor on that thin base, badly understate what a capital-light franchise is worth. Read it the way the business actually works, off the fees, and the picture is of two durable revenue engines rather than an over-leveraged balance sheet.

The asset-management side is the steadier of the two and it is gaining ground. Assets under management reached about $259 billion, up 14% year over year, carried there by $9 billion of net inflows in a single quarter, the firm's strongest quarterly inflow figure in close to twenty years. Management fees, which recur as long as the assets stay, rose to $296 million, 25% above the prior-year quarter. That is the part of the business that smooths the advisory cycle, and it is growing, not shrinking.

The advisory franchise is the cyclical engine, and its value is the brand and the bankers more than any asset. Lazard is candid that "a substantial portion of our revenue is derived from Financial Advisory fees", fees that arrive when deals close. In a busy M&A year that operating leverage is enormous, because the cost base is people and the incremental fee drops through. The firm has kept returning that cash to owners, sending $174 million back to shareholders in the quarter and holding the share count roughly flat. Pair a recovering deal cycle with record asset-management inflows and the bull case does not need new businesses; it needs the two it already has to fire at the same time.

Bear Case

The advantage Lazard sells is its people, and people walk. Independent advisory is built on senior banker relationships, and the firm acknowledges the risk plainly: anything that costs it its "people or maintain AUM, any of which would adversely affect our results of operations and financial condition" goes straight to the franchise. A boutique advisor competes against the bulge-bracket banks and a widening field of independents for the same managing directors and the same mandates, and the moat is only as deep as the next compensation cycle and the next star hire. That advantage erodes quietly, one departure at a time, and it does not show up on a balance sheet.

The revenue mix makes the erosion expensive. Lazard states that advisory fees "are not long-term contracted sources of revenue and are subj"ect to the deal cycle, which means the high-margin half of the business is also the half with no recurring base. When deals slip, as several large transactions did in the most recent quarter, advisory revenue falls 4% with little to cushion it. The asset-management side recurs, but its fee rate competes against the relentless pressure on active managers from lower-cost index and passive products, the same squeeze every traditional manager faces.

On the numbers, the price assumes Lazard grows its fee earnings around 13% a year off an already-elevated return on equity. The methods split on whether that holds: the relative-multiple and forward-growth reads land near today's price, but the asset-based and zero-growth earnings-power reads sit below it, which is the market saying the growth is not guaranteed. If a deal year disappoints or net flows reverse, earnings compress toward those lower reads. The balance sheet is the other watch item: net debt sits at roughly 1.8 times operating income with interest covered about four times, comfortable but not the fortress a casual reader of a capital-light advisor might assume.

Valuation

The right way to read Lazard is off its earnings, not its book, because a capital-light fee firm is worth the fees it produces. At today's price the market pays about 18 times earnings, a roughly 5.5% earnings yield, which implies fee earnings compounding around 13% a year. Against a firm earning a return on equity above 30%, that is a demanding but not outlandish assumption; the question is whether both fee engines keep delivering, because the advisory half does not recur.

The methods split cleanly along that fault line. The relative-multiple lens, at a sector price-to-earnings near the mid-teens, lands close to today's price, and the forward-growth methods reach it as well when they credit continued fee growth. The methods that call it expensive are the ones that ignore growth: the zero-growth earnings-power read and the thin-book asset methods both sit below the price. For a capital-light advisor, the asset methods are structurally the wrong frame, and the gap between them and the price is not a warning so much as a reminder that book value is not where this firm's value lives. The earnings-power read is the one to respect, because it says: strip out growth and the price needs the fee streams to keep compounding to be defended.

Solvency is sound without being a fortress. Lazard carries about $668 million of net debt against $363 million of trailing operating income, leverage near 1.8 times, with operating profit covering interest roughly four times. That is manageable for a business whose costs are mostly variable compensation that flexes with revenue, but it is not the debt-free profile of a pure asset-light shop, and in a deep advisory downturn the fixed claims do not flex. The cleaner anchors are the recurring management fees on a growing $259 billion asset base and the firm's habit of returning cash, both of which bound the downside better than the balance sheet does.

Catalysts

The first quarter of 2026 showed both engines, pulling in opposite directions. Net revenue rose 17% to $757 million with GAAP earnings per share of $0.91, but the strength was in asset management, not advisory. Asset-management revenue rose 17% on management fees of $296 million, up 25% year over year, while assets under management reached $259 billion on $9 billion of net inflows, the firm's largest quarterly inflow in nearly twenty years.

Advisory was the soft spot, with revenue down 4% as several large transactions shifted to later in 2026 rather than disappearing. That timing, if the deals close as expected, sets up an easier comparison and a back-half advisory recovery, which is the swing factor for the year. Lazard also announced a definitive agreement to acquire Campbell Lutyens, a private-capital advisory specialist, expected to close in the second half of 2026, extending the advisory franchise into private fundraising.

The two things to watch next are whether the slipped advisory mandates close on schedule and whether asset-management net flows hold near their recent record pace. The firm returned $174 million to shareholders in the quarter, so the capital-return cadence is the third, quieter signal that the fee machine is throwing off enough cash to keep funding it.

Peer Cohorts (Per Segment, With Filing Citations)

Financial Advisory (reported)

Asset Management (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Lazard Q1 2026 earnings release, May 2026 · Lazard 8-K, 2026

View the full interactive LAZ report on boothcheck