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Blue Owl Capital (OWL)
NYSE:OWL
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Blue Owl Capital
(NYSE:OWL)
71Outperform
Positive Factors
Earnings Growth
Management emphasized that growth will be well in excess of 20%, and it is very comfortable it can exceed these expectations.
Growth Opportunities
OWL's exposure to this attractive part of the market will serve as a meaningful driver of growth, enhancing the firm’s footprint in existing fundraising channels, and potentially expanding growth opportunities in Wealth, Insurance and outside the US.
Valuation
Analyst maintains Buy rating on OWL due to bullish views on long-term EPS growth trajectory and potential for valuation expansion.
Negative Factors
Mergers and Acquisitions
Potential headwind for OWL includes mergers and acquisitions which may bring lower margins in acquired companies.
Real Estate Performance
Despite slower industrywide M&A activity, credit deployment was healthy, but Real Estate performance was more muted, totaling ~0%.
Blue Owl Capital (OWL) vs. S&P 500 (SPY)
Market Cap
$26.23B
Dividend Yield3.88%
Average Volume (3M)10.02M
Price to Earnings (P/E)86.7
Beta (1Y)1.80
Revenue Growth32.56%
EPS Growth72.39%
CountryUS
Employees1,100
SectorFinancial
Sector Strength88
IndustryAsset Management
Share Statistics
EPS (TTM)0.21
Shares Outstanding625,652,400
10 Day Avg. Volume13,548,225
30 Day Avg. Volume10,018,429
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)13.83
Price to Cash Flow (P/CF)24.50
P/FCF Ratio25.60
Enterprise Value/Market Cap1.59
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit41.00
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$23.69Price Target Upside32.27% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
Blue Owl Capital Business Overview & Revenue Model
Company DescriptionBlue Owl Capital Inc. operates as an asset manager. It offers permanent capital base solutions that enables it to offer a holistic platform to middle market companies, large alternative asset managers, and corporate real estate owners and tenants. The company provides direct lending products that offer private credit products comprising diversified, technology, first lien, and opportunistic lending to middle-market companies; GP capital solutions products, which offers capital solutions, including GP minority equity investments, GP debt financing, and professional sports minority investments to large private capital managers; and real estate products that focuses on structuring sale-leaseback transactions, which includes triple net leases. It offers its solutions through permanent capital vehicles, as well as long-dated private funds. The company is headquartered in New York, New York.
How the Company Makes MoneyBlue Owl Capital makes money primarily through management fees and performance-based incentives. In their Direct Lending segment, the company earns revenue by providing loans to middle-market companies and collecting interest payments and fees on these loans. The GP Capital Solutions segment generates income by offering capital solutions to private equity firms, earning fees for the management of capital commitments and potential carried interest based on the performance of these investments. In the Real Estate segment, Blue Owl earns revenue from managing real estate assets and receiving fees associated with these assets. The company's earnings are also enhanced by their strategic partnerships and investor relationships, which contribute to fundraising and asset management growth.
Blue Owl Capital Financial Statement Overview
Summary
Blue Owl Capital shows a strong financial performance with significant revenue growth and profitability, supported by effective cash flow management. Despite a stable balance sheet, potential leverage risks remain due to substantial liabilities.Income Statement
Blue Owl Capital's income statement shows a strong upward trajectory in revenue and net income over recent years, with a significant revenue growth rate of 32.6% last year. The gross profit margin has improved to 44.4%, and the net profit margin rose to 18.3%, indicating operational efficiency. However, the EBIT margin decreased slightly, suggesting room for improvement in operating efficiency.85
Very Positive
Balance Sheet
The balance sheet reflects a stable financial position with a moderate debt-to-equity ratio of 0.18 and an equity ratio of 19.4%. The company's return on equity (ROE) is robust at 19.8%, demonstrating effective use of shareholder equity to generate profits. Nonetheless, the substantial liabilities to assets ratio highlights potential leverage risks.70
Positive
Cash Flow
Blue Owl Capital showcases strong cash flow generation with a 6.1% growth in free cash flow and a healthy operating cash flow to net income ratio of 2.38. The solid free cash flow to net income ratio of 2.22 underscores the company's ability to convert profits into cash, which is crucial for sustaining operations and funding growth.88
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.30B | 1.73B | 1.37B | 823.88M | 249.81M | Gross Profit |
| 1.02B | 860.97M | 475.04M | -673.11M | 9.08M | EBIT |
| 606.76M | 317.82M | -2.48M | -927.27M | -58.73M | EBITDA |
| 866.04M | 632.65M | 269.67M | -1.73B | -58.05M | Net Income Common Stockholders |
| 109.58M | 54.34M | -9.29M | -376.17M | -77.83M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 152.09M | 104.16M | 68.08M | 42.57M | 11.63M | Total Assets |
| 10.99B | 8.82B | 8.89B | 8.27B | 121.60M | Total Debt |
| 390.35M | 2.00B | 1.86B | 1.26B | 356.39M | Net Debt |
| 238.26M | 1.90B | 1.80B | 1.22B | 344.76M | Total Liabilities |
| 5.19B | 3.54B | 3.34B | 2.42B | 622.76M | Stockholders Equity |
| 2.13B | 1.53B | 1.60B | 1.66B | -507.69M |
| Cash Flow | Free Cash Flow | |||
| 935.37M | 881.24M | 662.91M | 276.40M | 4.58M | Operating Cash Flow |
| 999.55M | 949.14M | 728.45M | 281.66M | 5.23M | Investing Cash Flow |
| -638.14M | -118.03M | -485.22M | -1.60B | -652.00K | Financing Cash Flow |
| -313.48M | -795.03M | -217.72M | 1.35B | -295.00K |
Blue Owl Capital Technical Analysis
Negative
17.91
Price Trends
19.30
Negative
21.60
Negative
20.66
Negative
Market Momentum
-0.32
Negative
46.37
Neutral
77.78
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OWL, the sentiment is Negative. The current price of 17.91 is above the 20-day moving average (MA) of 17.49, below the 50-day MA of 19.30, and below the 200-day MA of 20.66, indicating a neutral trend. The MACD of -0.32 indicates Negative momentum. The RSI at 46.37 is Neutral, neither overbought nor oversold. The STOCH value of 77.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OWL.
Blue Owl Capital Risk Analysis
Blue Owl Capital disclosed 74 risk factors in its most recent earnings report. Blue Owl Capital reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Blue Owl Capital Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $141.73B | 22.21 | 14.67% | 2.23% | 11.48% | 4.77% | |
71 Outperform | $26.23B | 86.70 | 5.99% | 3.88% | 32.56% | 72.39% | |
70 Outperform | $14.13B | 14.12 | 18.90% | 3.62% | 62.87% | ― | |
70 Outperform | $49.73B | 73.52 | 15.93% | 2.56% | 6.12% | -15.84% | |
67 Neutral | $154.99B | 35.12 | 34.07% | 3.00% | 24.92% | 16.65% | |
63 Neutral | $12.46B | 9.56 | 8.14% | 17044.64% | 12.63% | -4.25% | |
63 Neutral | $16.47B | ― | 0.05% | 3.75% | 46.69% | -98.56% |
* Financial Sector Average
Performance Comparison
OWL
Blue Owl Capital
17.91
0.43
2.46%
BLK
BlackRock
916.14
176.25
23.82%
BX
Blackstone Group
133.39
17.51
15.11%
CG
Carlyle Group
39.16
-0.21
-0.53%
ARES
Ares Management
152.27
21.11
16.09%
TPG
TPG
46.67
4.45
10.54%
Blue Owl Capital Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: -3.35%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Blue Owl Capital's record fundraising, robust FRE and DE growth, successful mergers, and a diversified investor base, which paints a positive picture of the company's performance and resilience. However, challenges in the syndicated market and transaction fee volatility, along with global expansion risks, present areas to monitor. Overall, the highlights significantly outweigh the lowlights, suggesting a strong performance and strategic positioning.Q1-2025 Updates
Positive Updates
Record Fundraising and Capital Deployment
Blue Owl Capital reported a record equity raise of $27.5 billion in 2024, which is about 75% higher than 2023. Including debt, they raised over $47 billion, also a record for the company.
Strong Fee Related Earnings (FRE) and Distributable Earnings (DE) Growth
The company reported a 26% FRE growth for the year, with management fees growing at over a 35% annual growth rate since listing as a public company.
Successful Mergers and New Product Launches
The merger of OTF and OTF2 was completed, making OTF the largest technology-focused BDC in the public market. Additionally, a new alternative credit product focused on the wealth market is expected to close its private phase fundraise in the summer.
Diversified and Global Investor Base
Over the past 12 months, Blue Owl Capital raised nearly $30 billion of equity, an increase of over 75% from the prior year, with a significant portion coming from new investors and international markets.
Prominent Performance in Real Assets
The Digital Infrastructure Fund 3 reached its hard cap of $7 billion, nearly double the size of the prior fund, demonstrating strong demand in the real assets segment.
Negative Updates
Challenges in the Syndicated Market
The syndicated market essentially shut down, affecting the balance between market share gains in private credit and the impact of lower M&A activity on capital deployment.
Higher Transaction Fee Volatility
Transaction fees were lower this quarter compared to the last, reflecting the least predictable part of the business, although it remains a small component of overall earnings.
Potential Risks in Global Expansion
While Blue Owl has a strong U.S. focus, there are challenges in global expansion, particularly in markets with heightened geopolitical tensions, such as Asia.
Company Guidance
During Blue Owl Capital's Q1 2025 earnings call, significant guidance was provided, highlighting several key metrics and strategic directions for the company. Blue Owl reported fee-related earnings (FRE) of $0.23 per share and distributable earnings (DE) of $0.21 per share for Q4 2024, with full-year 2024 FRE and DE at $0.86 and $0.77 per share, respectively. The company declared an annual fixed dividend of $0.9 for 2025, marking a 25% increase from the prior year. Blue Owl achieved a record equity raise of $27.5 billion in 2024, up 75% from 2023, and deployed $52 billion in credit, driving a 26% FRE growth. Management fees grew at an annual rate of over 35% since going public, supported by a robust business model where approximately 90% of management fees are derived from permanent capital. Looking forward, Blue Owl anticipates continued fee growth from over $23 billion in assets under management (AUM) set to begin generating management fees, driving an incremental $290 million in revenue. Additionally, the successful merger of OTF and OTF2 is expected to contribute approximately $135 million in annual management fees. The company also highlighted a strong performance in direct lending with a gross origination of $13 billion, and an impressive 13 basis point average annual realized loss rate, showcasing its rigorous underwriting standards.Blue Owl Capital Corporate Events
Executive/Board Changes
Blue Owl Capital Appoints Jennifer Brouse to Board
Neutral
Mar 28, 2025
On March 26, 2025, Blue Owl Capital Inc. appointed Jennifer Brouse to its Board of Directors, filling the vacancy left by Sean Ward’s resignation. Brouse, who is already a Managing Director and Chief Operating Officer at Blue Owl, will not receive additional compensation for her new role. This appointment was made under the terms of the Investor Rights Agreement, highlighting the company’s ongoing strategic alignment with its equity holders.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.