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StepStone Group (STEP)
NASDAQ:STEP
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StepStone Group
(NASDAQ:STEP)
Rating:63Neutral
Price Target:―
Positive Factors
Earnings
The earnings per share (EPS) for the first quarter of 2025 has been raised.
Price Target
The price target has been increased by 2%.
Negative Factors
Analyst Recommendation
The analyst's recommendation remains Equal-weight with a modest upside.
StepStone Group (STEP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.89B
Dividend Yield1.59%
Average Volume (3M)635.80K
Price to Earnings (P/E)103.1
Beta (1Y)1.35
Revenue Growth118.79%
EPS Growth-285.61%
CountryUS
Employees1,090
SectorFinancial
Sector Strength82
IndustryAsset Management
Share Statistics
EPS (TTM)0.44
Shares Outstanding75,849,730
10 Day Avg. Volume414,447
30 Day Avg. Volume635,803
Financial Highlights & Ratios
PEG Ratio0.12
Price to Book (P/B)19.24
Price to Sales (P/S)0.00
P/FCF Ratio46.81
Enterprise Value/Market Cap0.92
Enterprise Value/Revenue1.88
Enterprise Value/Gross Profit11.89
Enterprise Value/Ebitda10.27
Forecast
1Y Price Target
$59.75Price Target Upside2.26% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
StepStone Group Business Overview & Revenue Model
Company DescriptionStepStone Group Inc. is an investment firm specializing in direct, fund of funds, secondary direct, and secondary indirect investments. For direct investment, it seeks to invest in venture debt, incubation, mezzanine, distressed/vulture, seed/startup, early venture, mid venture, late venture, emerging growth, later stage, turnaround, growth capital, industry consolidation, recapitalization, and buyout investments in mature and middle market companies. It prefers to invest in natural resources, technology, healthcare, services, materials, manufacturing, consumer durables, apparel, hotels, restaurants and leisure, media, retailing, consumer staples, financials, telecommunication services, energy, infrastructure, real estate, and real asset. The firm invests globally with a focus on United States, North America, Europe, Asia, Latin America, Middle East, Africa, Brazil, Mexico, Argentina, Colombia, New Zealand, China, India, Korea, Japan, Taiwan, and Australia region. It typically invests between $15 million and $200 million in firms with enterprise value between $150 million and $25000 million. The firm invests between 5% and 40% in emerging markets. For fund of fund investment, it seeks to invest in private equity funds, venture capital funds, Special situation funds, Real estate funds, Infrastructure funds, mezzanine funds, and turnaround/distressed funds. It considers investments in both domestic and international funds. It also seeks to make co-investments and follow-on investments and considers partial interests in funds. StepStone Group Inc. was founded in 2007 and is based in New York, New York with additional offices across North America, South America, Europe, Australia, and Asia.
How the Company Makes MoneyStepStone Group makes money primarily through management and advisory fees charged on the assets it manages or advises on behalf of its clients. These fees are typically a percentage of the assets under management (AUM) and can include performance-based fees when investment returns exceed predefined benchmarks. The company also earns revenue from consulting services and customized investment solutions provided to its clients. Key partnerships with institutional investors and financial institutions help expand its client base and increase AUM, further driving revenue growth.
StepStone Group Financial Statement Overview
Summary
StepStone Group shows strong operational efficiency with high gross margins and positive cash flow performance. However, profitability challenges are evident with recent losses and inconsistent revenue growth. The balance sheet is sturdy due to zero debt, but low equity levels may risk long-term growth sustainability.Income Statement
The company's recent TTM (Trailing-Twelve-Months) report shows a significant drop in net income, resulting in a negative net profit margin. However, the gross profit margin is strong at 83.27%, indicating efficient cost management. Revenue growth has been inconsistent, with a decline in the most recent TTM data compared to previous years.45
Neutral
Balance Sheet
The balance sheet indicates a strong equity position with no debt in the latest TTM period, resulting in a debt-to-equity ratio of zero. However, the return on equity is negative due to the net loss, and the equity ratio stands at 4.82%, which is relatively low, indicating limited financial buffer.60
Neutral
Cash Flow
The company maintains a positive free cash flow with a healthy operating cash flow to net income ratio, despite the negative net income. The free cash flow to net income ratio is robust, suggesting effective cash management even during periods of financial stress.70
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.15B | 711.63M | -67.57M | 1.37B | 787.72M | 446.61M | Gross Profit |
| 534.72M | 339.09M | -281.81M | 576.83M | 384.55M | 206.22M | EBIT |
| -142.65M | 190.87M | -47.44M | 454.95M | 328.80M | 152.03M | EBITDA |
| -75.64M | 249.86M | 4.00K | 481.93M | 334.30M | 159.10M | Net Income Common Stockholders |
| -94.73M | 58.09M | -45.27M | 484.28M | 314.59M | 131.92M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 278.78M | 181.59M | 128.56M | 116.39M | 179.89M | 89.94M | Total Assets |
| 4.35B | 3.79B | 3.50B | 4.19B | 1.32B | 680.83M | Total Debt |
| 281.12M | 268.56M | 219.57M | 133.84M | 14.49M | 143.14M | Net Debt |
| 2.33M | 86.97M | 91.01M | 17.46M | -165.40M | 53.20M | Total Liabilities |
| 2.61B | 1.92B | 1.87B | 2.36B | 661.08M | 443.86M | Stockholders Equity |
| 209.84M | 324.48M | 771.57M | 817.63M | 249.41M | 178.00K |
| Cash Flow | Free Cash Flow | ||||
| 135.73M | 141.91M | 145.56M | 212.18M | 148.04M | 65.09M | Operating Cash Flow |
| 139.08M | 161.52M | 151.18M | 214.28M | 149.30M | 65.93M | Investing Cash Flow |
| -45.75M | -47.35M | -30.81M | -210.24M | -11.17M | 35.81M | Financing Cash Flow |
| 11.84M | -57.98M | -108.02M | -70.44M | -45.31M | -52.17M |
StepStone Group Technical Analysis
Positive
58.43
Price Trends
52.24
Positive
56.10
Positive
57.05
Negative
Market Momentum
2.15
Negative
54.86
Neutral
64.13
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STEP, the sentiment is Positive. The current price of 58.43 is above the 20-day moving average (MA) of 54.87, above the 50-day MA of 52.24, and above the 200-day MA of 57.05, indicating a neutral trend. The MACD of 2.15 indicates Negative momentum. The RSI at 54.86 is Neutral, neither overbought nor oversold. The STOCH value of 64.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STEP.
StepStone Group Risk Analysis
StepStone Group disclosed 67 risk factors in its most recent earnings report. StepStone Group 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
StepStone Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $5.99B | 15.11 | 8.55% | 4.10% | 17.41% | -4.75% | |
76 Outperform | $4.52B | 11.02 | 20.69% | 8.03% | ― | 53.17% | |
73 Outperform | $6.86B | 12.28 | 5.50% | 5.41% | 5.69% | ― | |
70 Outperform | $5.18B | 14.31 | 12.81% | 0.02% | -6.37% | -28.43% | |
67 Neutral | $11.67B | 32.17 | 2.84% | 5.68% | 7.02% | -60.38% | |
64 Neutral | $12.78B | 9.87 | 7.67% | 17015.06% | 12.34% | -5.99% | |
63 Neutral | $6.89B | 103.13 | -26.81% | 1.59% | 118.79% | -285.61% |
* Financial Sector Average
Performance Comparison
STEP
StepStone Group
56.24
19.44
52.83%
AMG
Affiliated Managers
176.07
17.76
11.22%
AB
AllianceBernstein
39.98
8.85
28.43%
BEN
Franklin Resources
21.61
-0.74
-3.31%
IVZ
Invesco
14.64
-0.40
-2.66%
JHG
Janus Henderson Group
36.49
3.69
11.25%
StepStone Group Earnings Call Summary
Earnings Call Date:Feb 06, 2025
(Q3-2025)
| % Change Since: -8.27%|
Next Earnings Date:May 22, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant growth in fee-related earnings and assets under management, successful fundraising efforts, and notable achievements in venture capital. However, these were tempered by a GAAP net loss and increased non-controlling interests.Q3-2025 Updates
Positive Updates
Record Fee-Related Earnings and Asset Growth
Fee-related earnings reached $74 million, the highest level ever, and fee-earning assets under management increased by nearly $10 billion, marking the strongest quarter of organic growth in StepStone's history.
Significant Fundraising Achievements
Closed on inaugural infrastructure co-investment fund with a total size of $1.2 billion and grew the private wealth platform to over $6 billion, raising over $1 billion in new subscriptions.
High Fee-Related Earnings Margin
Fee-related earnings margin reached 39% for the quarter, marking the best quarterly and twelve-month core margin levels on record.
Venture Capital Business Success
Venture capital team exceeded revenue targets, doubling venture capital fee-earning AUM since the acquisition of GreenSpring.
Negative Updates
GAAP Net Loss
Recorded a GAAP net loss of $287 million, with the net loss attributable to StepStone Group Incorporated at $190 million or $2.61 per share, impacted by changes in fair value related to potential future buy-in of StepStone Private Wealth profits interests.
Higher Non-Controlling Interests
Notable increase in non-controlling interests due to growth in infrastructure, real estate, and private debt asset classes, and strong growth in private wealth.
Company Guidance
During the fiscal third quarter of 2025, StepStone Group reported a GAAP net loss of $287 million, with a GAAP net loss attributable to the company of $190 million or $2.61 per share. However, the company achieved a record fee-related earnings (FRE) of $74.1 million, marking a 46% increase from the previous year, alongside an FRE margin of 39%. Fee-earning assets under management (AUM) grew by nearly $10 billion, reaching over $114 billion, representing a 28% year-over-year increase. Retroactive fees contributed $9.7 million to revenue, compared to $8.6 million in the same quarter of the last fiscal year. StepStone earned $52.7 million in adjusted net income, or $0.44 per share, up from $42.1 million or $0.37 per share the previous year. The quarter was characterized by significant capital deployment, with over $2 billion of capital deployed and over $6.5 billion activated. The private wealth platform surpassed $6 billion, with over $1 billion in new subscriptions, marking its strongest growth quarter ever.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.