StepStone Group (STEP) AI Stock Analysis

• Market Cap: $8.16B
• Dividend Yield: 2.17%
• Average Volume (3M): 605.22K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.40
• Revenue Growth: 92.02%
• EPS Growth: -1386.34%
• Country: US
• Employees: 1,090
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 0.54
• Shares Outstanding: 79,124,245
• 10 Day Avg. Volume: 430,276
• 30 Day Avg. Volume: 605,219
• PEG Ratio: 0.06
• Price to Book (P/B): 20.72
• Price to Sales (P/S): 3.16
• P/FCF Ratio: 62.11
• Enterprise Value/Market Cap: 0.81
• Enterprise Value/Revenue: 4.31
• Enterprise Value/Gross Profit: 66.11
• Enterprise Value/Ebitda: -6.59
• 1Y Price Target: $77.33
• Price Target Upside: 8.82% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 45 Neutral
• Price Target: $59.00 ▼(-16.97% Downside)

StepStone Group's overall stock score is primarily impacted by its weak financial performance, characterized by negative profitability and high leverage. While there are positive developments in terms of earnings call highlights and strategic growth initiatives, these are overshadowed by the company's current financial difficulties and unattractive valuation metrics.

Positive Factors

Revenue Growth

The significant increase in revenue demonstrates strong market demand and effective business strategies, indicating potential for sustained growth.

Strategic Partnerships

Expanding international presence and partnerships enhance market reach and client base, supporting long-term growth and competitive positioning.

New Product Launch

The new indices address market demand for better benchmarks, potentially attracting more clients and enhancing StepStone's market leadership.

Negative Factors

High Leverage

Significant leverage increases financial risk and limits flexibility, potentially impacting the company's ability to invest in growth opportunities.

Negative Profitability

Ongoing operational challenges and cost pressures lead to negative profitability, which can hinder reinvestment and long-term financial health.

Cash Flow Decline

Decreasing cash flow growth limits the company's ability to fund operations and strategic initiatives, posing a risk to future expansion plans.

StepStone Group Business Overview & Revenue Model

Company Description

StepStone 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 Money

StepStone Group generates revenue primarily through management fees, performance fees, and advisory fees. Management fees are charged on the assets under management (AUM) and are typically calculated as a percentage of the committed capital or invested capital in the funds they manage. Performance fees, also known as carried interest, are earned when the investments exceed a predetermined threshold return, aligning the firm's interests with those of its investors. Additionally, StepStone provides advisory services to clients looking to navigate private market investments, charging fees for these consulting services. The firm's strategic partnerships with various investment funds and its extensive network within the private equity and alternative investment markets further enhance its ability to source lucrative investment opportunities, contributing to its overall earnings.

StepStone Group Financial Statement Overview

Summary

StepStone Group's financial performance is challenged by negative profitability metrics and high leverage, despite strong revenue growth. The income statement shows significant revenue growth, but negative net profit and EBIT margins indicate operational difficulties. The balance sheet reveals high debt levels, increasing financial risk. Cash flow management shows resilience, but overall financial health is concerning.

Income Statement

StepStone Group's income statement shows a mixed performance. The company experienced a significant revenue growth rate of 15.31% in the TTM period, indicating strong top-line growth. However, profitability metrics are concerning, with negative net profit and EBIT margins, suggesting operational challenges. The gross profit margin has also declined compared to previous periods, reflecting increased cost pressures.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 2.48 in the TTM period, indicating significant leverage and potential financial risk. Return on equity is negative, reflecting recent losses. The equity ratio has decreased, suggesting a weaker capital structure. These factors highlight potential financial instability and increased risk exposure.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth, with a negative growth rate of -7.37% in the TTM period. The operating cash flow to net income ratio is low, indicating limited cash generation relative to net income. However, the free cash flow to net income ratio remains relatively strong, suggesting some resilience in cash flow management despite profitability challenges.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.54B	1.17B	711.63M	-67.57M	1.37B	787.72M
Gross Profit	100.15M	-89.47M	381.44M	171.60M	576.83M	384.55M
EBITDA	-1.00B	-205.23M	252.31M	10.18M	540.67M	350.70M
Net Income	-615.09M	-179.56M	58.09M	-18.40M	193.88M	62.63M
Balance Sheet
Total Assets	5.33B	4.59B	3.79B	3.50B	4.19B	1.32B
Cash, Cash Equivalents and Short-Term Investments	366.18M	289.30M	181.59M	128.56M	116.39M	179.89M
Total Debt	379.38M	382.79M	268.56M	219.57M	133.84M	0.00
Total Liabilities	4.11B	2.81B	1.92B	1.84B	2.36B	661.08M
Stockholders Equity	-233.46M	179.36M	324.48M	771.57M	817.63M	249.41M
Cash Flow
Free Cash Flow	18.93M	59.83M	141.91M	145.56M	212.18M	148.04M
Operating Cash Flow	23.59M	64.93M	161.52M	151.18M	214.28M	149.30M
Investing Cash Flow	-30.96M	-43.48M	-47.35M	-30.81M	-210.24M	-11.17M
Financing Cash Flow	154.52M	87.48M	-57.98M	-108.02M	-70.44M	-45.31M

StepStone Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 71.06
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 71.06 is above the 20-day moving average (MA) of 65.86, above the 50-day MA of 63.40, and above the 200-day MA of 58.91, indicating a bullish trend. The MACD of 1.72 indicates Negative momentum. The RSI at 67.50 is Neutral, neither overbought nor oversold. The STOCH value of 89.70 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STEP.

StepStone Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JHG	78 Outperform	$7.17B	14.10	11.10%	3.34%	14.48%	34.97%
HLNE	77 Outperform	$8.09B	26.57	31.85%	1.52%	13.01%	21.96%
IVZ	77 Outperform	$12.32B	19.19	7.29%	3.08%	6.64%	―
AMG	74 Outperform	$8.66B	18.76	15.95%	0.01%	1.08%	8.24%
AB	73 Outperform	$3.55B	12.65	19.77%	8.93%	―	-12.92%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
STEP	45 Neutral	$8.16B	-8.88	-750.11%	2.17%	92.02%	-1386.34%