StepStone Group (STEP) AI Stock Analysis

• Market Cap: $8.66B
• Dividend Yield: 2.17%
• Average Volume (3M): 596.27K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.41
• 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: 544,282
• 30 Day Avg. Volume: 596,270
• 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: 1.05
• Enterprise Value/Revenue: 5.94
• Enterprise Value/Gross Profit: 91.01
• Enterprise Value/Ebitda: -9.07
• 1Y Price Target: $81.14
• Price Target Upside: 10.76% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 45 Neutral
• Price Target: $71.00 ▼(-3.08% 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

Fee-earning AUM Growth

Sustained growth in fee-earning AUM materially increases the recurring management fee base and operating scale. A larger fee-bearing asset base supports more predictable revenue, improves operating leverage over time, and funds product and platform investments that bolster long-term earnings resilience.

Private Wealth & Institutional Fundraising

Robust new subscriptions and managed-account inflows diversify client mix and deepen institutional relationships, creating a larger, stickier fee pool. Durable fundraising momentum supports cross-selling, scale benefits, and steadier fee-related earnings independent of short-term market valuations.

Partnerships and Global Expansion

Strategic partnerships, new indices and international offices broaden distribution and product reach, creating scalable fee streams and stronger sourcing in key markets. These structural moves improve competitiveness, diversify revenue channels, and support sustainable AUM growth over the medium term.

Negative Factors

High Leverage and Negative Equity

Negative equity and elevated leverage materially constrain financial flexibility and increase solvency risk. This capital structure reduces capacity for opportunistic investments, raises refinancing costs, and can limit the firm’s ability to absorb valuation shocks in illiquid private markets over the medium term.

Declining Free Cash Flow Growth

A steep 65.8% drop in free cash flow growth signals weakened cash generation capacity. Persistently lower FCF constrains reinvestment, limits the ability to fund growth initiatives or cover operating volatility, and heightens dependence on external financing or timing-sensitive fee recognition.

Profitability Pressure and GAAP Loss

A substantial GAAP loss and negative margins reflect material profitability pressure from fair-value adjustments and rising expenses. Continued losses erode retained capital, can impair incentive structures and hiring, and may weaken long-term ability to reinvest in products and client servicing.

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 is facing significant financial challenges, with negative net profit margins and a concerning balance sheet characterized by high leverage and negative stockholders' equity. The cash flow situation is also weak, with a significant decline in free cash flow growth, indicating difficulties in cash generation and cost management.

Income Statement

StepStone Group's income statement shows a mixed performance. The TTM data indicates a revenue growth rate of 13.5%, which is positive. However, the company is facing significant challenges with profitability, as evidenced by negative net profit, EBIT, and EBITDA margins. The gross profit margin is low at 13%, indicating pressure on cost management. Historical data shows fluctuating revenue growth and profitability, with a notable decline in margins over time.

Balance Sheet

The balance sheet reveals a concerning financial structure with a negative stockholders' equity in the TTM period, leading to a high debt-to-equity ratio of 2.48. This indicates potential solvency issues. Historical data shows a trend of increasing leverage, with return on equity turning negative, reflecting challenges in generating returns for shareholders.

Cash Flow

Cash flow analysis shows a significant decline in free cash flow growth, with a negative growth rate of 65.8% in the TTM period. The operating cash flow to net income ratio is low, indicating limited cash generation relative to reported earnings. However, the free cash flow to net income ratio remains relatively stable, 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: 73.26
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 73.26 is above the 20-day moving average (MA) of 71.77, above the 50-day MA of 66.56, and above the 200-day MA of 60.52, indicating a bullish trend. The MACD of 2.21 indicates Positive momentum. The RSI at 59.25 is Neutral, neither overbought nor oversold. The STOCH value of 30.09 is Neutral, 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	$7.18B	14.15	11.10%	3.34%	14.48%	34.97%
HLNE	77 Outperform	$8.22B	26.69	31.85%	1.52%	13.01%	21.96%
AMG	74 Outperform	$8.65B	18.78	15.95%	0.01%	1.08%	8.24%
AB	73 Outperform	$3.81B	13.80	19.77%	8.93%	―	-12.92%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
IVZ	66 Neutral	$12.09B	-17.04	-2.10%	3.08%	6.64%	―
STEP	45 Neutral	$8.66B	―	-750.11%	2.17%	92.02%	-1386.34%