StepStone Group (NASDAQ:STEP) Issues Earnings Results, Beats Expectations By $0.11 EPS

Key Points

• StepStone beat quarterly estimates: Adjusted earnings were $0.66 per share versus $0.55 expected, while revenue of $362.71 million topped the $324.84 million consensus.
• Fundraising and fee-related earnings surged: Record fee-related earnings reached $126 million, up 61% year over year, and the firm added a record $43 billion in gross AUM over the past 12 months.
• Despite the results, shares fell 7.7% on Thursday. StepStone also plans to retain cash for a potential private-wealth profits-interest buy-in, while keeping its regular quarterly dividend at $0.33 per share.

StepStone Group (NASDAQ:STEP - Get Free Report) posted its quarterly earnings data on Thursday. The company reported $0.66 earnings per share for the quarter, topping analysts' consensus estimates of $0.55 by $0.11, FiscalAI reports. The company had revenue of $362.71 million for the quarter, compared to analyst estimates of $324.84 million. StepStone Group had a negative net margin of 30.53% and a positive return on equity of 43.38%.

Here are the key takeaways from StepStone Group's conference call:

• StepStone reported record fee-related earnings of $126 million, up 61% year over year, with a 42% core FRE margin and adjusted earnings of $0.66 per share. Management cautioned that 42% is not a near-term run rate as recently hired staff and seasonal conference costs increase expenses; the company also reported a $71 million GAAP net loss, driven by a required fair-value adjustment related to the private wealth profits interest.
• Fundraising reached a company record, with $43 billion of gross AUM additions over the past 12 months. Fee-earning AUM rose to $158 billion and undeployed fee-earning capital reached a record $42 billion, providing a substantial base for future fee growth.
• Private wealth funds attracted $1.7 billion in subscriptions during the quarter, and the platform exceeded $23 billion in assets; redemptions were just 2%. Management cited continued growth in distribution partners and cross-selling, while viewing retirement-plan access as a longer-term opportunity.
• Management said higher rates and sluggish exits are weighing on private-market distributions, but expects secondaries and other liquidity solutions to remain important. More than $1 billion of net accrued carry is mostly tied to older programs, though the timing of realizations remains difficult to predict.
• StepStone plans to retain cash that would otherwise fund this fiscal year’s supplemental dividend as it prepares to exercise its option to buy in private wealth profits interests. The regular quarterly dividend of $0.33 per share is unchanged.

StepStone Group Trading Down 7.7%

Shares of NASDAQ:STEP traded down $3.59 during trading on Thursday, reaching $42.81. 1,494,779 shares of the company were exchanged, compared to its average volume of 806,360. The business's fifty day simple moving average is $45.68 and its 200-day simple moving average is $49.03. The company has a debt-to-equity ratio of 1.22, a current ratio of 0.19 and a quick ratio of 0.19. StepStone Group has a 12-month low of $38.85 and a 12-month high of $77.79. The firm has a market capitalization of $5.11 billion, a PE ratio of -5.55 and a beta of 1.28.

StepStone Group News Summary

Here are the key news stories impacting StepStone Group this week:

• Positive Sentiment: Quarterly earnings were $0.66 per share, above estimates of roughly $0.55–$0.57 and up from $0.54 a year earlier. Revenue of $362.71 million also exceeded the $324.84 million consensus estimate. StepStone Group Q2 Earnings and Revenues Top Estimates
• Neutral Sentiment: Additional coverage says adjusted earnings and revenue rose, and highlights the need to assess operating metrics beyond the headline results; the excerpts provided do not specify those metrics. StepStone Group Q2 Earnings: Key Metrics Versus Estimates
• Negative Sentiment: Despite the earnings and revenue beats, STEP came under selling pressure. The reports supplied do not point to a clear reason for the decline, so investors may be weighing details not captured in the headline figures. StepStone Group Reports Second Quarter Fiscal Year 2027 Results

Wall Street Analysts Forecast Growth

STEP has been the subject of several recent analyst reports. BMO Capital Markets dropped their target price on StepStone Group from $58.00 to $48.00 and set an "outperform" rating for the company in a research report on Tuesday, October 27th. UBS Group increased their price target on StepStone Group from $63.00 to $69.00 and gave the stock a "buy" rating in a report on Friday, August 7th. Wells Fargo & Company started coverage on StepStone Group in a research note on Friday, October 2nd. They set an "overweight" rating and a $55.00 price target for the company. Wall Street Zen cut StepStone Group from a "hold" rating to a "sell" rating in a report on Saturday, August 15th. Finally, Barclays upped their price objective on StepStone Group from $60.00 to $62.00 and gave the company an "overweight" rating in a research report on Friday, August 7th. Eight analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and an average target price of $66.11.

About StepStone Group

StepStone Group, Inc is a global investment firm focused on private markets. The company provides investment solutions and advisory services to institutional investors, family offices, and other clients seeking exposure to privately held and alternative assets.

Its activities include investments in private equity, venture capital, private debt, infrastructure, and real estate. StepStone builds customized portfolios through primary investments in funds, secondary-market transactions, and direct investments in companies and assets.

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