StepStone Group (NASDAQ:STEP) Shares Gap Up Following Better-Than-Expected Earnings

Key Points

• StepStone beat quarterly earnings expectations, reporting EPS of $0.66 versus the $0.55 consensus and revenue of $362.71 million versus estimates of $324.84 million.
• Shares opened at $50.58 after closing at $42.81, then traded at $46.31, reflecting a sharp but partially reversed post-earnings jump.
• The company declared a quarterly dividend of $0.33 per share, while its reported net margin remained negative at 30.53%.

Shares of StepStone Group Inc. (NASDAQ:STEP - Get Free Report) gapped up before the market opened on Friday following a better than expected earnings announcement. The stock had previously closed at $42.81, but opened at $50.58. StepStone Group shares last traded at $46.3050, with a volume of 141,530 shares changing hands.

The company reported $0.66 earnings per share for the quarter, topping the consensus estimate of $0.55 by $0.11. 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%.

StepStone Group Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Tuesday, December 15th. Investors of record on Monday, November 30th will be paid a dividend of $0.33 per share. This represents a $1.32 annualized dividend and a yield of 2.8%. The ex-dividend date of this dividend is Monday, November 30th. StepStone Group's dividend payout ratio (DPR) is presently -17.10%.

StepStone Group News Summary

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

• Positive Sentiment: StepStone reported earnings of $0.66 per share, above estimates of roughly $0.55–$0.57 and up from $0.54 a year earlier. Revenue was also reported above the $324.8 million consensus estimate; coverage cited differing revenue figures, including $362.7 million and $773.1 million. The earnings beat and growth are the clearest positive catalysts. StepStone Q2 earnings and revenue
• Positive Sentiment: The company declared a quarterly dividend of $0.33 per share, equivalent to $1.32 annually and a reported 2.9% yield. The payment is scheduled for December 15 to holders of record November 30. StepStone dividend and earnings details
• Negative Sentiment: Despite the earnings beat, reported net margin was negative 30.53%, a profitability measure that could temper enthusiasm about the quarter. StepStone quarterly earnings details

Analyst Upgrades and Downgrades

Several brokerages have issued reports on STEP. BMO Capital Markets lowered their price target on StepStone Group from $58.00 to $48.00 and set an "outperform" rating for the company in a report on Tuesday, October 27th. Weiss Ratings reiterated a "sell (d-)" rating on shares of StepStone Group in a research report on Friday, October 16th. Barclays increased their target price on StepStone Group from $60.00 to $62.00 and gave the stock an "overweight" rating in a research note on Friday, August 7th. UBS Group raised their target price on shares of StepStone Group from $63.00 to $69.00 and gave the stock a "buy" rating in a report on Friday, August 7th. Finally, Evercore reaffirmed an "outperform" rating and issued a $56.00 price target on shares of StepStone Group in a research note on Friday, August 7th. Eight investment analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and an average price target of $66.11.

Institutional Inflows and Outflows

Large investors have recently bought and sold shares of the stock. Hsbc Holdings PLC bought a new stake in shares of StepStone Group during the 1st quarter worth approximately $3,898,000. Tidal Investments LLC boosted its holdings in shares of StepStone Group by 11.8% in the 2nd quarter. Tidal Investments LLC now owns 314,523 shares of the company's stock valued at $13,009,000 after buying an additional 33,210 shares during the last quarter. Advent International L.P. bought a new position in shares of StepStone Group in the first quarter valued at $5,733,000. Engle Capital Management L.P. grew its stake in shares of StepStone Group by 82.5% in the first quarter. Engle Capital Management L.P. now owns 237,216 shares of the company's stock valued at $11,320,000 after buying an additional 107,216 shares in the last quarter. Finally, Lazard Asset Management LLC increased its holdings in StepStone Group by 95.6% during the first quarter. Lazard Asset Management LLC now owns 332,328 shares of the company's stock worth $15,859,000 after buying an additional 162,467 shares during the last quarter. 55.54% of the stock is owned by institutional investors and hedge funds.

StepStone Group Stock Performance

The firm has a market capitalization of $5.63 billion, a price-to-earnings ratio of -6.12 and a beta of 1.28. The stock's fifty day moving average is $45.68 and its two-hundred day moving average is $49.03. The company has a quick ratio of 0.19, a current ratio of 0.19 and a debt-to-equity ratio of 1.22.

StepStone Group Company Profile

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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