StepStone Group (NASDAQ:STEP) Posts Quarterly Earnings Results, Misses Expectations By $0.02 EPS

Key Points

• StepStone missed quarterly expectations: EPS was $0.48 versus the $0.50 consensus, while revenue of $300.6 million fell short of estimates of $309.3 million. The stock declined 7.8% following the results.
• Underlying business growth remained strong: Fee-related earnings rose 30% to $106 million, adjusted net income increased 22% to $60 million, and fee-earning AUM plus undeployed capital reached approximately $193 billion.
• Investors received a higher dividend: StepStone raised its quarterly payout from $0.28 to $0.33 per share, implying an annualized yield of about 2.8%; analysts maintain a “Moderate Buy” consensus with an average price target of $70.88.

StepStone Group (NASDAQ:STEP - Get Free Report) announced its quarterly earnings results on Thursday. The company reported $0.48 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.50 by ($0.02), FiscalAI reports. The firm had revenue of $300.60 million for the quarter, compared to analyst estimates of $309.32 million. StepStone Group had a positive return on equity of 52.55% and a negative net margin of 30.53%.

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

• Strong financial performance: Fee-related earnings rose 30% to $106 million, adjusted net income increased 22% to $60 million, and fee-earning AUM plus undeployed capital reached approximately $193 billion, up 19% organically year over year.
• Fundraising remained robust, with nearly $40 billion of gross AUM additions over the past year and $10 billion in the quarter. Private wealth subscriptions reached a record $2.8 billion, taking private wealth assets above $21 billion, while platform redemptions remained below 2%.
• Management expects the planned buy-in of the remaining Private Wealth profits interest to provide significant earnings-per-share accretion by capturing the full economics of a high-growth business, though the transaction will require a mix of equity, cash, and potentially additional debt financing.
• SPRING generated an exceptional 23% net return in the first half of the calendar year, driving strong inflows and anticipated incentive fees; however, management cautioned that such performance is not typical and that public-market exposure, including SpaceX, may create greater near-term volatility.
• The shift toward recently activated secondary funds is temporarily pressuring blended fee rates, while private wealth distribution fees are running at roughly $5 million per quarter and are expected to increase with platform assets.

StepStone Group Stock Down 7.8%

NASDAQ STEP traded down $3.92 on Friday, reaching $46.41. The stock had a trading volume of 5,241,799 shares, compared to its average volume of 1,227,498. The stock has a fifty day moving average price of $43.92 and a two-hundred day moving average price of $50.37. 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 $5.54 billion, a price-to-earnings ratio of -6.01 and a beta of 1.27.

StepStone Group Increases Dividend

The company also recently announced a quarterly dividend, which will be paid on Tuesday, September 15th. Shareholders of record on Monday, August 31st will be given a $0.33 dividend. The ex-dividend date of this dividend is Monday, August 31st. This is a positive change from StepStone Group's previous quarterly dividend of $0.28. This represents a $1.32 dividend on an annualized basis and a yield of 2.8%. StepStone Group's dividend payout ratio is presently -16.47%.

Insider Buying and Selling at StepStone Group

In related news, COO Jose A. Fernandez sold 100,000 shares of the stock in a transaction dated Monday, June 1st. The stock was sold at an average price of $48.60, for a total transaction of $4,860,000.00. Following the transaction, the chief operating officer owned 102,290 shares of the company's stock, valued at approximately $4,971,294. This represents a 49.43% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Michael I. Mccabe bought 120,000 shares of the firm's stock in a transaction that occurred on Thursday, June 11th. The shares were purchased at an average cost of $41.85 per share, for a total transaction of $5,022,000.00. Following the purchase, the insider owned 433,178 shares in the company, valued at $18,128,499.30. This represents a 38.32% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. Company insiders own 15.70% of the company's stock.

Institutional Trading of StepStone Group

A number of institutional investors and hedge funds have recently bought and sold shares of STEP. Corient Private Wealth LLC boosted its stake in shares of StepStone Group by 14.6% in the fourth quarter. Corient Private Wealth LLC now owns 7,649 shares of the company's stock valued at $491,000 after purchasing an additional 976 shares during the period. Empowered Funds LLC acquired a new position in shares of StepStone Group in the fourth quarter valued at approximately $136,000. XTX Topco Ltd increased its stake in StepStone Group by 114.6% during the 4th quarter. XTX Topco Ltd now owns 14,318 shares of the company's stock worth $919,000 after buying an additional 7,645 shares during the period. VARCOV Co. purchased a new stake in StepStone Group during the 4th quarter worth approximately $238,000. Finally, Voloridge Investment Management LLC increased its stake in StepStone Group by 25.3% during the 4th quarter. Voloridge Investment Management LLC now owns 370,239 shares of the company's stock worth $23,758,000 after buying an additional 74,745 shares during the period. 55.54% of the stock is currently owned by hedge funds and other institutional investors.

Analyst Upgrades and Downgrades

A number of research firms recently commented on STEP. Evercore reiterated an "outperform" rating and issued a $56.00 price objective on shares of StepStone Group in a report on Friday. Weiss Ratings restated a "sell (d-)" rating on shares of StepStone Group in a research report on Monday, July 20th. Barclays lifted their target price on StepStone Group from $60.00 to $62.00 and gave the company an "overweight" rating in a research report on Friday. UBS Group reiterated a "buy" rating and set a $69.00 price target on shares of StepStone Group in a report on Friday. Finally, Oppenheimer cut their price objective on StepStone Group from $90.00 to $85.00 and set an "outperform" rating for the company in a research report on Thursday, May 21st. Seven analysts have rated the stock with a Buy rating, two have given a Hold rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat.com, StepStone Group has a consensus rating of "Moderate Buy" and an average target price of $70.88.

Trending Headlines about StepStone Group

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

• Positive Sentiment: StepStone increased its quarterly dividend by 17.9% to $0.33 per share, implying an annualized yield of approximately 2.8%. The dividend is payable September 15 to shareholders of record August 31. StepStone Group Reports First Quarter Fiscal Year 2027 Results
• Positive Sentiment: A separate earnings analysis highlighted sales growth that exceeded estimates for the reported period, providing a constructive sign for the firm’s operating momentum. StepStone Group sales report
• Neutral Sentiment: Management’s first-quarter fiscal 2027 earnings call provided additional commentary on results and business conditions, but the available report does not specify new guidance or major strategic changes. StepStone Group Q1 2027 Earnings Call Transcript
• Negative Sentiment: StepStone reported quarterly EPS of $0.48, below consensus estimates of roughly $0.50–$0.51, although earnings improved from $0.40 a year earlier. Revenue of $300.6 million also fell short of the approximately $309.3 million consensus estimate. The dual miss likely drove the negative reaction. StepStone Group misses Q1 earnings and revenue estimates

StepStone Group Company Profile

StepStone Group is a global private markets investment firm that provides specialized investment solutions across private equity, private credit and real assets. The firm offers customized portfolios, secondary interests, direct co-investments and tailored advisory services to institutional investors worldwide. StepStone's integrated research and data analytics platform supports its investment teams in sourcing opportunities and monitoring portfolio companies.

Founded in 2007 as an independent private markets specialist, the company has grown its presence through both organic expansion and strategic partnerships.

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