StepStone Group (NASDAQ:STEP) Shares Gap Down After Earnings Miss

Key Points

• StepStone Group Inc. shares fell sharply after the company reported an earnings miss, with a 40 cents EPS that was below analysts' expectations of 42 cents.
• The company announced a quarterly dividend of $0.24 per share, translating to an annualized dividend payout of $0.96 and a yield of 1.6%.
• Several brokerages have issued revised price targets for StepStone Group, with Goldman Sachs raising its target to $63 while Morgan Stanley lowered it to $51, reflecting mixed sentiment among analysts.

StepStone Group Inc. (NASDAQ:STEP - Get Free Report) shares gapped down prior to trading on Friday following a weaker than expected earnings announcement. The stock had previously closed at $57.45, but opened at $54.11. StepStone Group shares last traded at $58.26, with a volume of 59,596 shares changing hands.

The company reported $0.40 EPS for the quarter, missing analysts' consensus estimates of $0.42 by ($0.02). StepStone Group had a positive return on equity of 15.21% and a negative net margin of 15.28%. The company had revenue of $237.47 million for the quarter, compared to analyst estimates of $238.99 million. During the same period last year, the firm earned $0.48 earnings per share. The firm's revenue for the quarter was up 95.4% on a year-over-year basis.

StepStone Group Dividend Announcement

The company also recently announced a quarterly dividend, which was paid on Monday, June 30th. Stockholders of record on Friday, June 13th were issued a dividend of $0.24 per share. The ex-dividend date of this dividend was Friday, June 13th. This represents a $0.96 dividend on an annualized basis and a dividend yield of 1.6%. StepStone Group's dividend payout ratio (DPR) is currently -40.17%.

Wall Street Analysts Forecast Growth

Several brokerages have recently weighed in on STEP. The Goldman Sachs Group increased their price target on StepStone Group from $57.00 to $63.00 and gave the company a "neutral" rating in a research note on Wednesday, May 28th. Evercore ISI raised their price target on shares of StepStone Group from $56.00 to $61.00 and gave the stock an "outperform" rating in a report on Thursday, July 10th. Oppenheimer upped their price objective on shares of StepStone Group from $74.00 to $81.00 and gave the company an "outperform" rating in a research note on Monday, July 14th. Barclays lifted their target price on shares of StepStone Group from $62.00 to $63.00 and gave the stock an "equal weight" rating in a research note on Friday. Finally, Morgan Stanley decreased their price target on StepStone Group from $66.00 to $51.00 and set an "equal weight" rating for the company in a report on Monday, April 14th. Four research analysts have rated the stock with a hold rating and three have issued a buy rating to the company. According to data from MarketBeat, StepStone Group has a consensus rating of "Hold" and a consensus target price of $63.57.

Insider Transactions at StepStone Group

In related news, insider Jason P. Ment sold 55,608 shares of the company's stock in a transaction on Wednesday, May 28th. The stock was sold at an average price of $60.71, for a total value of $3,375,961.68. Following the sale, the insider directly owned 34,155 shares of the company's stock, valued at $2,073,550.05. This represents a 61.95% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, insider Michael I. Mccabe sold 67,718 shares of the firm's stock in a transaction on Thursday, June 12th. The shares were sold at an average price of $56.54, for a total value of $3,828,775.72. Following the transaction, the insider directly owned 423,864 shares of the company's stock, valued at $23,965,270.56. This represents a 13.78% decrease in their position. The disclosure for this sale can be found here. Insiders sold a total of 426,144 shares of company stock valued at $25,370,101 over the last three months. Corporate insiders own 16.47% of the company's stock.

Institutional Inflows and Outflows

A number of large investors have recently bought and sold shares of the business. Sumitomo Mitsui Trust Group Inc. raised its position in shares of StepStone Group by 77.4% in the 1st quarter. Sumitomo Mitsui Trust Group Inc. now owns 14,413 shares of the company's stock worth $753,000 after purchasing an additional 6,289 shares during the last quarter. GAMMA Investing LLC raised its holdings in StepStone Group by 38.5% in the first quarter. GAMMA Investing LLC now owns 1,169 shares of the company's stock worth $61,000 after buying an additional 325 shares during the last quarter. Harbor Capital Advisors Inc. lifted its stake in shares of StepStone Group by 42.8% in the first quarter. Harbor Capital Advisors Inc. now owns 23,527 shares of the company's stock worth $1,229,000 after buying an additional 7,053 shares in the last quarter. Yousif Capital Management LLC grew its holdings in shares of StepStone Group by 2.7% during the first quarter. Yousif Capital Management LLC now owns 24,558 shares of the company's stock valued at $1,283,000 after buying an additional 641 shares during the last quarter. Finally, BNP Paribas Financial Markets purchased a new stake in shares of StepStone Group during the fourth quarter valued at approximately $558,000. 55.54% of the stock is owned by hedge funds and other institutional investors.

StepStone Group Price Performance

The company has a market cap of $6.79 billion, a P/E ratio of -24.24 and a beta of 1.37. The company's 50-day moving average is $57.74 and its two-hundred day moving average is $56.33.

About StepStone Group

StepStone Group Inc is a private equity and venture capital firm specializing in direct, fund of funds, secondary direct, and secondary indirect investments. For direct investment, it seeks to invest in private debt, venture debt, incubation, mezzanine, distressed/vulture, seed/startup, early venture, mid venture, late venture, emerging growth, later stage, turnaround, growth capital, industry consolidation, recapitalization, buyout investments in mature and middle market companies.

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