StepStone Group (NASDAQ:STEP) Shares Gap Up After Analyst Upgrade

Key Points

• StepStone Group's shares experienced a significant increase in price after Goldman Sachs upgraded the stock from neutral to buy, raising the target price to $83.00.
• Despite missing earnings estimates, the company reported a revenue increase of 95.4% year-over-year, with an earnings per share (EPS) of $0.40.
• StepStone Group also declared a quarterly dividend increase from $0.24 to $0.28 per share, reflecting a growing commitment to shareholder returns.

StepStone Group Inc. (NASDAQ:STEP - Get Free Report)'s stock price gapped up prior to trading on Thursday after The Goldman Sachs Group upgraded the stock from a neutral rating to a buy rating. The stock had previously closed at $60.13, but opened at $63.39. The Goldman Sachs Group now has a $83.00 price target on the stock, up from their previous price target of $64.00. StepStone Group shares last traded at $64.56, with a volume of 349,969 shares changing hands.

A number of other brokerages have also recently commented on STEP. Zacks Research cut StepStone Group from a "strong-buy" rating to a "hold" rating in a report on Wednesday, August 13th. Barclays lifted their price target on StepStone Group from $62.00 to $63.00 and gave the company an "equal weight" rating in a research note on Friday, August 8th. Oppenheimer reissued an "outperform" rating and issued a $84.00 price target (up from $81.00) on shares of StepStone Group in a report on Monday, August 11th. Finally, Evercore ISI upped their target price on StepStone Group from $56.00 to $61.00 and gave the company an "outperform" rating in a research note on Thursday, July 10th. Four analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company's stock. According to MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and an average price target of $66.86.

Insiders Place Their Bets

In related news, CFO David Y. Park sold 1,000 shares of the firm's stock in a transaction dated Thursday, September 11th. The shares were sold at an average price of $63.26, for a total transaction of $63,260.00. Following the transaction, the chief financial officer directly owned 22,020 shares of the company's stock, valued at $1,392,985.20. This trade represents a 4.34% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, CEO Scott W. Hart sold 10,000 shares of StepStone Group stock in a transaction dated Monday, August 25th. The stock was sold at an average price of $61.44, for a total transaction of $614,400.00. Following the completion of the sale, the chief executive officer directly owned 50,000 shares in the company, valued at approximately $3,072,000. This represents a 16.67% decrease in their position. The disclosure for this sale can be found here. Insiders sold 31,000 shares of company stock valued at $1,893,360 over the last 90 days. Corporate insiders own 16.47% of the company's stock.

Institutional Investors Weigh In On StepStone Group

Several institutional investors have recently added to or reduced their stakes in the company. Nuveen Asset Management LLC increased its stake in shares of StepStone Group by 1.9% in the 4th quarter. Nuveen Asset Management LLC now owns 325,404 shares of the company's stock worth $18,834,000 after acquiring an additional 6,028 shares in the last quarter. Squarepoint Ops LLC bought a new position in shares of StepStone Group in the 4th quarter worth about $543,000. Voloridge Investment Management LLC bought a new stake in StepStone Group during the 4th quarter valued at about $5,980,000. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC increased its stake in StepStone Group by 68.1% during the 4th quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 156,920 shares of the company's stock valued at $9,083,000 after purchasing an additional 63,573 shares in the last quarter. Finally, Neo Ivy Capital Management purchased a new position in shares of StepStone Group in the fourth quarter worth approximately $65,000. Hedge funds and other institutional investors own 55.54% of the company's stock.

StepStone Group Stock Up 0.9%

The firm has a market cap of $7.61 billion, a PE ratio of -21.25 and a beta of 1.37. The firm's fifty day simple moving average is $60.84 and its two-hundred day simple moving average is $56.23.

StepStone Group (NASDAQ:STEP - Get Free Report) last issued its earnings results on Thursday, August 7th. The company reported $0.40 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.42 by ($0.02). StepStone Group had a negative net margin of 17.10% and a positive return on equity of 16.07%. The company had revenue of $237.47 million for the quarter, compared to analysts' expectations of $238.99 million. During the same period in the prior year, the firm posted $0.48 earnings per share. The firm's revenue for the quarter was up 95.4% compared to the same quarter last year. As a group, analysts anticipate that StepStone Group Inc. will post 1.82 earnings per share for the current fiscal year.

StepStone Group Increases Dividend

The company also recently disclosed a quarterly dividend, which was paid on Monday, September 15th. Shareholders of record on Friday, August 29th were issued a $0.28 dividend. This represents a $1.12 dividend on an annualized basis and a yield of 1.7%. The ex-dividend date was Friday, August 29th. This is an increase from StepStone Group's previous quarterly dividend of $0.24. StepStone Group's payout ratio is -36.36%.

StepStone Group Company Profile

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.