StepStone Group (NASDAQ:STEP) to Buyback $100.00 million in Outstanding Stock

Key Points

• StepStone's board authorized a $100 million open-market share repurchase program to buy up to about 1.8% of outstanding stock, a move that typically signals management views the shares as undervalued.
• Analysts’ consensus is a "Moderate Buy" with an average price target of $78.86, substantially higher than the current share price of $45.25, underscoring a wide gap between street targets and market valuation.
• Recent results showed EPS beat ($0.65 vs. $0.60) while revenue missed expectations despite a 102.7% YoY increase; the company also declared a $0.28 quarterly dividend (2.5% yield) and insiders have been net sellers in recent months.

StepStone Group (NASDAQ:STEP - Get Free Report) declared that its board has initiated a share buyback plan on Monday, March 9th, RTT News reports. The company plans to repurchase $100.00 million in outstanding shares. This repurchase authorization allows the company to reacquire up to 1.8% of its stock through open market purchases. Stock repurchase plans are usually an indication that the company's leadership believes its stock is undervalued.

Analysts Set New Price Targets

A number of research firms have recently commented on STEP. Zacks Research cut shares of StepStone Group from a "strong-buy" rating to a "hold" rating in a report on Tuesday, February 10th. Evercore set a $73.00 price objective on shares of StepStone Group in a research report on Friday, February 6th. Weiss Ratings reissued a "sell (d+)" rating on shares of StepStone Group in a research note on Thursday, January 22nd. JPMorgan Chase & Co. raised their target price on shares of StepStone Group from $84.00 to $91.00 and gave the company an "overweight" rating in a research report on Friday, February 6th. Finally, Oppenheimer decreased their target price on shares of StepStone Group from $105.00 to $104.00 and set an "outperform" rating on the stock in a research note on Monday, February 9th. One research analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating, two have given a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat.com, the company presently has an average rating of "Moderate Buy" and an average price target of $78.86.

StepStone Group Stock Performance

Shares of StepStone Group stock traded down $0.41 on Monday, hitting $45.25. The stock had a trading volume of 1,528,506 shares, compared to its average volume of 1,862,486. The stock has a 50 day moving average of $62.15 and a 200 day moving average of $62.80. The firm has a market capitalization of $5.39 billion, a P/E ratio of -6.52 and a beta of 1.39. StepStone Group has a twelve month low of $40.07 and a twelve month high of $77.79.

StepStone Group (NASDAQ:STEP - Get Free Report) last posted its earnings results on Thursday, February 5th. The company reported $0.65 EPS for the quarter, topping the consensus estimate of $0.60 by $0.05. StepStone Group had a negative net margin of 30.66% and a positive return on equity of 31.44%. The business had revenue of $241.13 million for the quarter, compared to the consensus estimate of $363.92 million. During the same period last year, the company earned $0.44 EPS. The firm's revenue was up 102.7% compared to the same quarter last year. Equities analysts expect that StepStone Group will post 1.82 earnings per share for the current year.

StepStone Group Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Friday, March 13th. Stockholders of record on Friday, February 27th will be paid a $0.28 dividend. The ex-dividend date of this dividend is Friday, February 27th. This represents a $1.12 annualized dividend and a dividend yield of 2.5%. StepStone Group's dividend payout ratio is presently -16.14%.

Insider Transactions at StepStone Group

In related news, insider Michael I. Mccabe sold 117,838 shares of StepStone Group stock in a transaction that occurred on Wednesday, December 10th. The stock was sold at an average price of $66.20, for a total value of $7,800,875.60. Following the transaction, the insider directly owned 306,026 shares of the company's stock, valued at $20,258,921.20. The trade was a 27.80% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CEO Scott W. Hart sold 10,000 shares of the firm's stock in a transaction that occurred on Monday, January 26th. The stock was sold at an average price of $72.52, for a total transaction of $725,200.00. The disclosure for this sale is available in the SEC filing. Insiders have sold 212,052 shares of company stock valued at $14,096,290 over the last 90 days. 16.47% of the stock is owned by corporate insiders.

About StepStone Group

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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