StepStone Group (NASDAQ:STEP) Posts Quarterly Earnings Results, Beats Expectations By $0.05 EPS

StepStone Group (NASDAQ:STEP) posted its quarterly earnings data on Thursday. The company reported $0.65 EPS for the quarter, topping analysts’ consensus estimates of $0.60 by $0.05, FiscalAI reports. The firm had revenue of $241.13 million during the quarter, compared to analyst estimates of $363.92 million. StepStone Group had a negative net margin of 40.06% and a positive return on equity of 21.53%. The company’s revenue was up 102.7% on a year-over-year basis. During the same quarter last year, the business posted $0.44 EPS.

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

• StepStone reported **record fundraising** and AUM growth with over $8 billion of gross additions in the quarter and more than $34 billion over the last 12 months, growing fee-earning assets plus UFEC to over $171 billion.
• Core operating results were strong: fee-related earnings were $89 million (up 20%) and core FRE rose 35% ex-retroactive fees, while adjusted net income was $80 million ($0.65/share), driven by higher fee and performance-related revenues.
• Spring delivered exceptional performance (39% for the year), generating over $200 million of gross incentive fees and about $25 million that flowed to pre-tax ANI this quarter, supporting future earnings power as profits interests are bought in.
• GAAP results showed a net loss attributable to StepStone of $123 million ($1.55/share) due to a fair-value accounting charge related to the buy-in of private-wealth profits and interests, and much of current incentive fee revenue is shared with teams and thus doesn’t fully drop to the bottom line today.
• Management highlights a diversified positioning into the AI ecosystem and estimates software exposure at ~11% of AUM (7% excluding venture), which presents both opportunities and disruption risks that are difficult to quantify near-term.

StepStone Group Stock Performance

NASDAQ STEP opened at $59.17 on Friday. The stock has a 50-day simple moving average of $67.67 and a 200 day simple moving average of $64.03. StepStone Group has a twelve month low of $40.07 and a twelve month high of $77.79. The stock has a market capitalization of $7.00 billion, a PE ratio of -7.40 and a beta of 1.32.

Insiders Place Their Bets

In other StepStone Group news, CEO Scott W. Hart sold 10,000 shares of the business’s stock in a transaction dated Monday, January 26th. The shares were sold at an average price of $72.52, for a total value of $725,200.00. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, COO Jose A. Fernandez sold 70,404 shares of StepStone Group stock in a transaction dated Tuesday, November 11th. The shares were sold at an average price of $61.41, for a total value of $4,323,509.64. Following the completion of the transaction, the chief operating officer directly owned 140,806 shares of the company’s stock, valued at $8,646,896.46. This represents a 33.33% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold a total of 362,858 shares of company stock valued at $23,422,844 in the last three months. Company insiders own 16.47% of the company’s stock.

Institutional Investors Weigh In On StepStone Group

Institutional investors have recently made changes to their positions in the stock. Quarry LP raised its holdings in shares of StepStone Group by 155.7% during the 3rd quarter. Quarry LP now owns 514 shares of the company’s stock worth $34,000 after buying an additional 313 shares in the last quarter. Darwin Wealth Management LLC bought a new stake in StepStone Group during the 2nd quarter worth $46,000. EverSource Wealth Advisors LLC increased its holdings in StepStone Group by 332.2% in the 2nd quarter. EverSource Wealth Advisors LLC now owns 1,236 shares of the company’s stock worth $69,000 after purchasing an additional 950 shares in the last quarter. Quadrant Capital Group LLC acquired a new stake in shares of StepStone Group during the third quarter valued at about $73,000. Finally, Osaic Holdings Inc. grew its holdings in shares of StepStone Group by 368.0% during the second quarter. Osaic Holdings Inc. now owns 2,223 shares of the company’s stock worth $118,000 after purchasing an additional 1,748 shares during the last quarter. 55.54% of the stock is owned by institutional investors and hedge funds.

Analyst Ratings Changes

Several brokerages have recently issued reports on STEP. Evercore ISI lifted their price target on StepStone Group from $68.00 to $76.00 and gave the company an “outperform” rating in a report on Thursday, January 22nd. Morgan Stanley set a $72.00 target price on shares of StepStone Group in a research note on Tuesday, January 27th. Zacks Research upgraded shares of StepStone Group from a “hold” rating to a “strong-buy” rating in a research note on Thursday, January 8th. Wall Street Zen upgraded shares of StepStone Group from a “sell” rating to a “hold” rating in a report on Saturday, January 10th. Finally, Oppenheimer reiterated an “outperform” rating and issued a $105.00 price objective on shares of StepStone Group in a report on Tuesday, January 20th. Two equities research analysts have rated the stock with a Strong Buy rating, four have assigned a Buy rating, two have assigned a Hold rating and one has given a Sell rating to the company’s stock. Based on data from MarketBeat.com, StepStone Group currently has an average rating of “Moderate Buy” and an average target price of $80.71.

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.