StepStone Group (NASDAQ:STEP) Posts Quarterly Earnings Results, Beats Expectations By $0.06 EPS

StepStone Group (NASDAQ:STEP) announced its earnings results on Wednesday. The company reported $0.57 earnings per share for the quarter, topping the consensus estimate of $0.51 by $0.06, FiscalAI reports. StepStone Group had a negative net margin of 26.88% and a positive return on equity of 37.49%. The business had revenue of $305.84 million during the quarter, compared to the consensus estimate of $292.11 million. During the same quarter in the prior year, the firm earned $0.68 earnings per share. The business’s quarterly revenue was up 3.4% compared to the same quarter last year.

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

• StepStone posted a record quarter of fee-related earnings at $105 million, up 12% year over year, with a 40% FRE margin and core FRE up 28% excluding retroactive fees.
• The company delivered a record quarter of fundraising at nearly $14 billion, contributing to a record fiscal year of $38 billion in gross AUM additions.
• Private wealth momentum remained strong, with $2.3 billion of new subscriptions in the quarter and StepStone highlighting its best-ever organic private wealth inflows, led by continued demand for the SPRING venture fund.
• Fee-earning AUM plus undeployed fee-earning capital reached a record $184 billion, and UFEC rose to about $40 billion, which management expects to convert into fee-earning assets over the next few quarters.
• Management also announced a $0.55 per share supplemental dividend, a $100 million share repurchase authorization, and a prospective fee-rate change for the flagship PE secondaries fund that will lower fees during the investment period but raise them afterward.

StepStone Group Price Performance

Shares of STEP stock opened at $53.88 on Friday. StepStone Group has a 12 month low of $40.58 and a 12 month high of $77.79. The firm has a market capitalization of $6.42 billion, a P/E ratio of -8.12 and a beta of 1.34. The company’s fifty day moving average price is $50.46 and its two-hundred day moving average price is $58.15.

StepStone Group Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, June 30th. Shareholders of record on Monday, June 15th will be issued a $0.28 dividend. The ex-dividend date is Monday, June 15th. This represents a $1.12 dividend on an annualized basis and a yield of 2.1%. StepStone Group’s payout ratio is currently -16.14%.

Wall Street Analysts Forecast Growth

STEP has been the subject of a number of recent research reports. Weiss Ratings cut shares of StepStone Group from a “sell (d)” rating to a “sell (d-)” rating in a research note on Wednesday, April 22nd. UBS Group initiated coverage on shares of StepStone Group in a research note on Thursday, April 2nd. They set a “buy” rating and a $60.00 price objective for the company. Oppenheimer dropped their price objective on shares of StepStone Group from $90.00 to $85.00 and set an “outperform” rating for the company in a research note on Thursday. Evercore restated an “outperform” rating and set a $60.00 target price on shares of StepStone Group in a research report on Thursday. Finally, BMO Capital Markets lifted their target price on shares of StepStone Group from $54.00 to $62.00 and gave the stock an “outperform” rating in a research note on Thursday. Seven equities research analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, the stock presently has an average rating of “Moderate Buy” and an average target price of $71.88.

Institutional Investors Weigh In On StepStone Group

Several hedge funds and other institutional investors have recently modified their holdings of STEP. Wellington Management Group LLP increased its position in shares of StepStone Group by 65.2% in the 3rd quarter. Wellington Management Group LLP now owns 5,723,073 shares of the company’s stock worth $373,774,000 after purchasing an additional 2,257,880 shares during the last quarter. Price T Rowe Associates Inc. MD increased its position in shares of StepStone Group by 16.5% in the 4th quarter. Price T Rowe Associates Inc. MD now owns 5,102,666 shares of the company’s stock worth $327,439,000 after purchasing an additional 724,201 shares during the last quarter. Ameriprise Financial Inc. grew its position in shares of StepStone Group by 320.8% during the 3rd quarter. Ameriprise Financial Inc. now owns 749,841 shares of the company’s stock valued at $48,972,000 after buying an additional 571,643 shares during the last quarter. UBS Group AG grew its position in shares of StepStone Group by 401.0% during the 3rd quarter. UBS Group AG now owns 604,518 shares of the company’s stock valued at $39,481,000 after buying an additional 483,847 shares during the last quarter. Finally, Balyasny Asset Management L.P. grew its position in shares of StepStone Group by 125.7% during the 2nd quarter. Balyasny Asset Management L.P. now owns 472,270 shares of the company’s stock valued at $26,211,000 after buying an additional 263,015 shares during the last quarter. Institutional investors own 55.54% of the company’s stock.

StepStone Group declared that its Board of Directors has approved a share repurchase program on Monday, March 9th that permits the company to repurchase $100.00 million in outstanding shares. This repurchase authorization permits the company to buy up to 1.8% of its stock through open market purchases. Stock repurchase programs are generally a sign that the company’s board of directors believes its stock is undervalued.

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.