StepStone Group trades at $64.55 per share and has stayed right on track with the overall market, gaining 28.5% over the last six months. At the same time, the S&P 500 has returned 23.9%.
Is STEP a buy right now? Find out in our full research report, it’s free for active Edge members.
Why Are We Positive On StepStone Group?
Operating as both an advisor and asset manager with over $100 billion in assets under management, StepStone Group (NASDAQ: STEP) is an investment firm that provides clients with access to private market investments across private equity, real estate, private debt, and infrastructure.
1. Skyrocketing Revenue Shows Strong Momentum
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
Luckily, StepStone Group’s revenue grew at an incredible 27.3% compounded annual growth rate over the last five years. Its growth beat the average financials company and shows its offerings resonate with customers.
2. EPS Increasing Steadily
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
StepStone Group’s full-year EPS grew at a solid 14.9% compounded annual growth rate over the last four years, better than the broader financials sector.
3. Stellar ROE Showcases Lucrative Growth Opportunities
Return on equity (ROE) reveals the profit generated per dollar of shareholder equity, which represents a key source of bank funding. Banks maintaining elevated ROE levels tend to accelerate wealth creation for shareholders via earnings retention, buybacks, and distributions.
Over the last five years, StepStone Group has averaged an ROE of 24.6%, exceptional for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows StepStone Group has a strong competitive moat.
Final Judgment
These are just a few reasons why we think StepStone Group is an elite financials company, but at $64.55 per share (or 31.8× forward P/E), is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.
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