StepStone Group Inc.

STEP

$50.14

-1.51%

N/A-$0.77

Financial Services

Asset Management

NASDAQ

Active Trading

StepStone Group Inc. is a private equity and venture capital firm specializing in primary, direct, fund of funds, secondary direct, and secondary ...

Fundamental Analysis of STEP

Key Strengths

Strong brand and reputation in private markets with a global footprint across North America, Europe, Asia, and other regions.

Diversified investment strategies across private equity, credit, real estate, infrastructure, and venture capital, reducing concentration risk.

Risk Factors

Negative profitability: Net loss of $521 million and negative operating margin due to high operating expenses, especially stock-based compensation.

High leverage and negative equity: Debt-to-equity ratio is negative due to negative shareholder equity, indicating financial risk.

Profitability

Net Margin-30.53%

Operating Margin-58.22%

Valuation

P/E Ratio-6.60x

Current Ratio24.59

Efficiency

ROE156.73%

ROA-7.89%

Fundamental Analysis of STEP

StepStone Group Inc. is a global private markets investment firm specializing in private equity, venture capital, infrastructure, real estate, and credit. The company has a strong market position with a diversified portfolio and significant assets under management, which provides a stable fee base and growth potential. Its recent financials show a substantial increase in revenue to $1.993 billion (TTM), driven by strong fundraising and investment performance. However, the company reported a net loss of $521.4 million for the fiscal year ending March 2026, reflecting high operating expenses, including stock-based compensation and investment-related costs. The negative profitability metrics (e.g., net margin of -30.5%, ROE of 156.7% due to negative equity) are concerning but may be temporary, as the company's core business is growing. Analyst consensus is a 'Buy' with a price target of $67.75, indicating upside potential. The company pays a dividend with a yield of 3.5%, providing some income. Key strengths include a strong brand in private markets, a global presence, and a track record of successful fundraising. Risks include market volatility affecting investment valuations, regulatory changes, key-person risk, and high dependence on performance fees. The negative working capital and high leverage (debt-to-equity negative due to negative equity) raise solvency concerns, though the company has access to capital markets. Overall, StepStone is a growth-oriented asset manager with potential for long-term value creation, but investors should monitor its profitability and debt levels.

Key Strengths of STEP

Strong brand and reputation in private markets with a global footprint across North America, Europe, Asia, and other regions.
Diversified investment strategies across private equity, credit, real estate, infrastructure, and venture capital, reducing concentration risk.
Significant growth in revenue (TTM) driven by strong fundraising and management fees.
Experienced management team with a long track record in private markets.
Dividend payment with a yield of 3.5% provides shareholder returns.
Large and growing assets under management (implied by market cap and revenue) supports future fee income.
Employee ownership and alignment of interests through stock-based compensation (though high).
Strategic partnerships and co-investment opportunities enhance deal flow.

Risk Factors of STEP

Negative profitability: Net loss of $521 million and negative operating margin due to high operating expenses, especially stock-based compensation.
High leverage and negative equity: Debt-to-equity ratio is negative due to negative shareholder equity, indicating financial risk.
Dependence on performance fees: Revenue is partly tied to investment performance, which can be volatile.
Market and economic risk: Downturns in private markets can impact valuations and fundraising.
Key-person risk: Reliance on key executives like CEO Scott Hart and senior partners.
Regulatory changes: Changes in regulations affecting asset managers, such as tax treatment of carried interest.
Competition: Intense competition from other private market firms like Blackstone, KKR, and Carlyle.
Liquidity risk: Negative free cash flow and working capital could strain liquidity if capital markets tighten.

Market Cap vs Revenue & Earnings

Earnings

n/a

Revenue

n/a

Market cap

$6.47B

-6.6x

P/E Ratio

3.3x

P/S Ratio

Earnings & Revenue

Last Reportedn/a

Earnings per share (EPS)n/a

Gross Margin60.90%

Net Profit Margin-30.53%

Debt/Equity Ratio-2.91

Profitability Bridge (Current vs YoY)

How gross, operating and net margins shifted versus last year.

Revenue / Net Income / FCF History (USD B)

Growth Signals of STEP

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
Revenue	—	—	—	—	Flat
Diluted EPS	—	—	—	—	Flat
Free Cash Flow	—	—	—	—	Flat

Profitability of STEP

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
Net Margin	—	-30.57%	—	—	Flat
Operating Margin	—	-54.06%	—	—	Flat
ROE	—	—	—	—	Flat

Financial Health of STEP

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
Current Ratio	—	24.590	—	—	Flat
Quick Ratio	—	24.590	—	—	Flat
Debt / Equity	—	-2.908	—	—	Flat

Valuation of STEP

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
P/E	—	-7.33x	—	—	Flat
P/B	—	-6.29x	—	—	Flat

Supply Chain of STEP

RELATIONS

Upstream

Institutional Limited Partners (Pension Funds, SWFs, Endowments, Insurance Companies)J.P. Morgan Chase & Co.NYSE:JPM State Street CorporationNYSE:STT Northern Trust CorporationNASDAQ:NTRSDynamo Software (acquired by Foreside/Warburg Pincus)SS&C Technologies Holdings Inc.NASDAQ:SSNCKirkland & Ellis LLPErnst & Young (EY)Bloomberg L.P.MSCI Inc.NYSE:MSCI FactSet Research Systems Inc.NYSE:FDS

Downstream

California Public Employees' Retirement System (CalPERS)Canada Pension Plan Investment Board (CPP Investments)GIC Private Limited (Government of Singapore Investment Corporation)Abu Dhabi Investment Authority (ADIA)iCapital Network Inc.CAIS (Alternative Investment Platform)Mercer LLC (Marsh & McLennan Companies)NYSE:MMCNEPC LLCAon plcNYSE:AON

Proxies

Blackstone Inc.NYSE:BX Ares Management CorporationNYSE:ARES Blue Owl Capital Inc.NYSE:OWL KKR & Co. Inc.NYSE:KKR The Carlyle Group Inc.NASDAQ:CG

About UsPrivacy PolicyTerms of ServiceDisclaimerStock DirectoryETFsIndices13F HoldingsAnalyst TargetsFree ToolsTechnology MapJoin our Slack

Plutux is not an investment adviser. Market data and AI-generated analysis are for information and education only, not investment advice. Disclaimer