StepStone Group (NASDAQ:STEP) Releases Quarterly Earnings Results, Misses Expectations By $0.02 EPS

StepStone Group (NASDAQ:STEP) released its earnings results on Thursday. The company reported $0.48 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.50 by ($0.02), FiscalAI reports. The company had revenue of $300.60 million during the quarter, compared to analysts’ expectations of $309.32 million. StepStone Group had a negative net margin of 30.53% and a positive return on equity of 52.55%.

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

• Strong financial performance: Fee-related earnings rose 30% to $106 million, adjusted net income increased 22% to $60 million, and fee-earning AUM plus undeployed capital reached approximately $193 billion, up 19% organically year over year.
• Fundraising remained robust, with nearly $40 billion of gross AUM additions over the past year and $10 billion in the quarter. Private wealth subscriptions reached a record $2.8 billion, taking private wealth assets above $21 billion, while platform redemptions remained below 2%.
• Management expects the planned buy-in of the remaining Private Wealth profits interest to provide significant earnings-per-share accretion by capturing the full economics of a high-growth business, though the transaction will require a mix of equity, cash, and potentially additional debt financing.
• SPRING generated an exceptional 23% net return in the first half of the calendar year, driving strong inflows and anticipated incentive fees; however, management cautioned that such performance is not typical and that public-market exposure, including SpaceX, may create greater near-term volatility.
• The shift toward recently activated secondary funds is temporarily pressuring blended fee rates, while private wealth distribution fees are running at roughly $5 million per quarter and are expected to increase with platform assets.

StepStone Group Trading Down 7.8%

NASDAQ:STEP traded down $3.92 during trading hours on Friday, hitting $46.41. The company’s stock had a trading volume of 5,241,799 shares, compared to its average volume of 1,227,498. StepStone Group has a 52-week low of $38.85 and a 52-week high of $77.79. The stock has a market capitalization of $5.54 billion, a P/E ratio of -6.01 and a beta of 1.27. The stock has a fifty day moving average of $43.92 and a 200-day moving average of $50.37.

StepStone Group Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Tuesday, September 15th. Investors of record on Monday, August 31st will be issued a $0.33 dividend. This represents a $1.32 annualized dividend and a yield of 2.8%. This is a boost from StepStone Group’s previous quarterly dividend of $0.28. The ex-dividend date of this dividend is Monday, August 31st. StepStone Group’s dividend payout ratio is currently -16.47%.

StepStone Group News Roundup

Here are the key news stories impacting StepStone Group this week:

• Positive Sentiment: StepStone increased its quarterly dividend by 17.9% to $0.33 per share, implying an annualized yield of approximately 2.8%. The dividend is payable September 15 to shareholders of record August 31. StepStone Group Reports First Quarter Fiscal Year 2027 Results
• Positive Sentiment: A separate earnings analysis highlighted sales growth that exceeded estimates for the reported period, providing a constructive sign for the firm’s operating momentum. StepStone Group sales report
• Neutral Sentiment: Management’s first-quarter fiscal 2027 earnings call provided additional commentary on results and business conditions, but the available report does not specify new guidance or major strategic changes. StepStone Group Q1 2027 Earnings Call Transcript
• Negative Sentiment: StepStone reported quarterly EPS of $0.48, below consensus estimates of roughly $0.50–$0.51, although earnings improved from $0.40 a year earlier. Revenue of $300.6 million also fell short of the approximately $309.3 million consensus estimate. The dual miss likely drove the negative reaction. StepStone Group misses Q1 earnings and revenue estimates

Analyst Upgrades and Downgrades

Several brokerages have weighed in on STEP. Barclays upped their price target on StepStone Group from $60.00 to $62.00 and gave the stock an “overweight” rating in a report on Friday. UBS Group reiterated a “buy” rating and issued a $69.00 price objective on shares of StepStone Group in a research note on Friday. BMO Capital Markets reissued an “outperform” rating and set a $58.00 price objective on shares of StepStone Group in a research report on Friday. Evercore restated an “outperform” rating and set a $56.00 target price on shares of StepStone Group in a research note on Friday. Finally, Morgan Stanley reduced their target price on shares of StepStone Group from $72.00 to $63.00 and set an “equal weight” rating on the stock in a report on Tuesday, July 21st. Seven investment analysts have rated the stock with a Buy rating, two have given a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat, StepStone Group currently has an average rating of “Moderate Buy” and an average price target of $70.88.

Insider Transactions at StepStone Group

In other StepStone Group news, insider Michael I. Mccabe acquired 120,000 shares of the company’s stock in a transaction dated Thursday, June 11th. The shares were acquired at an average price of $41.85 per share, for a total transaction of $5,022,000.00. Following the acquisition, the insider owned 433,178 shares in the company, valued at $18,128,499.30. The trade was a 38.32% increase in their position. The purchase was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, COO Jose A. Fernandez sold 2,290 shares of the stock in a transaction dated Wednesday, June 3rd. The shares were sold at an average price of $42.64, for a total value of $97,645.60. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 15.70% of the stock is owned by insiders.

Hedge Funds Weigh In On StepStone Group

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the business. Royal Bank of Canada increased its stake in StepStone Group by 72.6% in the first quarter. Royal Bank of Canada now owns 9,135 shares of the company’s stock valued at $477,000 after purchasing an additional 3,843 shares during the last quarter. AQR Capital Management LLC lifted its position in shares of StepStone Group by 6.5% during the 1st quarter. AQR Capital Management LLC now owns 14,904 shares of the company’s stock worth $778,000 after buying an additional 908 shares during the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. boosted its holdings in shares of StepStone Group by 6.0% in the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 39,602 shares of the company’s stock valued at $2,068,000 after buying an additional 2,238 shares in the last quarter. Goldman Sachs Group Inc. boosted its holdings in shares of StepStone Group by 21.6% in the 1st quarter. Goldman Sachs Group Inc. now owns 357,281 shares of the company’s stock valued at $18,661,000 after buying an additional 63,519 shares in the last quarter. Finally, United Services Automobile Association purchased a new position in shares of StepStone Group in the 1st quarter valued at $209,000. 55.54% of the stock is owned by institutional investors and hedge funds.

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.