Over the last six months, StepStone Group’s shares have sunk to $55.13, producing a disappointing 13.2% loss - a stark contrast to the S&P 500’s 5.8% gain. This might have investors contemplating their next move.
Given the weaker price action, is now the time to buy STEP? Find out in our full research report, it’s free.
Why Does StepStone Group Spark Debate?
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.
Two Positive Attributes:
1. Skyrocketing Revenue Shows Strong Momentum
A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.
Over the last five years, StepStone Group grew its revenue at an incredible 32.2% compounded annual growth rate. Its growth beat the average financials company and shows its offerings resonate with customers.
2. Outstanding Long-Term EPS Growth
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 EPS grew at a remarkable 20.4% compounded annual growth rate over the last five years. This performance was better than most financials businesses.
One Reason to be Careful:
Previous Growth Initiatives Haven’t Impressed
Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.
Over the last five years, StepStone Group has averaged an ROE of 1.1%, uninspiring for a company operating in a sector where the average shakes out around 10%. We’re optimistic StepStone Group can turn the ship around given its success in other measures of financial health.
Final Judgment
StepStone Group’s merits more than compensate for its flaws. With the recent decline, the stock trades at 22.8× forward P/E (or $55.13 per share). Is now a good time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More Than StepStone Group
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
