StepStone Group Inc. (STEP)
Valuation Overview•Is StepStone Group Inc. Overvalued or Undervalued?
Priced at a premium to peer multiples and intrinsic cash flows, demanding strong execution to justify current levels.
Fragile underlying quality score of 34/100; weak margins or elevated debt leverage warrant caution.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Mixed fundamental profile with offsetting strengths and weaknesses.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. This is paired with healthy capital returns, anchored by a strong dividend yield, though free cash flow coverage appears tight.
STEP struggles with subpar profitability and pressured margins. This is paired with a moderately leveraged but stable balance sheet.
The company maintains stable top-line performance paired with stable bottom-line earnings. However, profitability remains a major concern with severely compressed operating margins (-51.3%).
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $588.6M | +69.7% | — | — | — | |
| EBITDA | -$8.9M | — | — | — | — | |
| Net Income | -$7.8M | -190.3% | -204.9% | — | — | |
| EPS (Diluted) | $-0.10 | -165.9% | — | — | — | |
| Free Cash Flow | -$24.0M | +6.7% | -24.0% | -15.5% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 51.0% | 32.3% | -22.9% | 7.8% |
| Operating Margin | -51.3% | -16.2% | -2.9% | 13.1% |
| Net Margin | -26.9% | -11.1% | 1.6% | 6.7% |
| FCF Margin | 3.2% | 9.4% | -34.3% | -11.2% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.52 | $0.57 | +9.2% | ||
| Q1'26 | $0.60 | $0.65 | +8.3% | ||
| Q4'25 | $0.49 | $0.54 | +11.3% | ||
| Q3'25 | $0.43 | $-0.49 | -215.8% | ||
| Q3'25 | $0.43 | $-0.49 | -215.8% | ||
| Q2'25 | $0.44 | $0.68 | +54.2% | ||
| Q1'25 | $0.47 | $0.44 | -6.4% | ||
| Q4'24 | $0.46 | $0.45 | -3.1% |
Total return is -12.5% (1Y), lagging the benchmark by -37.5%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -30.5% | -39.8% | — |
| 1Y | -12.5% | -37.5% | +3.1% |
| 3YCAGR | +26.2% | +7.3% | +16.4% |
| 5YCAGR | +8.3% | -3.4% | +16.7% |
| 10YCAGR | +7.4% | -6.1% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about StepStone Group Inc. (STEP) valuation, health, and returns.
StepStone Group Inc. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Expensive versus peers compared to industry peers. overvalued (implying -49.2% downside from DCF intrinsic value of $22.95)
StepStone Group Inc. has multiple valuation anchors: DCF Intrinsic Value: $22.95 | Peer Relative Fair Value: $34.95 | Wall Street Analyst Target: $66.80 (implying +47.8% upside). A convergence of these signals offers higher conviction.
StepStone Group Inc. displays weak financial health with a composite quality score of 34/100, supported by a Piotroski F-Score of 5/9, Return on Invested Capital (ROIC) of -35.3%.
StepStone Group Inc. pays a 3.2% dividend yield, covered by a 0% payout ratio with 5 years of growth, supplemented by a 0.2% buyback yield.
StepStone Group Inc.'s current growth trajectory is Stable. The company achieved +69.7% 1Y revenue growth and -165.9% 1Y EPS growth, compared to its 3Y revenue CAGR of N/A.
Wall Street consensus is Buy based on 8 analysts, beating EPS expectations in 58% of recent quarters with a 3-quarter streak. The consensus price target represents a +47.8% change from current levels.
Investment risks for StepStone Group Inc. include: -44.5% 1-year max drawdown, high beta (1.64x market volatility). Volatility risk is characterized by a beta of 1.64x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.