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StepStone Group (STEP) On New ASB Fund News Has Valuation Back In Focus

Simply Wall St · 2d ago

StepStone Group (STEP) is back in focus after ASB Capital announced a new ASB StepStone Private Financing Fund, a Shari’a compliant private credit vehicle built around senior secured lending.

For context, StepStone Group shares trade at US$44.18 after a 1-day share price decline of 2.17% and a 30-day share price return down 13.24%. The year-to-date share price return has fallen 33.67%, even though the 3-year total shareholder return is up 56.21%.

Compare how StepStone Group stacks up against other private markets and credit-focused businesses by scanning our hand-picked list of 20 high quality undiscovered gems for potential under-the-radar alternatives.

After a one year share price slide and a sizeable gap to analyst targets, the question around StepStone Group now is simple. Is most of the opportunity still in front of investors or already in the rear-view mirror as we look at valuation next?

Preferred Price-to-Sales of 1.8x for StepStone Group: Is it justified?

Valuation on StepStone Group right now hinges on its P/S ratio of 1.8x, which screens as cheap against both industry and peer averages even after the recent share price slide to $44.18.

The P/S multiple compares the market value of the equity to its revenue. For a diversified private markets platform like StepStone Group, that benchmark helps investors judge how much they are paying for each dollar of fee and investment income, especially when earnings are volatile or currently in loss territory.

StepStone Group trades on a P/S of 1.8x, while the US Capital Markets industry sits at 3.5x and the direct peer average is 4.4x. That is a steep relative discount. Against that, the estimated fair P/S ratio is 0.7x, which implies the current valuation is rich compared to the level the market could move towards if pricing lined up with that fair ratio estimate.

Explore the SWS fair ratio for StepStone Group.

Result: Price-to-Sales of 1.8x (OVERVALUED)

Still, StepStone Group faces clear pressure from its recent share price slide and ongoing net losses, which could keep valuation under strain if sentiment turns.

Find out about the key risks to this StepStone Group narrative.

Next Steps

Unsure whether the tone around StepStone Group feels too cautious or not cautious enough? Act quickly, review the underlying data, and carefully weigh those 2 important warning signs

Looking for more StepStone Group sized investment ideas?

If StepStone Group has your attention, do not stop here. Fresh ideas often come from comparing it with very different businesses that still meet your standards.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.