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StepStone Group (STEP) Rolls Out New Private Credit Data As Valuation Questions Linger

Simply Wall St · 1d ago

What the new PIK indicators could mean for StepStone Group stock

Kroll and StepStone Group (STEP) have introduced three new payment in kind indicators within their private credit benchmarks, giving investors structured data on how noncash interest is used across thousands of direct lending instruments.

For StepStone Group, the launch of these PIK indicators comes at a time when the share price has pulled back, with a 1-day share price return of down 2.81% and a year-to-date share price return of down 35.11%. However, the 3-year total shareholder return is up 62.51%.

Scan 19 high quality undiscovered gems that, like StepStone Group, are building tools around private credit and could be quietly reshaping how investors understand risk in this part of the market.

StepStone Group shares have retreated sharply even as it rolls out richer private credit data tools. Is that recent slide a reasonable entry point, or does it argue for patience until the valuation case looks clearer?

Preferred multiple of Price-to-Sales: Is it justified?

StepStone Group closed at $43.22, and the market is currently valuing the business at a P/S of 1.8x, which screens as inexpensive relative to both peers and the broader US Capital Markets industry.

P/S compares a company's market value to its revenue. For an asset manager like StepStone Group that earns fees on assets rather than selling physical products, it can be a useful shorthand for how much investors are willing to pay for each dollar of annual revenue.

The stock trades on a 1.8x P/S, while the Capital Markets industry average sits at 3.3x and the peer group average is 4.4x according to the provided data. That is a steep discount. At the same time, the estimated fair P/S ratio for StepStone Group is 0.6x. This suggests the market is assigning a richer multiple than this regression-based fair level and could still adjust toward that lower reference point.

Explore the SWS fair ratio for StepStone Group.

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

Still, the sharp year to date share price decline, alongside recent net losses and a richer P/S than the regression fair level, could pressure the StepStone Group narrative.

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

Next Steps

Mixed signals around StepStone Group can be confusing, so review the data, consider the moving parts, and then ground your view in the 1 key reward and 1 important warning sign.

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