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Investing.com - Goldman Sachs upgraded StepStone Group (NASDAQ:STEP) from Neutral to Buy and set a price target of $83.00, representing 37% potential upside. Currently trading at $60.13 with a market cap of $7.2 billion, StepStone has shown strong momentum with a 14.5% return over the past year. According to InvestingPro data, the company maintains a "Fair" overall financial health score.
The upgrade is driven by Goldman’s view that StepStone is among the fastest-growing alternative asset managers, with a projected 24% normalized fee-related earnings compound annual growth rate from 2024 to 2028, and a 22% overall earnings per share CAGR during the same period. This growth outlook is supported by the company’s impressive 88% revenue growth in the last twelve months. InvestingPro analysis reveals 8 additional key insights about StepStone’s growth potential.
Goldman cites StepStone’s robust Private Wealth business, which currently represents 17% of management fees, as a key growth driver. The firm projects Private Wealth assets under management will reach approximately $33 billion by 2028, delivering a 67% management fee CAGR from 2025 to 2028.
The investment bank also highlights StepStone’s strong institutional business growth, particularly in Secondaries funds, and notes that the company’s $29 billion in Shadow AUM will support separately managed account growth. Additionally, Goldman expects StepStone to exercise its call option on the remaining economics of its Private Wealth business in the third quarter of 2027.
Goldman’s earnings per share estimates for StepStone are approximately 10% above consensus, with the firm noting that at 24 times 2026 price-to-earnings (net of stock-based compensation) and a 1.1 times price/earnings-to-growth ratio, StepStone’s growth attributes are not properly reflected in the stock’s current valuation.
In other recent news, StepStone Private Wealth Solutions, a division of StepStone Group, announced it has reached $10.2 billion in assets under management as of July 31, 2025. This growth has been primarily driven by the U.S. market, with new partnerships established globally, including in Europe, Australia, Hong Kong, Singapore, and the UK. Additionally, StepStone Group reported a 45% year-over-year increase in core fee-related earnings, although its adjusted ANI of $0.40 fell short of analyst estimates of $0.42-$0.43 due to timing-related performance fees. The company also achieved core margin expansion to 37%, a 300 basis point improvement from the previous year. Fee-earning assets under management subscriptions remained steady at $5 billion, meeting expectations. Meanwhile, Evercore ISI has raised its price target for StepStone Group to $62.00 from $61.00, maintaining an Outperform rating. The firm cited strong growth in core fee-related earnings as a key factor in its decision. These recent developments highlight significant financial milestones and strategic growth for StepStone Group.
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