Investment firm Wall Street Zen has downgraded shares of StepStone Group (NASDAQ: STEP) from a hold rating to a sell rating, according to a research report released on October 21, 2023. This adjustment reflects a growing caution among analysts regarding the company’s stock performance.
Several other research firms have also recently updated their assessments of StepStone Group. Zacks Research downgraded the company from a “strong buy” to a “hold” rating on August 13. Meanwhile, Morgan Stanley raised its price target for StepStone Group from $61.00 to $66.00 while maintaining an “equal weight” rating. In contrast, BMO Capital Markets initiated coverage of the stock with an “outperform” rating and a price objective of $74.00.
Recent Financial Performance and Analyst Ratings
On November 6, 2023, StepStone Group reported quarterly earnings of $0.54 per share, surpassing analysts’ expectations of $0.49 by $0.05. The company achieved revenue of $282.34 million, significantly exceeding the forecast of $272.15 million. This marked a notable increase of 35.2% compared to the same quarter last year, when earnings stood at $0.45 per share.
The firm has an average analyst rating of “Moderate Buy” and a consensus target price of $74.29, as reported by MarketBeat. Currently, one analyst has rated the stock as a strong buy, four as buy, three as hold, and one as sell.
StepStone Group’s return on equity was reported at 21.53%, although the company faced a net margin of -40.06%.
Dividend Announcement and Insider Transactions
In a recent update, StepStone Group announced a quarterly dividend of $0.28, set to be paid on December 15, 2023, to investors on record as of November 28. This dividend represents an annualized amount of $1.12 and a yield of 1.8%. The company’s dividend payout ratio currently stands at -14.00%.
Insider transactions have also drawn attention. On November 25, 2023, CEO Scott W. Hart sold 10,000 shares at an average price of $61.70, totaling $617,000. Following this sale, he retains 20,000 shares valued at approximately $1,234,000, reflecting a 33.33% decrease in his ownership.
Chief Financial Officer David Y. Park also sold 1,000 shares on September 11 at an average price of $63.26, resulting in a transaction worth $63,260. After this transaction, he holds 22,020 shares valued at around $1,392,985.20.
Over the past 90 days, insiders have sold a total of 171,806 shares worth $10,680,214. Company insiders collectively own 16.47% of the company’s stock.
Institutional Investment Activity
Recent investment activity indicates a shift in ownership among institutional investors. Vanguard Group Inc. increased its stake by 4.0%, now holding 7,721,468 shares valued at $504,289,000. Price T. Rowe Associates Inc. MD raised its position by 7.8% to 6,038,665 shares, valued at $315,400,000.
Wellington Management Group LLP significantly boosted its stake by 65.2%, acquiring an additional 2,257,880 shares, bringing its total to 5,723,073 shares worth $373,774,000. Other significant players include Invesco Ltd., which increased its holdings by 2.4%, and Millennium Management LLC, which raised its stake by a remarkable 269.8%.
Hedge funds and other institutional investors currently hold 55.54% of StepStone Group’s stock, reflecting a robust interest in the company amid changing market conditions.
StepStone Group, a firm specializing in private equity and venture capital, is involved in a range of investment strategies, including direct investments in private debt and various stages of venture capital. The company’s services cater to mature and middle-market companies, positioning it as a significant player in the investment landscape.
