StepStone Group reports fiscal Q4 results on May 22 with options traders still leaning bullish — an unusual posture given the stock has shed nearly 5% on the week and 5% over the past month to close at $52.00.
The options signal is the clearest divergence in the setup. The put/call ratio has held near 0.37, roughly 1.5 standard deviations below its 20-day average of 0.45 — meaning call buyers are dominating even as the stock drifts lower. That's a meaningful tilt toward upside positioning, not defensive hedging. The borrow market reinforces the picture: availability runs above 2,550% of outstanding short interest, leaving roughly 25 shares available to borrow for every one already shorted. Cost to borrow has risen 21% on the week to 0.46% annualised, but that number remains negligible in absolute terms. Short interest itself is near 6% of the free float — up about 10% over the past month — but edged lower in the most recent session. Nothing in the lending market points to meaningful squeeze pressure.
The bull and bear cases diverge sharply on the growth outlook. Bulls point to the Private Wealth division hitting a record $15 billion in AUM, quarterly growth of $2.8 billion, and over $4 billion in new fundraising across commingled and managed accounts — evidence that institutional demand for StepStone's private markets access remains intact. The EPS momentum story backs that up: the 90-day EPS revision rank sits at the 94th percentile, and the 30-day reading at 82nd, suggesting analysts have been steadily lifting near-term estimates. Bears counter with valuation. At 18.5x trailing earnings and 12.6x book, STEP carries a premium multiple that leaves little room for operational disappointment — the stock is already down roughly 27% year-to-date. Analyst targets have been drifting lower since late last year, with several firms cutting price objectives in the $55–$60 range, though all have maintained positive ratings. The mean consensus target of $71 implies material upside from current levels, but that gap has been widening as the stock falls rather than recovering.
Peers are also under pressure heading into the print. HLNE and KKR each fell more than 3% on the day, CG and TPG are down roughly 9% on the week, and BX lost nearly 7% over the same stretch. STEP's decline has therefore been broadly in line with its alternative asset management cohort rather than a company-specific selloff — which means the earnings print carries an elevated burden of proof: it needs to demonstrate that the Private Wealth growth story justifies a premium over peers that are themselves repricing lower.
The May 22 report will test whether record AUM in the Private Wealth channel translates into the kind of fee growth and margin delivery that can close the gap between a $52 stock and a $71 consensus target.
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