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StepStone Group (STEP) Moves 6.6% Higher: Will This Strength Last?

Zacks Equity Research
·2-min read

StepStone Group Inc. (STEP) shares soared 6.6% in the last trading session to close at $44.18. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 9.2% gain over the past four weeks.

The growing optimism surrounding StepStone's imminent inclusion in the S&P SmallCap 600 index, set to take effect before trading opens on Monday, Jun 24, is likely to have contributed to its recent price appreciation. There is a noticeable uptick in demand for StepStone's venture-capital secondary services. The scarcity of liquidity options for investors operating within the venture ecosystem has spurred STEP to raise a substantial $3.3 billion for a new secondary venture fund.

This company is expected to post quarterly earnings of $0.35 per share in its upcoming report, which represents a year-over-year change of +34.6%. Revenues are expected to be $183.5 million, up 3.1% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For StepStone Group, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on STEP going forward to see if this recent jump can turn into more strength down the road.

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The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

StepStone Group is part of the Zacks Financial - Miscellaneous Services industry. Blackstone Inc. (BX), another stock in the same industry, closed the last trading session 1.8% higher at $119.70. BX has returned -5.2% in the past month.

Blackstone Inc.'s consensus EPS estimate for the upcoming report has changed -0.6% over the past month to $1.04. Compared to the company's year-ago EPS, this represents a change of +11.8%. Blackstone Inc. currently boasts a Zacks Rank of #3 (Hold).

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Zacks Investment Research