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Oppenheimer initiated coverage of the StepStone Group (NASDAQ: PASS), an investment firm specializing in direct, fund of funds, direct secondary and indirect secondary investments, with an Outperform rating, as shares of the rest of analyst Chris Kotowski’s coverage outperformed STEP.
Its coverage group of leading private equity sponsors plus Hamilton Lane (HLNE), STEP’s closest peer, grew an average of 65% last year, compared to STEP’s 26%. Year to date, peers have grown an average of 7% versus 5% for STEP, Kotowski explained in a note to clients. “
As a result, our valuation methodology, which targets 130% market-relative P/E plus net cash and investment, shows notable upside for STEP at $48 per share, while the same methodology shows the valuation of most of the Alt group as quite stretched (the other exceptions are KKR and CG),” he said.
StepStone Football (STEP). gained 0.4% in premarket trading on Wednesday.
Kotowski’s Outperform rating on STEP contrasts with the SA Quant rating of Hold and aligns with Wall Street’s average rating of Buy.