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AUM Growth to Continue Supporting Blackstone's (BX) Top Line
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Blackstone Inc. (BX - Free Report) is well-poised to benefit from its strong fund-raising ability, revenue mix and global footprint. Moreover, continued net inflows are likely to keep supporting the company’s assets under management (AUM) growth.
Over the past 30 days, the Zacks Consensus Estimate for BX’s current-year earnings has been unchanged. The company currently sports a Zacks Rank #1 (Strong Buy).
So far this year, shares of Blackstone have lost 27.3% compared with the 20.3% decline recorded by the industry.
Image Source: Zacks Investment Research
Looking at fundamentals, while revenues (GAAP basis) declined in 2018, 2020 and the first quarter of 2022, the same witnessed a six-year (2016-2021) compound annual growth rate (CAGR) of 34.4%. The rise was mainly driven by improving management and advisory fees, and total investment income. Growth in revenues is expected in the upcoming quarters on the back of promising performance of the company’s funds.
Blackstone’s fee-earning AUM and total AUM consistently demonstrate strong growth, aided by increasing net inflows. Over the last four years (2018-2021), fee-earning AUM witnessed a CAGR of 23.8% and total AUM saw a CAGR of 23.1%. The company’s diversified products, revenue mix and superior position in the alternative investments space will likely continue to support AUM growth.
Despite a challenging fund-raising environment for asset managers, Blackstone has been successfully raising money. Fund-raising for the global private equity and real estate funds resulted in the company’s ‘dry powder’ or the available capital of $139.3 billion as of Mar 31, 2022.
Further, Blackstone has a decent balance sheet. As of Mar 31, 2022, the company’s total debt was $9.06 billion, higher than the cash, cash equivalents and corporate treasury investments balance of $8.83 billion. Nevertheless, the company has a $2.3-billion revolver credit facility, with a maturity date of November 2025. Also, it maintains investment grade ratings of A+ from both S&P Global and Fitch. Thus, despite a higher debt burden, Blackstone will likely be able to meet its debt obligations in the near term, even if the economic situation worsens.
However, persistently increasing operating expenses are expected to hurt the company's bottom line to an extent in the near term. Lower chances of sustainability of its capital deployment activities (given the volatile nature of its earnings) remains another major near-term concern.
Axos Financial’s current-year earnings estimates have been unchanged over the past 30 days. AX’s shares have lost 19.4% over the past year.
The consensus estimate for S&T Bancorp’s current-year earnings has been revised 1.5% upward over the past 30 days. Over the past year, STBA’s share price has declined 6.5%.
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AUM Growth to Continue Supporting Blackstone's (BX) Top Line
Blackstone Inc. (BX - Free Report) is well-poised to benefit from its strong fund-raising ability, revenue mix and global footprint. Moreover, continued net inflows are likely to keep supporting the company’s assets under management (AUM) growth.
Over the past 30 days, the Zacks Consensus Estimate for BX’s current-year earnings has been unchanged. The company currently sports a Zacks Rank #1 (Strong Buy).
So far this year, shares of Blackstone have lost 27.3% compared with the 20.3% decline recorded by the industry.
Image Source: Zacks Investment Research
Looking at fundamentals, while revenues (GAAP basis) declined in 2018, 2020 and the first quarter of 2022, the same witnessed a six-year (2016-2021) compound annual growth rate (CAGR) of 34.4%. The rise was mainly driven by improving management and advisory fees, and total investment income. Growth in revenues is expected in the upcoming quarters on the back of promising performance of the company’s funds.
Blackstone’s fee-earning AUM and total AUM consistently demonstrate strong growth, aided by increasing net inflows. Over the last four years (2018-2021), fee-earning AUM witnessed a CAGR of 23.8% and total AUM saw a CAGR of 23.1%. The company’s diversified products, revenue mix and superior position in the alternative investments space will likely continue to support AUM growth.
Despite a challenging fund-raising environment for asset managers, Blackstone has been successfully raising money. Fund-raising for the global private equity and real estate funds resulted in the company’s ‘dry powder’ or the available capital of $139.3 billion as of Mar 31, 2022.
Further, Blackstone has a decent balance sheet. As of Mar 31, 2022, the company’s total debt was $9.06 billion, higher than the cash, cash equivalents and corporate treasury investments balance of $8.83 billion. Nevertheless, the company has a $2.3-billion revolver credit facility, with a maturity date of November 2025. Also, it maintains investment grade ratings of A+ from both S&P Global and Fitch. Thus, despite a higher debt burden, Blackstone will likely be able to meet its debt obligations in the near term, even if the economic situation worsens.
However, persistently increasing operating expenses are expected to hurt the company's bottom line to an extent in the near term. Lower chances of sustainability of its capital deployment activities (given the volatile nature of its earnings) remains another major near-term concern.
Other Stocks Worth Considering
A couple of other top-ranked stocks from the finance space are Axos Financial, Inc. (AX - Free Report) and S&T Bancorp, Inc. (STBA - Free Report) . Currently, both AX and STBA carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Axos Financial’s current-year earnings estimates have been unchanged over the past 30 days. AX’s shares have lost 19.4% over the past year.
The consensus estimate for S&T Bancorp’s current-year earnings has been revised 1.5% upward over the past 30 days. Over the past year, STBA’s share price has declined 6.5%.