A month has gone by since the last earnings report for Blackstone Group (BX - Free Report) . Shares have lost about 0.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Blackstone Group due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Blackstone Q3 Earnings & Revenues Beat, Expenses Down
Blackstone’s third-quarter 2019 distributable earnings of 58 cents surpassed the Zacks Consensus Estimate of 54 cents. However, the figure declined from 63 cents earned in the prior-year quarter.
Results benefited from growth in AUM and lower expenses. However, a decline in revenues acted as a headwind.
Net income attributable to Blackstone was $779.4 million, up from $442.7 million in the year-ago quarter.
Revenues & Costs Decline, AUM Improves
Total segment revenues for the reported quarter were $1.37 billion, down nearly 5.2% year over year. However, the top line surpassed the Zacks Consensus Estimate of $1.34 billion.
Total revenues on a GAAP basis declined 9.9% year over year to $1.74 billion.
Total expenses (GAAP basis) dipped 6.9% year over year to $947.2 million due to a decline in total compensation and benefits costs.
Fee-earning AUM grew 15.2% year over year to $394.14 billion. Total AUM amounted to $554.02 billion as of Sep 30, 2019, up 21.3% year over year. The rise in total AUM was largely driven by $20.4 billion of inflows.
As of Sep 30, 2019, Blackstone had $5.6 billion in total cash, cash equivalents and corporate treasury investments, and $11.6 billion in cash and net investments.
Share Repurchase Update
Blackstone repurchased 2.8 million shares in the reported quarter.
The company expects fee-related earnings to be more than $1.70 per share in 2020 and $2 per share, going forward.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
Currently, Blackstone Group has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Blackstone Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.