Key takeaways
View moreBlackstone's current valuation appears to be fair, balancing its strong financial performance and growth prospects against potential risks. While profitability metrics suggest potential undervaluation, the high EV/Sales ratio and debt levels indicate possible overvaluation. The company's market leadership, strategic initiatives, and growth opportunities support its premium valuation, but market volatility and regulatory risks warrant caution.
- Blackstone's profitability metrics, such as gross profit margin (99.27%), net profit margin (21.26%), and EBITDA margin (54.40%), significantly exceed industry averages, indicating strong operational efficiency.
- The company's debt-to-equity ratio of 167.86% is higher than the industry average, posing a potential solvency risk that requires close monitoring.
- Strategic initiatives, including the expansion of the private wealth business through alliances with Wellington and Vanguard, are expected to drive future revenue and earnings growth.
- Recent price performance has been volatile, with Blackstone underperforming the Financial Select Sector SPDR Fund (XLF) year-to-date, reflecting market uncertainty.
- The 2025 Q1 earnings call highlighted strong first-quarter results, with distributable earnings up 11% year-over-year and AUM reaching a record of nearly $1.2 trillion, demonstrating the company's resilience and growth potential.
- Tariff uncertainty poses a risk to realizations, although direct exposure is limited, indicating a potential headwind for future performance.
- Blackstone's enterprise value to sales ratio of 10.28 is significantly higher than the industry average of 5.04, suggesting a premium valuation.
- The company's free cash flow to equity was $1,113.46 million for the quarter ending March 31, 2025, indicating strong cash generation capabilities.
- Blackstone's dedicated infrastructure platform continues to grow, with AUM up 36% year-over-year to $60 billion, highlighting a significant growth opportunity.
- The company's cash dividends paid were $1,858.54 million for the quarter ending March 31, 2025, reflecting a commitment to returning value to shareholders.
Evaluation summary
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Company Overview:
- Blackstone, Inc. (BX) is a global alternative asset manager, providing investment and fund management services. Its operations are divided into four segments: Real Estate, Private Equity, Credit and Insurance, and Hedge Fund Solutions.
- The Real Estate segment manages opportunistic real estate funds, Core+ real estate funds, high-yield real estate debt funds, and liquid real estate debt funds. The Private Equity segment manages flagship corporate private equity funds, sector and geographically focused corporate private equity funds, core private equity funds, and infrastructure-focused funds. The Credit and Insurance segment, known as Blackstone Credit, includes private credit strategies (mezzanine direct lending funds, private placement strategies) and liquid credit strategies (CLOs, closed-ended funds). The Hedge Fund Solutions segment manages commingled and customized hedge fund of fund solutions.
- Blackstone's peers include BlackRock Finance, Inc. (BLK) and KKR Group Co., Inc. (KKR). The Financial Select Sector SPDR Fund (XLF) is used as a benchmark.
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Financial Performance:
- Blackstone's revenue has fluctuated, with quarterly revenues of $2,892.23 million for the quarter ending March 31, 2025, $4,492.23 million for December 31, 2024, $2,520.86 million for September 30, 2024, and $2,723.89 million for June 30, 2024.
- The company demonstrates strong profitability. The gross profit margin for the quarter ending March 31, 2025, was 99.27%, compared to an industry average of 74.25%. The net profit margin was 21.26%, significantly higher than the industry average of 1.40%. The EBITDA margin was 54.40%, also substantially above the industry average of 18.91%.
- Blackstone's Return on Average Assets (ROA) was 5.99%, Return on Average Total Equity was 34.07%, and Return on Average Total Capital was 20.53% for the quarter ending March 31, 2025. These figures are significantly higher than the industry averages of 2.04%, 18.85%, and 7.20%, respectively.
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Operational Efficiency:
- Blackstone's total assets increased from $40,585.03 million on June 30, 2024, to $45,255.63 million on March 31, 2025. Total liabilities also increased from $21,910.73 million to $25,390.73 million over the same period.
- The company's cash and short-term investments increased from $2,176.19 million on December 31, 2024, to $3,399.94 million on March 31, 2025.
- Net operating cash flow was $1,142.74 million for the quarter ending March 31, 2025, compared to $295.49 million for the quarter ending December 31, 2024.
- Free cash flow to equity was $1,113.46 million for the quarter ending March 31, 2025.
- Capital expenditure was $29.28 million for the quarter ending March 31, 2025.
- Cash dividends paid were $1,858.54 million for the quarter ending March 31, 2025.
- The total debt to total equity ratio was 167.86% for the quarter ending March 31, 2025, higher than the industry average of 117.21%. The debt/EBITDA ratio was 1.9, lower than the industry average of 8.01.
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Growth Opportunities:
- Blackstone is focused on expanding its private wealth business, as highlighted in the 2025 Q1 earnings call. The strategic alliance with Wellington and Vanguard aims to provide integrated public-private investment solutions.
- The company is also growing its private credit business, particularly in the investment-grade segment. The investment-grade private credit business grew 35% year-over-year to $107 billion.
- Blackstone's dedicated infrastructure platform continues to grow, with AUM up 36% year-over-year to $60 billion.
- The company is innovating in technology, as reflected in the monetization of Bistro, a portfolio visualization software platform developed in-house.
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Recent Developments and Market Sentiment:
- The 2025 Q1 earnings call highlighted strong first-quarter results, with distributable earnings up 11% year-over-year and AUM reaching a record of nearly $1.2 trillion.
- Management expressed confidence in navigating market volatility, emphasizing the strength and stability of Blackstone's business model.
- A strategic alliance with Wellington and Vanguard was announced to collaborate on integrated public-private investment solutions.
- The company is experiencing strong traction with the open architecture multiclient model in the insurance channel, with AUM growing 18% year-over-year to $237 billion.
- Tariff uncertainty poses a risk to realizations, although direct exposure is limited.
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Risks and Threats:
- Difficult market and geopolitical conditions could adversely affect Blackstone's business and performance, as noted in the SEC filings.
- Regulatory changes could impact the alternative asset management industry.
- Potential conflicts of interest between Blackstone and the funds/vehicles it manages are a risk.
- Reliance on key personnel and the ability to attract and retain talented employees are critical.
- Blackstone is exposed to legal and compliance risks, including ongoing litigation matters.
- The high debt-to-equity ratio and increasing total debt warrant monitoring to ensure long-term solvency.
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Valuation Analysis:
- The enterprise value to EBITDA was 19.69 for the quarter ending March 31, 2025, approximately equal to the industry average of 19.68.
- The enterprise value to sales was 10.28, significantly higher than the industry average of 5.04, indicating a premium valuation.
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Price Performance:
- Blackstone's stock price has been volatile. From March 18, 2025, to May 16, 2025, the price ranged from $119.23 to $151.02.
- Year-to-date, Blackstone has significantly underperformed the Financial Select Sector SPDR Fund (XLF), with returns of -14.25% versus 7.4%.
- Over the past year, BX has underperformed both BlackRock Finance, Inc. (BLK) and KKR Group Co., Inc. (KKR).
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Future Outlook:
- Management expects management fees to continue on a strong positive trajectory, as stated in the 2025 Q1 earnings call.
- The company is well-positioned to navigate the current environment due to its long-term committed capital and investment firepower.
- Analysts expect near-term realization activity to be affected by policy-driven uncertainty and market volatility.
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Summary:
- Blackstone demonstrates strong profitability and operational efficiency, with margins and returns significantly exceeding industry averages.
- The company's increasing debt levels and high debt-to-equity ratio pose a solvency risk that warrants close monitoring.
- Blackstone's strategic focus on expanding its private wealth and credit businesses is expected to drive future revenue and earnings growth.
- The company's ability to navigate market volatility and capitalize on strategic opportunities positions it for continued success.
- Key metrics to monitor include the debt-to-equity ratio, cash flow from operations, and the performance of investments in unconsolidated subsidiaries.
- Blackstone's strengths include its diversified business model, strong brand, and experienced management team. Weaknesses include its high debt levels and exposure to market volatility. Opportunities include expanding private wealth and credit businesses. Threats include regulatory changes, competition, and macroeconomic risks.
- Overall, Blackstone presents a mixed investment profile. While the company exhibits strong profitability and growth potential, its high debt levels and exposure to market volatility warrant careful consideration.
Price history
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Fundamentals
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Insights
- Blackstone demonstrates strong profitability, with margins and returns significantly exceeding industry averages.
- The company's increasing debt levels and high debt-to-equity ratio pose a solvency risk that warrants close monitoring.
- Blackstone's strategic focus on expanding its private wealth and credit businesses is expected to drive future revenue and earnings growth.
- The company's efficient operations and asset utilization contribute to its strong financial performance.
- Blackstone's ability to navigate market volatility and capitalize on strategic opportunities positions it for continued success.
Analysis
- Revenue
- Blackstone's revenue has shown an increasing trend, indicating growth in the company's core business activities.
- The sales/revenue had positive growth in 4 of the last 8 quarters.
- The growth trend for sales/revenue is decreasing.
- The enterprise value to sales is significantly higher than the industry average, indicating a premium valuation.
- Profitability
- Blackstone's profitability ratios (gross profit margin, net profit margin, EBITDA margin, ROA, ROE, ROTC, ROIC) are all significantly higher than the industry averages, demonstrating strong overall profitability and efficient operations.
- The profitability ratios are trending upwards.
- The net profit margin is substantially higher than the industry average, demonstrating strong overall profitability.
- Liquidity
- Blackstone's liquidity position, as indicated by cash and short-term investments, has been volatile but remains strong.
- The company's short-term liquidity position is strong, as indicated by positive operating cash flow trends.
- The current and quick ratios are not available.
- Solvency
- Blackstone's total debt to total equity ratio is higher than the industry average, indicating a more leveraged capital structure.
- The debt/EBITDA ratio is lower than the industry average, suggesting manageable debt levels relative to earnings.
- The debt/EBITDA ratio is trending downwards.
- The increasing total debt and a high debt-to-equity ratio suggest a leveraged capital structure, which could pose risks if not managed effectively.
- Operational Efficiency
- Blackstone's operational efficiency is reflected in its high gross profit margin and EBITDA margin, which are significantly higher than the industry averages.
- The enterprise value to EBITDA is approximately equal to the industry average.
- The increasing accounts receivable indicates efficient revenue collection, while the decreasing net property, plant, and equipment suggest a focus on asset-light operations.
- Cash Flow Analysis - Blackstone's net operating cash flow has generally increased, driven by strong funds from operations. - The company's free cash flow is expected to grow, supporting debt repayment, dividend growth, and investment in organic growth opportunities. - The net operating cash flow is greater than the industry average.
- Risk Factors
- The high debt-to-equity ratio and increasing total debt warrant monitoring to ensure long-term solvency.
- Difficult market and geopolitical conditions could adversely affect Blackstone's business and performance.
- Regulatory changes could impact the alternative asset management industry.
- Potential conflicts of interest between Blackstone and the funds/vehicles it manages.
- Reliance on key personnel and the ability to attract and retain talented employees.
- Exposure to legal and compliance risks, including ongoing litigation matters.
- Future Outlook
- Blackstone is expected to continue growing its revenue and improving its profitability, driven by strategic initiatives such as expanding the private wealth business and growing its private credit business.
- The company's financial flexibility may be affected by the increasing debt levels, requiring careful management of debt obligations.
- Key metrics to monitor include the debt-to-equity ratio, cash flow from operations, and the performance of investments in unconsolidated subsidiaries.
- Profitability
Financial statements
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Public filings
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- Blackstone is the world's largest alternative asset manager, with a diversified business model across real estate, private equity, credit/insurance, and multi-asset investing strategies.
- The company has benefited from strong industry tailwinds, including institutional investors' increasing allocations to alternative assets, but faces risks from macroeconomic conditions, regulatory changes, and ongoing legal proceedings.
- Blackstone has demonstrated resilient financial performance, with its Real Estate, Private Equity, and Credit & Insurance segments driving the majority of its earnings. The company has maintained a strong liquidity position to fund its operations and investments.
- Fundraising and deployment trends have been positive, particularly in Blackstone's perpetual capital vehicles, which provide a source of stable, recurring revenue. However, a sustained decline in market conditions could negatively impact the company's performance.
- Key risks include exposure to difficult market environments, regulatory risks, potential conflicts of interest, reliance on key personnel, and ongoing legal matters that could have a material impact on the business.
- The alternative asset management industry has experienced strong growth, but regulatory changes and macroeconomic conditions can significantly affect the performance of Blackstone's investments and funds.
- Blackstone has completed strategic initiatives, such as integrating its credit and insurance businesses and entering long-term ventures, while continuing to see strong fundraising and deployment activity across its investment strategies.
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Core Business and Operations:
- Blackstone is the world's largest alternative asset manager, with a diversified business model across real estate, private equity, credit/insurance, and multi-asset investing strategies.
- The company has benefited from strong industry tailwinds, including institutional investors' increasing allocations to alternative assets, but faces risks from macroeconomic conditions, regulatory changes, and ongoing legal proceedings.
- Blackstone has demonstrated resilient financial performance, with its Real Estate, Private Equity, and Credit & Insurance segments driving the majority of its earnings. The company has maintained a strong liquidity position to fund its operations and investments.
- Fundraising and deployment trends have been positive, particularly in Blackstone's perpetual capital vehicles, which provide a source of stable, recurring revenue. However, a sustained decline in market conditions could negatively impact the company's performance.
- Key risks include exposure to difficult market environments, regulatory risks, potential conflicts of interest, reliance on key personnel, and ongoing legal matters that could have a material impact on the business.
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Industry and Market Trends:
- The alternative asset management industry has experienced strong growth driven by institutional investors' increasing allocations to alternative investments.
- Regulatory changes, such as the Dodd-Frank Act, have impacted the industry, requiring more transparency and oversight.
- Macroeconomic conditions, including interest rates, inflation, and market volatility, can significantly affect the performance of Blackstone's investments and funds.
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Recent Events:
- Blackstone completed the integration of its corporate credit and insurance businesses into a new Blackstone Credit & Insurance (BXCI) unit.
- The company transferred its residential debt business from the Real Estate segment to the Credit & Insurance segment.
- Blackstone entered into long-term strategic ventures with the Regents of the University of California, providing them access to Blackstone's real estate investment trust (BREIT).
- The company continued to see strong fundraising and deployment activity across its various investment strategies.
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Risk Factors:
- Difficult market and geopolitical conditions that could adversely affect Blackstone's business and performance.
- Regulatory changes that could impact the alternative asset management industry.
- Potential conflicts of interest between Blackstone and the funds/vehicles it manages.
- Reliance on key personnel and the ability to attract and retain talented employees.
- Exposure to legal and compliance risks, including ongoing litigation matters.
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Legal Matters:
- Blackstone is involved in various legal proceedings, including a lawsuit related to the Kentucky Retirement System's investment in certain hedge funds managed by Blackstone.
- The company is cooperating with an SEC inquiry related to the retention of certain electronic business communications.
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Management's Discussion and Analysis:
- Blackstone's business model generates revenue primarily from third-party assets under management, with a focus on growing fee-earning assets and performance revenues.
- The company has maintained a strong liquidity position, with access to various sources of capital to fund its operations and investments.
- Blackstone's segments have generally demonstrated resilient performance, with the Real Estate, Private Equity, and Credit & Insurance segments contributing the majority of the company's earnings.
- The company has continued to see positive fundraising and deployment trends across its various investment strategies, particularly in its perpetual capital vehicles.
Earnings calls
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Earnings Report 2025Q1 (2025-04-17)
Key takeaways
- Blackstone is well-positioned to navigate market volatility: The firm's long-term capital, diverse strategies, and experienced management team provide a competitive advantage in uncertain times.
- Private wealth remains a key growth driver: The strategic alliance with Wellington and Vanguard signals a commitment to expanding access to private markets for individual investors.
- Private credit continues to be a significant opportunity: The growth in investment-grade private credit and the ability to offer bespoke solutions to borrowers are driving strong inflows.
- Tariff uncertainty poses a risk to realizations: While direct exposure is limited, the potential for broader economic impacts and market volatility could affect the pace of realizations.
- Real estate is showing signs of recovery: Improved conversations with institutional LPs and a lack of new supply suggest a potential turnaround in the sector, although the timing remains uncertain.
Focus of management’s prepared remarks
- Strong First Quarter Results: Distributable earnings up 11% year-over-year, fee-related earnings grew 9%, and AUM reached a record of nearly $1.2 trillion.
- Fundraising Success: Raised $62 billion of inflows in Q1, the highest level in 3 years, and approximately $200 billion over the last 12 months, reflecting broad-based momentum.
- Navigating Market Uncertainty: The firm is built to navigate periods of uncertainty and dislocation, with long-term contracts and perpetual strategies providing flexibility.
- Dry Powder: $177 billion of dry powder positions the firm to take advantage of opportunities that arise in a challenging environment.
- Limited Direct Tariff Exposure: The direct first-order exposure across the portfolio from announced tariffs is limited, although there is potentially material impact to a relatively small group of companies.
- Private Wealth Growth: The firm manages over $270 billion in the private wealth channel, comprising nearly 1/4 of the firm's total AUM.
- Strategic Alliance: Announced a strategic alliance with Wellington and Vanguard to collaborate on integrated public-private investment solutions.
- Private Credit Expansion: The firm has established the world's largest third-party focused credit business with $465 billion across corporate and real estate credit.
- Investment-Grade Private Credit Opportunity: Significant opportunity in investment-grade private credit, where the business grew 35% year-over-year to $107 billion.
- Insurance Channel Traction: Strong traction with the open architecture multiclient model in the insurance channel, with AUM growing 18% year-over-year to $237 billion.
- Infrastructure Platform Growth: Dedicated infrastructure platform continues on its powerful growth trajectory with AUM up 36% year-over-year to $60 billion.
- Multi-Asset Investing Success: Multi-asset investing business, BXMA, generated the 20th straight quarter of positive composite performance in its largest strategy.
- Drawdown Fund Closings: Held final closings for both the European real estate fund and the real estate credit fund, along with the global private equity fund and the private equity energy transition fund.
- Innovation in Technology: Monetization of Bistro, a portfolio visualization software platform developed in-house, reflects the firm's culture of innovation.
Focus of the analyst Q&A
- Deployment Opportunities:
- How does Blackstone find the confidence to deploy capital in a highly uncertain and volatile environment?
- What is the expected cadence and type of deployment in the near term versus medium term?
- What leading indicators would give confidence that deployment is coming?
- Private Market Solutions:
- Why do private market solutions work well in any environment?
- What underlying characteristics of the business allow Blackstone to be offensive when others are pulling back?
- Why have the largest alternative asset managers emerged stronger from past cycles, and will this time be any different?
- North American Institutional Channel Fundraising:
- What is the outlook for fundraising in the North American institutional channel, given DPI headwinds?
- How does fundraising differ between private equity and other segments like infrastructure and private credit?
- Global Wealth Management Expansion:
- What is the opportunity to continue expanding the global wealth management business?
- How will the collaboration with Wellington and Vanguard come together in terms of products or opportunities?
- Tariff Impact Assessment:
- How does Blackstone define and assess the limited direct first-order tariff impact on its portfolio?
- What types of stresses are seen in the market, and how is the direct lending business holding up?
- Investment-Grade Opportunity:
- How will potential regulatory changes to bank capital requirements impact the origination opportunity for Blackstone in IG private credit?
- What is the high-level pitch to investment-grade borrowers for choosing a Blackstone solution versus capital markets or a bank?
- International Backdrop:
- How do tariff negotiations impact corporate decision-making internationally?
- Does Blackstone see any friction in deploying capital in Europe and Asia due to tariff back-and-forth?
- Do European capital markets efforts expand the opportunity for retail sales there?
- Wealth Flows:
- How are wealth flows expected to hold up broadly, given recent market volatility?
- Which asset classes are expected to remain in favor, given the uncertainty?
- Real Estate Fundraising:
- How much is the pitch for strong real estate returns resonating with LPs?
- How has appetite for real estate evolved?
- Financial Targets:
- What are the expectations for management fee growth through the rest of the year?
- Is there an update on the stable margin guidance, given the better-than-expected performance this quarter?
- Private Credit Outlook:
- Is it still a golden moment for private credit?
- What does the normalization in the credit outlook mean for the outlook for growth in private credit?
- 401(k) Opportunity:
- How close is the 401(k) opportunity?
- How does Blackstone feel about its current positioning to capitalize on that opportunity, given the Vanguard-Wellington partnership?
- Deployment Impediments:
- Is the bank loan market still an impediment to PE deployment?
- Is the direct lending business willing to step in now to fund other sponsors' deals, or is it still in wait-and-see mode?
- Capital Markets Environment:
- How would you characterize the capital markets environment today?
- What is expected to drive a better or worse environment in the coming months?
Summary
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Financial Performance
Blackstone reported strong first-quarter results with distributable earnings (DE) up 11% year-over-year to $1.4 billion, or $1.09 per share. Fee-related earnings (FRE) grew 9% year-over-year to $1.3 billion, marking one of the best quarters in the company's history. GAAP net income was $1.2 billion. The company declared a dividend of $0.93 per share. AUM reached a record of nearly $1.2 trillion, up 10% year-over-year.
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Revenue Drivers
The primary revenue drivers were strong inflows, particularly in the private wealth channel, and growth in management fees. Inflows totaled $62 billion for the quarter, the highest level in 3 years. Management fees increased 11% year-over-year to a record $1.9 billion. Private credit, especially investment-grade private credit, was a significant contributor. The private wealth channel now manages over $270 billion in AUM, comprising nearly a quarter of the firm's total AUM. Net realizations also contributed, increasing 22% year-over-year, driven by the sale of Bistro.
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Profit Margins and Cost Management
The company highlighted a strong underlying margin position. FRE for the last 12 months reached a record $5.4 billion, up 20% from the prior year comparable period, and has doubled in the past 4 years. Management expects management fees to continue on a strong positive trajectory. They are guiding to margin stability for the full year.
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Guidance and Outlook
Management anticipates near-term realization activity will be affected by policy-driven uncertainty and market volatility. They expect management fees to continue on a strong positive trajectory. The company is well-positioned to navigate the current environment due to its long-term committed capital and investment firepower. They believe the firm's ability to deliver significant realizations in more constructive markets is considerable.
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Strategic Initiatives
Key strategic initiatives include expanding the private wealth business, particularly through the alliance with Wellington and Vanguard to offer integrated public-private investment solutions. Blackstone is also focused on growing its private credit business, especially in the investment-grade segment. The company plans to launch its fifth perpetual flagship, BMACX, in the RIA channel. They are also focused on infrastructure and multi-asset investing.
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Management Commentary
Management expressed confidence in the firm's ability to navigate the uncertain market environment, emphasizing the strength and stability of Blackstone's business model. They highlighted the benefits of long-term committed capital, a unique brand, and talented personnel. CEO Steve Schwarzman stated, "We do some of our best works in times of volatility, and I have no doubt that will happen once again." President Jon Gray emphasized the strength of the private markets model and the firm's ability to be offensive when others are pulling back.
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Industry and Market Conditions
Management acknowledged the turbulent market backdrop and uncertainty around tariffs, noting their potential impact on economic growth and inflation. They believe a fast resolution to tariff negotiations is critical. They see opportunities arising from market volatility and dislocation, particularly in areas benefiting from long-term secular tailwinds. They noted that construction starts in U.S. logistics and apartments have fallen to their lowest levels in more than a decade, which is supportive for real estate values.
Comparative analysis
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Benchmarks (as of 2025-05-16)
Financial Select Sector SPDR Fund (XLF)
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Performance Comparison:
- Blackstone, Inc. (BX) has shown mixed performance compared to the Financial Select Sector SPDR Fund (XLF). Over the past two years, BX has outperformed XLF, with returns of 85.54% versus 64.08%. However, over the past three years, BX has underperformed XLF, with returns of 50.18% versus 59.62%. More recently, BX has significantly underperformed XLF year-to-date, with returns of -14.25% versus 7.4%. This suggests that while BX has had periods of strong performance, it has struggled more recently compared to the broader financial sector.
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Risk and Return Analysis:
- The annualized returns show that Blackstone, Inc. (BX) has provided higher returns over the past two years (36.21%) compared to the Financial Select Sector SPDR Fund (XLF) (28.09%). However, over a three-year period, BX's annualized return of 14.52% is lower than XLF's 16.87%.
- Blackstone, Inc. (BX) has consistently exhibited higher annualized volatility compared to the Financial Select Sector SPDR Fund (XLF). For example, in Q2 2022, BX's volatility ranged from 55.96% to 64.28%, while XLF's ranged from 27.84% to 30.12%. This indicates that BX's returns are more dispersed and subject to greater fluctuations than XLF's.
- Blackstone, Inc. (BX) has experienced a maximum drawdown of -49.29% on 2022-12-28, which is significantly larger than the Financial Select Sector SPDR Fund (XLF)'s maximum drawdown of -25.81% on 2022-10-12. This suggests that BX carries a higher level of risk and is more prone to substantial declines from its peak values.
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Risk-Adjusted Performance:
- The Sharpe ratios indicate that the Financial Select Sector SPDR Fund (XLF) generally offers better risk-adjusted returns compared to Blackstone, Inc. (BX). In Q4 2024, XLF's Sharpe ratio ranged from 1.83 to 3.43, while BX's ranged from 1.16 to 2.39. This suggests that XLF provides more favorable returns relative to the risk taken.
- Blackstone, Inc. (BX) has a beta consistently above 1, indicating that it is more volatile than the market. As of Q2 2025, BX's beta is around 1.45 to 1.55, while XLF's beta is around 0.78 to 0.84. This confirms that BX is more sensitive to market movements than XLF.
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Overall Assessment:
- Blackstone, Inc. (BX) has demonstrated periods of strong performance, particularly over the past two years. However, it has also exhibited higher volatility, larger drawdowns, and lower risk-adjusted returns compared to the Financial Select Sector SPDR Fund (XLF). The higher beta of BX indicates that it is more sensitive to market movements, which can lead to greater potential gains but also greater potential losses. The recent underperformance of BX year-to-date suggests that current market conditions may not be as favorable for BX as they are for the broader financial sector represented by XLF. Investors should carefully consider their risk tolerance and investment objectives when evaluating BX, taking into account its higher volatility and potential for significant drawdowns.
Peers Price History(as of 2025-05-16)
- Performance Comparison:
- Blackstone Inc. (BX) has shown mixed performance compared to its peers. Over the past year, BX has underperformed both BlackRock Finance, Inc. (BLK) and KKR Group Co., Inc. (KKR). However, over a 2-year period, BX has outperformed BLK but significantly underperformed KKR. The 3-year performance shows BX underperforming both BLK and KKR. The recent 1-month performance shows BX underperforming KKR but overperforming BLK.
- Risk and Return Analysis:
- The annualized returns show that BX has lower returns than BLK and KKR over 1-year and 3-year periods. Over a 2-year period, BX has a higher annualized return than BLK but a lower return than KKR. The annualized volatility data indicates that BX generally has higher volatility than BLK but lower volatility than KKR. The maximum drawdown for BX was -49.29% on 2022-12-28, which is higher than BLK's -43.9% on 2022-10-12 but similar to KKR's -47.92% on 2022-09-30. This suggests that BX has a moderate risk profile compared to its peers.
- Risk-Adjusted Performance:
- The Sharpe Ratio analysis reveals that KKR generally offers better risk-adjusted returns compared to BX and BLK. BLK often has lower Sharpe ratios, indicating poorer risk-adjusted performance. The Beta value of BX is generally above 1, indicating that it is more volatile than the market. This is consistent with its higher annualized volatility compared to BLK.
- Overall Assessment:
- Blackstone Inc. (BX) presents a mixed profile compared to BlackRock Finance, Inc. (BLK) and KKR Group Co., Inc. (KKR). While BX has shown periods of outperformance, it generally underperforms its peers in terms of annualized returns and risk-adjusted performance. BX has a higher volatility than BLK but lower than KKR, and its maximum drawdown is comparable to KKR. The Sharpe Ratio suggests that KKR offers better risk-adjusted returns. The Beta value indicates that BX is more sensitive to market movements than BLK.
Peers Fundamentals(as of 2025-03-31)
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Market Position and Size:
- Blackstone (BX) leads its peers with a market capitalization of $178,040.95 million, surpassing BlackRock (BLK) at $152,304.65 million and KKR at $111,900.26 million.
- Despite its market-leading size, BX's revenue for the most recent quarter was $12,629.2 million, less than BlackRock's $21,391 million and KKR's $16,480.37 million.
- BX's EBITDA of $6,546.05 million and net income of $2,543.97 million are competitive, exceeding KKR but falling short of BlackRock, indicating efficient operations despite lower revenue.
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Profitability and Efficiency:
- BX demonstrates superior profitability with a Gross Profit Margin of 99.49%, significantly higher than BlackRock's 79.45%, KKR's 44.04%, and the industry average of 74.25%.
- Its EBITDA Margin of 51.83% also outperforms peers and the industry average, showcasing strong operational efficiency.
- BX's Net Profit Margin of 20.14% is competitive, exceeding KKR and the industry average, but lower than BlackRock's.
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Financial Health and Stability:
- BX's Total Debt to Total Equity Ratio is 167.86, higher than BlackRock's 29.68 and the industry average of 117.21, but lower than KKR's 185.62, indicating a reliance on debt financing.
- Its Debt / EBITDA ratio of 1.9 is manageable, exceeding BlackRock but lower than KKR and the industry average.
- BX's Cash Flow / Total Debt of 24.22 is lower than BlackRock and the industry average, but higher than KKR, suggesting moderate cash flow generation relative to debt.
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Valuation and Market Perception:
- BX's Enterprise Value To Sales of 10.28 is higher than BlackRock and the industry average, but lower than KKR, indicating a premium valuation.
- Its Enterprise Value To EBITDA of 19.69 is in line with the industry average but lower than KKR, suggesting a reasonable valuation relative to earnings.
- BX's Price To Earnings ratio of 44.39 is higher than BlackRock and the industry average, but lower than KKR, indicating a higher earnings multiple.
- BX's Price to Book Ratio of 22.47 is significantly higher than its peers and the industry average, suggesting a premium valuation based on book value.
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Cash Flow and Capital Management:
- BX's Net Operating Cash Flow of $2,765.71 million and Free Cash Flow of $2,692.78 million are lower than both BlackRock and KKR, indicating weaker cash flow generation.
- Its Total Capital Expenditure of $72.93 million is also lower than its peers, suggesting a conservative approach to capital investments.
- BX's cash conversion ratio of 0.54 is lower than the industry average, indicating potential inefficiencies in converting revenue to cash.
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Growth and Future Prospect:
- BX's revenue growth has been volatile and generally lower than its peers, indicating potential challenges in expanding its top line.
- Its EBITDA and EBIT Margin growth have been strong, but Net Income, Basic Earnings per Share, Free Cash Flow, and Free Cash Flow Margin growth have been weaker.
- The deceleration in revenue growth coupled with the volatility in earnings and cash flow could be a potential red flag.
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Potential for Investment:
- Blackstone (BX) presents a mixed investment profile. Its high profitability and returns on equity are attractive, but its lower revenue growth and cash flow generation are concerning.
- The high valuation multiples suggest that the market has high expectations for BX's future performance.
- Investors should carefully consider BX's growth prospects and cash flow generation capabilities before making an investment decision.
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Key Risks and Considerations:
- Lower revenue growth compared to peers.
- Weaker cash flow generation relative to its size.
- High debt-to-equity ratio.
- High valuation multiples, suggesting potential overvaluation.
- Volatility in earnings and cash flow.
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Overall Assessment:
- Blackstone (BX) is a market leader with strong profitability and returns on equity, but its revenue growth and cash flow generation are areas of concern.
- Its high debt-to-equity ratio and valuation multiples warrant attention.
- Overall, BX's financial health is solid, but it needs to focus on improving its revenue growth and cash flow to sustain its market position.
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