It has been about a month since the last earnings report for Blackstone Group (BX). Shares have lost about 11.9% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Blackstone Q4 Earnings Beat Estimates, Revenues Up Y/Y
Blackstone’s fourth-quarter 2019 distributable earnings of 72 cents per share surpassed the Zacks Consensus Estimate of 68 cents. Moreover, the figure reflects an increase of 26.3% from the prior-year quarter.
Results benefited from growth in revenues and assets under management (AUM). However, higher expenses hurt results to some extent.
Net income attributable to Blackstone was $483.1 million against net loss of $10.9 million recorded in the year-ago quarter.
For 2019, distributable earnings of $2.31 per share surpassed the Zacks Consensus Estimate of $2.26. Moreover, the figure reflects rise of 6.5% from the prior year. Net income attributable to Blackstone was $2.05 billion, up from $1.54 billion a year ago.
Revenues & AUM Improve, Expenses Rise
Total segment revenues for the reported quarter were $1.79 billion, up 30.5% year over year. The top line surpassed the Zacks Consensus Estimate of $1.60 billion. Total revenues (GAAP basis) increased significantly year over year to $2.09 billion.
Total segment revenues for 2019 were $5.58 billion, up 7.2% year over year. The top line surpassed the Zacks Consensus Estimate of $5.37 billion.
Total quarterly expenses (GAAP basis) increased significantly year over year to $1.11 billion due to a rise in all expense components.
Fee-earning AUM grew 19.1% year over year to $408.07 billion. Total AUM amounted to $571.12 billion as of Dec 31, 2019, up 20.9% year over year. The rise in total AUM was largely driven by $26 billion of inflows.
As of Dec 31, 2019, Blackstone had $5.3 billion in total cash, cash equivalents and corporate treasury investments, and $11.5 billion in cash and net investments.
Share Repurchase Update
The company repurchased 1.5 million shares in the reported quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -8.52% due to these changes.
At this time, Blackstone Group has a great Growth Score of A, though it is lagging a bit on the Momentum Score front 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 B. 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.
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