StepStone Group (STEP) is back in focus after reporting first quarter results for the period ended June 30, 2026. The company posted higher revenue alongside a wider net loss that may raise fresh questions for investors.

Despite the wider loss in the latest quarter, StepStone Group’s share price has risen 10.86% over the past month, although the share price is still down 27.52% year to date and the 1 year total shareholder return is down 16.18%, while the 3 year total shareholder return of 80.29% points to a much stronger longer term record.

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So is the recent rebound in StepStone Group a sign that investors are looking through the wider loss to the underlying business, or just a short term swing in sentiment that leaves the valuation exposed to disappointment next?

Preferred Price-to-Sales Multiple of 2x for StepStone Group: Is it justified?

Valuation is back in focus after StepStone Group reported a wider loss alongside higher revenue. The stock closed at $48.28, and the key question now is whether the current pricing lines up with the revenue it generates.

For StepStone Group, the preferred yardstick is the price-to-sales ratio, or P/S. The company trades on a P/S of 2x, which sits below both the peer group average of 4.8x and the broader US Capital Markets industry average of 3.5x, based on the data provided. P/S compares the market value of the company to its annual revenue and is often used for businesses that are unprofitable, where earnings-based multiples are less informative.

However, the picture is not one sided. While the stock screens as good value versus peers on P/S, the estimated fair P/S ratio for StepStone Group is 0.9x. That suggests the current 2x multiple is more than double the level the fair ratio model points to as a potential anchor. At the same time, the company is currently unprofitable, with a reported net loss of $613.2m and a negative return on equity, and its dividend yield of 3.87% is not well covered by earnings or free cash flows according to the data. Those factors can reasonably justify investor caution about paying a premium to an internally estimated fair ratio, even if the stock looks cheap compared to other capital markets companies.

Compared with its industry, StepStone Group trades on a lower P/S multiple than both direct peers and the wider US Capital Markets group, which may indicate the market is applying a discount relative to other listed managers. Yet against the estimated fair P/S of 0.9x, the current 2x ratio implies investors are still paying a materially higher multiple than that model suggests could be sustainable over time. That contrast between peer-based and fair-ratio-based comparisons is important context for anyone weighing the recent rebound in the share price against the risk of further disappointment.

Result: Price-to-Sales of 2x (OVERVALUED)

However, StepStone Group still faces risks from its continued net loss of $613.2m and a dividend that the data suggests is not well covered by cash flows.

Next Steps

If this mix of caution and opportunity around StepStone Group leaves you unsure, act now by reviewing the key risk factors yourself and weighing them against your expectations with the 2 important warning signs

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.