BlackRock (BLK) stock is back in focus after the U.S. Department of Justice and the SEC opened investigations into valuation practices at its TCP Capital Corp private credit fund, increasing attention on potential legal and operational risks.

The investigation headlines have arrived after a choppy stretch for the stock, with a 7 day share price return that declined 3.65% and a 90 day share price return that declined 2.73%. This comes even though the 1 year total shareholder return is 11.94% and the 3 year total shareholder return is 72.84%. This suggests longer term holders have still seen meaningful gains while near term momentum has softened around US$1,063.75.

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With BlackRock trading around US$1,063.75 after recent regulatory headlines, investors are left to judge whether the current valuation already reflects these risks and the company’s growth projects, or whether the stock still offers mispriced future growth potential.

Most Popular Narrative: 19.3% Undervalued

According to the most followed narrative on BlackRock, the fair value sits at $1,318.96, well above the last close of $1,063.75, which frames the current debate around the stock.

BlackRock has evolved from “an indexed asset manager” into a global platform spanning technology, public markets, and private markets, with a more recurring earnings profile and increasing relevance as financial infrastructure.

Want to see what is behind that platform label and the fair value attached to it? The narrative leans heavily on higher margin tech and private markets, recurring revenues, and a different earnings mix than a typical asset manager.

Result: Fair Value of $1,318.96 (UNDERVALUED)

However, this hinges on two major factors: the regulatory probes into valuation practices and whether higher margin tech and private markets continue to attract flows as expected.

Another View: DCF Paints a Different Picture

While the community narrative points to a fair value of $1,318.96 and sees BlackRock as 19.3% undervalued, the SWS DCF model lands almost flat, with a future cash flow value of $1,053.26 versus a share price of $1,063.75, suggesting the stock may be slightly overvalued instead.

When one approach highlights upside and another is close to fully priced, it raises a simple question for you as an investor: which set of assumptions around growth, margins, and risk feels more realistic in light of the current regulatory spotlight and business mix shift?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out BlackRock for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 53 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

If this mix of regulatory questions and valuation debate leaves you unsure, take time to review the facts yourself and consider both sides through 2 key rewards and 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.