Blackstone stock has delivered a strong 53.9% gain over the past three years. However, both the intrinsic value estimate from the Excess Returns model and the market multiple checks currently point to the shares trading at a premium rather than as a clear bargain.

• Over the last three years Blackstone has returned 53.9%, which puts recent share price weakness over the past year into the context of a longer run of strong gains.
• New capital commitments and deals such as AI infrastructure exposure through Firmus and credit and energy transition investments can support longer term fee and earnings potential. At the same time, execution and regulatory risk around transactions and private credit conditions may weigh on how much investors are willing to pay for that growth.
• With a valuation score of 2 out of 6, Blackstone screens as leaning expensive rather than as an across the board value opportunity on the broader checks.

For investors, the debate is whether the premium to the intrinsic value estimate is justified by Blackstone's growth opportunities and deal pipeline or leaves limited room for disappointment.

Has Blackstone Run Too Far on Excess Returns?

The Excess Returns model estimates Blackstone's worth by comparing what it earns on shareholder equity to the return investors require, then projecting that gap forward. For Blackstone, the inputs are robust. Book value is $11.27 per share and stable EPS is $5.39 per share, based on forward return on equity estimates from 7 analysts. With an average return on equity of 44.94% and a cost of equity of $0.95 per share, the model calculates an excess return of $4.44 per share on a stable book value of $12.00 per share.

On these assumptions, the Excess Returns model points to an intrinsic value of $116 per share, which sits below the current share price and implies the stock is about 17.9% overvalued. The recent funding of AI data center group Firmus, where Blackstone vehicles are investors, helps explain why the market is willing to pay a premium for future optionality beyond what the model credits today.

Overall, Blackstone screens as overvalued on the Excess Returns framework, with the share price sitting ahead of the model’s intrinsic value estimate.

Our Excess Returns analysis suggests Blackstone may be overvalued by 17.9%. Discover 52 high quality undervalued stocks or create your own screener to find better value opportunities.

Has Blackstone Run Too Far on Earnings?

The P/E multiple suits Blackstone because earnings are a key driver of how investors judge its fee based and performance fee streams. On this lens, Blackstone trades on about 31.2x earnings, slightly below the Capital Markets industry average of 37.9x and just under the peer group at 32.2x. That leaves it priced at a premium to many traditional financials, but closer to specialist alternative asset managers.

The fair P/E ratio, which adjusts for Blackstone's size, profitability profile and risk, sits lower at about 27.1x. That creates a gap of roughly 4x turns between where the shares trade and where this model suggests they could sit if investors demanded a bit more compensation for risk. Recent headlines around AI data center exposure and energy transition deals help explain why the market is comfortable paying that richer multiple for Blackstone today.

On the P/E checks, Blackstone screens as overvalued because its current earnings multiple sits above the level implied by the tailored fair ratio.

The Blackstone Narrative: What Would Justify Today's Price?

Simply Wall St Narratives for Blackstone pick up where the valuation gap above leaves off and spell out which paths for Blackstone's growth, margins and earnings would need to play out for the stock to be worth materially more or less than today's price. Each one links its number to a clear view about where growth, profitability and key risks could head next, which you can come back to as new information appears.

Community views on Blackstone sit far apart, with some investors focused on capital inflows and others more concerned about execution risk around new areas like AI infrastructure.

Bull case: roughly fairly valued

"Blackstone has raised $62 billion of inflows in Q1 2025, marking the highest level in three years, which boosts assets under management (AUM) and gives the company a strong foundation for future revenue growth…"

Bear case: 15% overvalued

"Blackstone's move into rapidly evolving and capital-intensive sectors, such as digital infrastructure and data centers, poses a risk of underperformance if technological advances shift quickly, resulting in less predictable future revenues and profitability…"

Do you think there's more to the story for Blackstone? Head over to our Community to see what others are saying!

The Bottom Line

Blackstone screens as overvalued on both the Excess Returns intrinsic value estimate and the tailored earnings multiple, so the market already prices in a lot of optimism around its deal pipeline and fee potential. With the broader valuation checks leaning weak, the key question is whether Blackstone can keep justifying that premium as conditions evolve in areas like private credit and AI infrastructure. The crux of the bull versus bear debate is how reliably those newer growth areas translate into durable earnings that support today’s rich valuation.

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.