Blackstone stock has delivered a strong 57.4% gain over the past three years, yet the current checks suggest investors are paying a premium to the latest intrinsic value estimate and to traditional valuation multiples.

• Over the past three years, Blackstone has returned 57.4%, which puts extra focus on whether that share price performance is still supported by fundamentals.
• Recent activity around AI data center investments and the extended TXNM Energy merger process can influence expectations for future cash flows, while any further strain on capital or deal timing may weigh on how much investors are willing to pay today.
• On Simply Wall St's broader valuation checks, Blackstone scores 2 out of 6, which appears expensive rather than a clear bargain.

The issue now is whether Blackstone's current price already reflects these cash flow expectations, leaving limited room for a further rerating.

Is Blackstone Getting Expensive on Excess Returns?

The Excess Returns model evaluates how much profit Blackstone earns on its equity above its estimated cost of capital. For Blackstone, the inputs indicate a company generating sizeable surplus value on each dollar of book equity, with Book Value at $11.27 per share and Stable EPS at $5.39 per share. The model uses a Cost of Equity of $0.96 per share, which implies an Excess Return of $4.43 per share and an Average Return on Equity of 44.94%. Stable Book Value is set at $12.00 per share based on analyst estimates.

These assumptions lead to an estimated intrinsic value of $115 per share, which is below the current share price. On this measure, the stock screens as overvalued. The reconsidered $3 billion stakes-for-cash deal, reportedly linked to valuation and cash needs, aligns with a picture of management weighing capital allocation carefully, even as the market prices Blackstone ahead of the Excess Returns estimate.

Overall, Blackstone stock appears overvalued on the Excess Returns model, given that the current share price sits above the $115 intrinsic value estimate.

Our Excess Returns analysis suggests Blackstone may be overvalued by 22.0%. Discover 50 high quality undervalued stocks or create your own screener to find better value opportunities.

Does Blackstone Look Pricey on Earnings?

P/E is usually the cleanest way to compare Blackstone to other capital markets stocks, since earnings remain a key yardstick for fee based businesses. Blackstone trades on a P/E of about 32.0x, which is slightly below the peer average of 33.4x and below the wider capital markets industry average of 38.2x.

The fair P/E ratio from the model is 27.3x, which is lower than where Blackstone trades today. That gap suggests investors are paying more than the model implies for Blackstone's current earnings profile and risk mix, even if the premium to peers is not large. The reported rethink of the recent stakes for cash deal due to valuation and cash considerations also underlines that pricing is front of mind for both management and the market.

On the P/E multiple, Blackstone stock appears overvalued compared with the model's fair ratio, even though it is not far from peer levels.

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

Simply Wall St Narratives for Blackstone pick up where this valuation puzzle leaves off by spelling out which assumptions about Blackstone's future growth, margins and earnings would need to hold for the stock to be worth materially more or less than today's price on the market. Each Narrative sets out fair value as a thesis about the business that you can revisit over time, and they sit on Simply Wall St's Community page for ongoing reference.

Community narratives on Blackstone are pulling in very different directions, which gives you two sharply contrasted scenarios to weigh up.

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: 18% 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

For Blackstone, both the Excess Returns intrinsic value estimate and the P/E multiple work in the same direction. They each point to the stock looking overvalued rather than mispriced in your favour. Broader valuation checks are also weak, which reinforces the idea that you are paying up for the current cash flow profile and fee potential. The key question from here is whether Blackstone can sustain the growth and capital deployment needed to justify that premium, especially across capital intensive areas such as data centers and other newer platforms.

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.