Blue Owl Capital (OWL) has been in focus after reporting a 15% rise in assets under management to US$314.9b and 14% fee-related earnings growth, alongside opening a new regional headquarters in Abu Dhabi.

The share price has inched higher recently, with a 7 day share price return of 2.02% and a 90 day share price return of 5.03%. However, the year to date share price return is down 37.23% and the 1 year total shareholder return is down 45.47%, suggesting that sentiment is still recovering as investors weigh growth in assets under management, the Abu Dhabi expansion and the recent credit rating upgrade against concerns around private credit and fund withdrawal caps.

If Blue Owl’s moves in private markets have your attention, it can be useful to see what other alternative asset managers and financial groups are doing. A starting point is a curated list of 20 top founder-led companies

With Blue Owl growing fee-related earnings and assets under management while the share price is still down sharply over the past year, the key question is whether investors are seeing an overlooked opportunity or whether the stock already reflects future growth.

Most Popular Narrative: 36% Undervalued

Analysts in the most followed narrative see fair value for Blue Owl Capital around $14.93 per share versus the last close of $9.61, framing the recent share price weakness against their longer term earnings view.

Significant ongoing growth in permanent capital vehicles, particularly through expansion in private credit, real assets, and evergreen or interval fund strategies, is providing stable and recurring management fee revenue and positioning Blue Owl for higher future earnings and durable margin expansion. Structural shifts away from traditional bank lending toward private lenders, combined with robust demand for alternative credit and asset backed finance, are enabling large pipeline growth and high deployment opportunities, directly supporting future AUM growth and upward trajectory in revenues.

Want to see how this earnings story gets to that higher fair value? The narrative leans heavily on compounding fee income, rising margins and a tight discount rate. Curious which revenue and profit assumptions sit underneath that and how they link to the long term return outlook?

Result: Fair Value of $14.93 (UNDERVALUED)

However, that fair value story runs into trouble if weaker retail private credit flows and ongoing redemption pressures persist, or if acquisition integration costs hit margins harder than expected.

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Another View: Cash Flows Paint a Tougher Picture

Analyst targets suggest Blue Owl Capital could be undervalued, but our DCF model points the other way, with an estimated future cash flow value of about $1.07 per share versus the current $9.61. That gap implies investors are paying a high price for cash flows, so which signal matters more for you?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Blue Owl Capital 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 47 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

Feeling torn between the optimism and the pushback in this story? Consider taking action sooner rather than later by weighing both sides, starting with the 1 key reward and 3 important warning signs.

Looking for more investment ideas?

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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.