• If you are wondering whether Blackstone's current share price reflects its true worth, you are not alone. Many investors are asking the same question right now.
• The stock last closed at US$110.43, with returns of 3.4% over 7 days, a 16.9% decline over 30 days, a 30.5% decline year to date and a 23.0% decline over 1 year, while the 3 year and 5 year returns stand at 44.4% and 76.2% respectively.
• Recent price moves sit against a backdrop of ongoing attention on large alternative asset managers and how they are positioned in credit, real estate and private equity. News coverage has focused on how firms like Blackstone are handling capital deployment, fundraising conditions and transaction activity, which all feed into how investors think about risk and future cash flows.
• On Simply Wall St's 6 point valuation checklist, Blackstone currently scores 2 out of 6. Next up is a closer look at how different valuation methods stack up for this stock and why an even richer way to think about value sits at the end of this article.

Blackstone scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Blackstone Excess Returns Analysis

The Excess Returns model looks at how much profit a company is expected to earn above the return required by shareholders, based on its equity base. Instead of focusing on cash flows, it concentrates on what the business can earn on its book value over time.

For Blackstone, the model uses a Book Value of US$11.06 per share and a Stable EPS of US$6.15 per share, sourced from weighted future Return on Equity estimates from 5 analysts. The Average Return on Equity is 50.48%, which is compared with a Cost of Equity of US$0.97 per share. This leads to an estimated Excess Return of US$5.18 per share.

The analysis also uses a Stable Book Value of US$12.19 per share, based on weighted future Book Value estimates from 3 analysts, to estimate how these excess returns may compound. On this basis, the Excess Returns model produces an intrinsic value of about US$125.05 per share.

Against the recent share price of US$110.43, this implies the stock is around 11.7% undervalued using this method.

Result: UNDERVALUED

Our Excess Returns analysis suggests Blackstone is undervalued by 11.7%. Track this in your watchlist or portfolio, or discover 52 more high quality undervalued stocks.

Approach 2: Blackstone Price vs Earnings

For profitable companies like Blackstone, the P/E ratio is a useful yardstick because it links what you pay directly to the earnings the business is generating today. It also captures, in a simple figure, how the market is weighing both growth expectations and risk, since higher expected growth or lower perceived risk often coincide with a higher “normal” P/E, and the reverse is also true.

Blackstone currently trades on a P/E of 28.65x. That sits close to the Capital Markets industry average P/E of 27.17x and above the peer group average of 22.45x. Simply comparing those numbers can be helpful, but it does not adjust for company specific features such as earnings growth profile, profitability, business mix or size.

To add that context, Simply Wall St calculates a “Fair Ratio” of 23.47x for Blackstone. This proprietary metric estimates what a reasonable P/E might be after considering factors such as earnings growth, profit margins, industry, market cap and key risks. Because it incorporates these elements directly, it can offer a more tailored reference point than a simple comparison with peers or the broad industry. With the current P/E of 28.65x above the Fair Ratio of 23.47x, the stock screens as trading richer than this customised benchmark.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Blackstone Narrative

Earlier it was mentioned that there is an even better way to think about valuation. This is where Narratives come in, a simple way for you to attach a clear story about Blackstone to specific assumptions for revenue, earnings, margins and fair value, then compare that fair value with the current price to decide whether you see the stock as attractive or expensive.

On Simply Wall St's Community page, Narratives are available as an easy tool used by millions of investors. They allow you to pick or create a view, for example a more optimistic fair value around US$193.17 or a more cautious one near US$124.55, and see the full forecast that sits behind each number rather than looking at the price in isolation.

Because Narratives on the platform refresh when new information appears, such as earnings releases, flows into Blackstone's funds or fresh analyst targets like the US$162.26 fair value update, your chosen story and its fair value stay in sync with the latest data and you can quickly see when your thesis and the market price start to diverge.

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

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.