• If you are wondering whether Blackstone's current share price reflects its true worth, you are not alone. The stock has drawn attention from investors trying to work out if it still offers value after recent moves.
• The share price closed at US$131.39, with a 1.8% decline over the last 7 days, a 19.6% decline over the last 30 days, a 17.3% decline year to date and an 18.5% decline over the last year, while the 3 year and 5 year returns sit at 58.9% and 124.9% respectively.
• These mixed return figures have kept Blackstone on many watchlists, as investors weigh up long term gains against more recent weakness. Recent coverage has focused on its role as a large alternative asset manager, its capital raising and deployment activity across private markets, and how these trends might influence sentiment toward the stock.
• Simply Wall St currently gives Blackstone a valuation score of 2 out of 6, which suggests only some of the standard valuation checks point to the shares looking undervalued. Next we will walk through what different valuation approaches say about Blackstone today and later on look at a richer way to think about valuation beyond the usual multiples and models.

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 Blackstone is expected to generate over and above the return that shareholders require, and then converts those excess profits into an estimated value per share.

For Blackstone, the model uses a Book Value of $11.06 per share and a Stable EPS of $6.03 per share, based on weighted future Return on Equity estimates from 7 analysts. The Average Return on Equity input is 49.48%, compared with a Cost of Equity of $0.98 per share. That gap produces an Excess Return of $5.05 per share, which is the core engine of this valuation. The Stable Book Value used is $12.19 per share, sourced from weighted future Book Value estimates from 3 analysts.

Putting these pieces together, the Excess Returns model arrives at an intrinsic value of about $121.80 per share. Versus the recent share price of $131.39, this implies the stock is roughly 7.9% overvalued, so only modestly above the model’s estimate of fair value.

Result: ABOUT RIGHT

Blackstone is fairly valued according to our Excess Returns, but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Approach 2: Blackstone Price vs Earnings

P/E is a common way to look at profitable companies because it links what you pay directly to the earnings the business is already generating. A higher P/E usually reflects stronger growth expectations or lower perceived risk, while a lower P/E can point to more muted growth expectations or higher perceived risk.

Blackstone currently trades on a P/E of 34.1x. That sits above the Capital Markets industry average P/E of 23.1x and just below the peer group average of 35.4x. On the surface, that suggests the market is pricing Blackstone at a premium to the broader industry but roughly in line with closer peers.

Simply Wall St’s Fair Ratio for Blackstone is 24.2x. This is a proprietary estimate of what a “normal” P/E might look like for the company given factors such as its earnings growth profile, industry, profit margins, market cap and identified risks. Because it is tailored to the company, the Fair Ratio can be more informative than a simple comparison with industry or peer averages that do not adjust for these differences. Comparing the current P/E of 34.1x with the Fair Ratio of 24.2x suggests the shares are trading above this modelled range.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Blackstone Narrative

Earlier we mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St let you attach a clear story about Blackstone to the numbers by linking your view of its future revenue, earnings and margins to a forecast and a fair value. You can then compare that fair value to the current price on the Community page that millions of investors use. The tools update as fresh news or earnings arrive. Different Narratives, such as a more bullish view with a fair value of US$193.17 and a more cautious view at US$124.55 or US$156.00, show you in a simple side by side way how different assumptions lead to very different conclusions about what the shares might be worth and whether that lines up with your own decision to act or wait.

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.