Examining Blackstone Stock’s 16.6% Drop Amid Market Uncertainty in 2025
Wondering if Blackstone stock is a bargain or overpriced? You are not alone as many investors are trying to make sense of the company’s recent moves and what they mean for value seekers.
Blackstone’s stock price has seen plenty of action lately, climbing 4.5% over the past week but still down 5.8% for the last month and off 16.6% year-to-date. It remains 21.0% lower than a year ago, though its long-term returns are notable with a 179.6% gain over five years.
Several major headlines have circulated, from Blackstone’s involvement in high-profile deals to regulatory updates shaping the broader financial sector. These developments help explain both the excitement and caution among investors as economic uncertainty and shifting market conditions play out.
On our 6-point valuation check, Blackstone scores just 1 out of 6, suggesting there may be better value elsewhere. Let’s break down different valuation methods for Blackstone to see if the numbers tell the full story, or if there’s a smarter way to figure out what the stock is truly worth by the end of this article.
Blackstone scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
The Excess Returns Model estimates the intrinsic value of a stock by considering how much value a company generates over and above its cost of equity. This approach focuses on what the company earns relative to the money invested by shareholders, making it particularly relevant for financial firms like Blackstone.
For Blackstone, the key numbers are as follows. Its current book value stands at $10.72 per share, while the model estimates a stable earnings per share (EPS) of $2.80, based on weighted future Return on Equity (ROE) projections from six analysts. The cost of equity is $0.50 per share, and the resulting excess return is $2.30 per share. Blackstone has an average ROE of 46.20%, with a stable book value forecast at $6.07 per share according to two analyst estimates.
Using these inputs, the Excess Returns Model calculates Blackstone’s estimated intrinsic value at $52.13 per share. This is well below the recent share price, implying the stock is 178.0% overvalued according to this method.
For investors seeking value, this model suggests caution. The numbers indicate that, at current prices, Blackstone is trading at a significant premium to what its long-term return profile justifies.
The Price-to-Earnings (PE) ratio is often the go-to valuation tool for profitable companies like Blackstone. It gives a quick snapshot of how much investors are willing to pay for each dollar of earnings, making it especially useful for established firms with steady profitability.
Growth expectations and risk both play a role in determining what counts as a fair PE ratio. Faster-growing or lower-risk companies typically command a higher multiple, while slower-growth or higher-risk firms trade at lower multiples. Context matters when comparing PE ratios across businesses or industries.
Blackstone currently trades at a PE ratio of 41.9x, notably above the Capital Markets industry average of 23.5x and higher than the average for its peers at 35.9x. Simply Wall St’s proprietary “Fair Ratio”, which factors in Blackstone’s specific earnings growth forecasts, industry position, profit margins, market cap, and any company-specific risks, sits at 25.3x. This nuanced metric is more reliable than merely comparing to the industry or peer group averages because it captures whether the company’s fundamentals truly justify a premium or discount.
When comparing Blackstone’s actual PE ratio to its Fair Ratio, the current multiple is substantially higher. This suggests the stock is trading well above what its risk and growth profile justifies.
Earlier we mentioned there’s an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is your story behind the numbers, a simple and intuitive way to attach your perspective on a company, including your fair value estimate and forecasts for future revenue, earnings, and margins.
Instead of relying on a single valuation method, Narratives let you link Blackstone’s story—such as growth strategies, risks, innovations, or market changes—directly to a financial forecast and a clear, actionable fair value. This approach puts you in control, making it easier to see not just what the numbers say, but why they say it.
On Simply Wall St’s Community page, you can quickly create or follow Narratives, already used by millions of investors. Narratives get updated in real time to reflect breaking news, earnings results, or market shifts, helping you spot when the Fair Value diverges from the current Price so you can decide when to buy or sell.
For Blackstone, for example, the most bullish Narrative sees a fair value as high as $202 based on rapid growth and margin improvement, while the most bearish expects just $124, citing operational risks and industry uncertainty. This is a clear demonstration of how different stories lead to different investment decisions.
For Blackstone, here are previews of two leading Blackstone Narratives:
🐂 Blackstone Bull Case
Fair Value: $179.78
Current price is 19.4% below narrative fair value
Expected Revenue Growth Rate: 19.7%
Blackstone is positioned for robust long-term growth, supported by high inflows and ample capital available for opportunistic investments in undervalued assets.
Strategic partnerships in private credit and wealth management, along with innovation in investment channels, are anticipated to expand revenue and increase margins.
The consensus price target is based on expectations for revenue to reach $21.5 billion and earnings of $10.5 billion by 2028, with analysts viewing the current price as fair in relation to projected growth and risks.
🐻 Blackstone Bear Case
Fair Value: $124.55
Current price is 16.3% above narrative fair value
Expected Revenue Growth Rate: 15.9%
Rapid growth in infrastructure and private wealth could create operational inefficiencies and affect future earnings.
Significant reliance on large deployments and quickly changing sectors such as digital infrastructure introduces risk to both revenue and profit stability.
The most bearish analysts expect future profits but consider current market expectations too high, estimating a narrative fair value well below the current share price.
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.
