Blackstone (BX)

Alternative investment manager Blackstone (NYSE:BX) missed Wall Street’s revenue expectations in Q3 CY2025, but sales rose 26.6% year on year to $3.09 billion. Its GAAP profit of $0.80 per share was 34.8% below analysts’ consensus estimates.

Company Overview

With over $1 trillion in assets under management and investments spanning real estate, private equity, credit, and hedge funds, Blackstone (NYSE:BX) is a global alternative asset manager that invests capital on behalf of pension funds, sovereign wealth funds, and other institutional investors.

Asset management firms oversee investment portfolios for institutions and individuals. The industry benefits from the growing global wealth pool, retirement savings needs, and expansion into alternative investments (private equity, real estate, etc.). However, firms face significant pressure from the shift to lower-cost passive investment products, regulatory requirements for fee transparency, and increasing technology costs to stay competitive in portfolio management and client service.

Blackstone's main competitors include other alternative asset managers such as Apollo Global Management (NYSE:APO), KKR & Co. (NYSE:KKR), The Carlyle Group (NASDAQ:CG), and Brookfield Asset Management (NYSE:BAM), as well as traditional asset managers that have expanded into alternative investments.

A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Blackstone grew its revenue at an excellent 18.7% compounded annual growth rate. Its growth beat the average financials company and shows its offerings resonate with customers, a helpful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Blackstone’s annualized revenue growth of 17.4% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Blackstone generated an excellent 26.6% year-on-year revenue growth rate, but its $3.09 billion of revenue fell short of Wall Street’s high expectations.

Assets Under Management (AUM) is the cornerstone of a financial firm's investment division, representing all client capital under its stewardship. Management fees on this AUM create reliable, recurring revenue that maintains stability even when investment performance struggles, though prolonged poor returns can eventually affect asset retention and growth.

Blackstone’s AUM has grown at an annual rate of 15.3% over the last four years, better than the broader financials industry. When analyzing Blackstone’s AUM over the last two years, we can see that growth decelerated to 9.3% annually. Fundraising or short-term investment performance were net detractors to the company over this shorter period since assets grew slower than total revenue. Keep in mind that asset growth can be erratic and seasonal, so we don't rely on it too heavily for our business quality analysis.

In Q3, Blackstone’s AUM was $1.24 trillion, meeting analysts’ expectations. This print was 12.1% higher than the same quarter last year.

Assessing topline trends is important, but the profitability of this growth matters for the bottom line. For asset managers, we look at fee-related earnings, which is profits generated from the core fee-based business, excluding more volatile components like performance fees (carry) and investment income. This is essentially the recurring profits of the business.

Blackstone’s annual fee-related earnings growth over the last five years was 24.4%, a top-notch result.

As you’ve seen throughout this report, we supplement with a two-year look because a five-year view may miss recent changes in the business. Over the last two years, Blackstone’s fee-related earnings grew at an annualized pace of 21.7%, an exceptional result.

Blackstone’s fee-related earnings came in at $1.92 billion this quarter, beating analysts’ expectations by 33%. These results represent 63.4% year-on-year growth.

When analyzing asset managers, we focus on ANI per share, which is essentially the same as the adjusted EPS calculations used throughout the broader market.

ANI per share allows us to determine whether growth was profitable, excluding unrealized investment gains and losses as well as non-recurring items like deal-related expenses. It also factors in share issuance or buybacks, too, which is informative because shareholders own shares, not the entire company.

Blackstone’s 19.7% annualized ANI per share growth over the past five years was remarkable but underperformed its 22.7% fee-related earnings growth. It also diluted shareholders across this stretch, a headwind for its results.

On a two-year basis, Blackstone’s annualized ANI per share growth decelerated to 18.7%. Still, this performance was great and better than its fee-related earnings over the same period. We note the company continued diluting shareholders during this timeframe, suppressing its ANI per share.

In Q3, Blackstone reported ANI per share of $1.52, up from $1.01 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results.

You may wonder when we will analyze book value and return on equity (ROE) since Blackstone is a financials company. We pay less attention to these metrics for asset managers because they are not great measures of business quality.

Asset managers are fee-based, capital light firms that manage client capital rather than their own, so they are not balance sheet businesses. Additionally, book value fails to capture the value of brands, investment track records, and other intangibles, thus understating intrinsic value, while ROE can look artificially high due to the relatively smaller bases of equity capital needed to operate the business compared to banks and insurers.

Blackstone reported $2.43 billion of cash and $12.89 billion of debt on its balance sheet in the most recent quarter.

As investors in high-quality companies, we primarily focus on whether a company’s profits can support its debt.

With $6.48 billion of fee-related earnings over the last 12 months, we view Blackstone’s 1.6× net-debt-to-earnings ratio as safe. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

We were impressed by how significantly Blackstone blew past analysts’ fee-related earnings expectations this quarter. On the other hand, its EPS missed and its revenue fell slightly short of Wall Street’s estimates. Overall, this was a mixed quarter. The stock remained flat at $160.30 immediately after reporting.

Updated: December 4, 2025 at 11:46 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in Blackstone.

There are several reasons why we think Blackstone is a great business. For starters, its revenue growth was impressive over the last five years. On top of that, its remarkable EPS growth over the last five years shows its profits are trickling down to shareholders, and its expanding fee-related earnings shows the asset management business is generating more profits.

Blackstone’s P/E ratio based on the next 12 months is 24.6x. There’s some optimism reflected in this multiple, but we don’t mind owning a high-quality business, even if it’s slightly expensive. Investments like this should be held patiently for at least three to five years as they benefit from the power of long-term compounding, which more than makes up for any short-term price volatility that comes with relatively high valuations.

Wall Street analysts have a consensus one-year price target of $180.69 on the company (compared to the current share price of $151.47).