- STEP is an investment firm offering private markets portfolios and a proprietary database with information about private equity, infrastructure, private debt, and real estate asset classes.
- I believe that STEP will successfully use the know-how accumulated in the United States to operate in new markets.
- Notice that STEP commenced offering its database or SPI very recently. I believe that it could represent a relevant source of revenue in the coming years.
- With new M&A transactions, in the next five years, I believe that STEP can easily report sales growth of 19%. I would also be expecting an increase in the free cash flow margin once the cost synergies are included. With this in mind, I assumed FCF/Sales of 22%.
- I developed a financial model with a WACC of 4%, FCF/Sales of 22%, and 19% sales growth. The implied fair value is equal to $63, which implies significant upside potential in STEP’s valuation.
For further details see:
StepStone's Private Investments Are Worth Much More