Blackstone (BX) Stock Looks Fairly Priced Despite A 31% Drop

Blackstone has seen its share price fall sharply over the past year, which puts a spotlight on a different question for you as an investor. Is the current market value still in line with the returns the asset manager earns on the capital it puts to work across credit, private equity and real assets?

• The stock is down 30.8% over the past year, which raises the question of whether that decline now matches the returns Blackstone is generating on its invested capital.
• Recent moves to acquire Flow Control Holdings and recycle capital from Indian real estate may influence future returns by shifting where Blackstone allocates capital and how quickly that capital can be put back to work.
• What if you looked at Blackstone through its earnings instead? See what Blackstone's 28.5x P/E says about the price.

The issue now is whether the price you see on Blackstone today is justified by the returns it earns on its capital.

If you want to pressure test this same question across a broader group of companies, take a look at 29 high quality undervalued stocks to see where the market price and capital returns may line up more closely.

Where Does Blackstone Sit on Excess Returns?

The Excess Returns model looks at how much profit Blackstone generates over and above the cost of its equity capital. For Blackstone, the inputs suggest a business that earns far more on each dollar of equity than it needs to in order to compensate shareholders, with an average return on equity of 44.82% compared with a cost of equity of $0.96 per share.

Book value is modeled at $11.27 per share today and a stable level of $12.00 per share. Stable EPS of $5.38 per share implies excess return of $4.42 per share, based on analyst expectations. Those figures help explain why the Excess Returns estimate comes out broadly in line with the current share price of $125.41. The planned acquisition of Flow Control Holdings, which targets data center liquid cooling, shows Blackstone leaning into areas where management believes high returns on capital can continue, even though the market price already reflects a lot of that strength. Find out what Blackstone could be worth using our Excess Returns estimate.

The Blackstone Narrative: What Would Justify Today's Price?

Simply Wall St Narratives pick up where this valuation puzzle for Blackstone leaves off. They spell out which combinations of future growth, margins and earnings would need to hold for Blackstone's stock to be worth materially more or less than today's market price, using the Community page as home base. Each one sets up a fair value as a clear, testable idea about how the business might evolve so you can track how that view holds up over time.

Community views on Blackstone are split between those who see fresh inflows and AI linked deals as a support and those who worry about execution risk and capital intensity.

Bull case: 13% undervalued

"Blackstone has raised $62 billion of inflows in Q1 2025, marking the highest level in three years, which boosts assets under management (AUM)..."

Discover why this Narrative puts Blackstone at 13% undervalued.

Bear case: 5% overvalued

"Blackstone's move into rapidly evolving and capital-intensive sectors, such as digital infrastructure and data centers, poses a risk of underperformance if technological advances shift quickly..."

Explore why this Narrative puts Blackstone at 5% overvalued.

Before you stop at Blackstone's share price, check who is steering the ship

The next question is who actually runs Blackstone, how their rewards line up with your interests, and whether those incentives fit the risks you are taking. See who runs Blackstone and how they are paid.

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.

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