NASDAQ:STEP: a strong growth stock preparing for the next leg up?.

Last update: Nov 25, 2024

Groth investors are looking for stocks showing high revenue and EPS growth. We will have a look here to see if STEPSTONE GROUP INC-CLASS A (NASDAQ:STEP) is suited for growth investing, while it is forming a base and may be ready to breakout. Investors should of course do their own research, but we spotted STEPSTONE GROUP INC-CLASS A showing up in our growth with base formation screen, so it may be worth spending some more time on it.

Unpacking NASDAQ:STEP's Growth Rating

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:STEP has achieved a 9 out of 10:

The Earnings Per Share has grown by an impressive 58.25% over the past year.
The Revenue has grown by 49.36% in the past year. This is a very strong growth!
STEP shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 22.56% yearly.
Based on estimates for the next years, STEP will show a very strong growth in Earnings Per Share. The EPS will grow by 30.31% on average per year.
STEP is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 21.98% yearly.
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Looking at the Health

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:STEP, the assigned 5 reflects its health status:

STEP has a Altman-Z score of 1.77. This is in the better half of the industry: STEP outperforms 68.66% of its industry peers.
The Debt to FCF ratio of STEP is 1.33, which is an excellent value as it means it would take STEP, only 1.33 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 1.33, STEP belongs to the best of the industry, outperforming 85.25% of the companies in the same industry.
A Debt/Equity ratio of 0.43 indicates that STEP is not too dependend on debt financing.
The Debt to Equity ratio of STEP (0.43) is better than 74.19% of its industry peers.

Looking at the Profitability

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:STEP was assigned a score of 5 for profitability:

With a decent Return On Invested Capital value of 6.20%, STEP is doing good in the industry, outperforming 71.89% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for STEP is above the industry average of 6.97%.
STEP has a better Gross Margin (93.01%) than 92.17% of its industry peers.
In the last couple of years the Gross Margin of STEP has grown nicely.

How do we evaluate the setup for NASDAQ:STEP?

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NASDAQ:STEP this score is currently 8:

STEP has an excellent technical rating and also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is very little resistance above the current price. We notice that large players showed an interest for STEP in the last couple of days, which is a good sign.

Every day, new Strong Growth stocks can be found on ChartMill in our Strong Growth screener.

Check the latest full fundamental report of STEP for a complete fundamental analysis.

For an up to date full technical analysis you can check the technical report of STEP

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.