Should You Invest in Blackstone Despite Its Premium Valuation?

Core Viewpoint - Blackstone Inc. (BX) stock is currently trading at a premium compared to the industry average, with a forward 12-month price/earnings (P/E) ratio of 30.30, exceeding the industry average of 25.69, indicating potential overvaluation [1][2][5] Valuation Comparison - BX's P/E ratio is significantly higher than its closest peers, Apollo Global Management, Inc. (APO) at 15.73 and The Carlyle Group Inc. (CG) at 14.42, suggesting that BX may be relatively overvalued [2][5] Growth Factors - Blackstone's total Assets Under Management (AUM) reached $1.21 trillion as of June 30, 2025, driven by strong capital inflows and strategic investments in private credit and high-growth sectors [9][10][11] - The company has seen a compound annual growth rate (CAGR) of 16.2% in total AUM and 15.3% in fee-earning AUM over the past four years [10] - Blackstone's focus on private credit and investments in sectors like digital infrastructure, AI, and life sciences are expected to support continued AUM growth [12][13] Fundraising and Capital Deployment - Despite a challenging fundraising environment, Blackstone has raised significant capital, with $181.2 billion available as of June 30, 2025, allowing for opportunistic investments [14] - The company deployed $133.9 billion in 2024 and $69.5 billion in the first half of 2025, positioning itself well to capitalize on market dislocations [15] Strategic Alliances - Blackstone formed an alliance with Wellington and Vanguard to develop multi-asset investment solutions, aiming to enhance investor access to institutional-quality portfolios [16] Price Performance - Over the past three months, BX shares have increased by 33.6%, outperforming the industry and the S&P 500 Index, although it lagged behind Carlyle Group's 42.3% gain [17] Earnings Estimates - Analysts have revised earnings estimates upward for 2025 and 2026, indicating expected year-over-year growth rates of 7.8% and 29.9%, respectively [20] Long-term Outlook - Blackstone is positioned for long-term growth due to high inflows and substantial capital for investments, although its premium valuation raises concerns for more conservative investors [19][23]