StepStone (STEP) is poised for a significant increase in earnings power, with adjusted EPS expected to grow about 25% annually, driven by accretive buy-ins, fundraising and fee-related earnings margin expansion, RBC said in a note Wednesday.

According to the note, StepStone's private wealth platform has grown net asset value about five-fold to more than $20 billion in two years, with quarterly flows above $2 billion, while strong platform performance and new distribution initiatives support further growth.

RBC expects a commingled-fund fundraising cycle to drive a favorable mix shift, with fee-related earnings revenue forecast to grow 24% annually over two years and the FRE margin reaching 40% by fiscal 2028.

The analysts identified StepStone's planned private wealth buy-in as a key earnings catalyst, estimating it could lift ANI per share by about 15% and materially reduce noncontrolling interests, supporting 2028 earnings growth, the note said.

RBC initiated coverage with an outperform rating on the stock and a price target of $65.

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