Blue Owl Capital (OWL) AI Stock Analysis

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Blue Owl Capital

(NYSE:OWL)

69Neutral

Blue Owl Capital is positioned strongly with robust financial performance and positive earnings call sentiment. The company's notable revenue growth and robust cash flows highlight its operational strength. However, the high P/E ratio suggests valuation concerns, and technical analysis indicates potential short-term volatility. Despite these factors, the company's strategic direction and resilience provide a balanced outlook.

Positive Factors

Earnings Growth

Management emphasized that growth will be well in excess of 20%, and it is very comfortable it can exceed these expectations.

Growth Opportunities

OWL's exposure to this attractive part of the market will serve as a meaningful driver of growth, enhancing the firm’s footprint in existing fundraising channels, and potentially expanding growth opportunities in Wealth, Insurance and outside the US.

Valuation

Analyst maintains Buy rating on OWL due to bullish views on long-term EPS growth trajectory and potential for valuation expansion.

Negative Factors

Mergers and Acquisitions

Potential headwind for OWL includes mergers and acquisitions which may bring lower margins in acquired companies.

Real Estate Performance

Despite slower industrywide M&A activity, credit deployment was healthy, but Real Estate performance was more muted, totaling ~0%.

Blue Owl Capital (OWL) vs. S&P 500 (SPY)

Market Cap

$27.52B

Dividend Yield3.9%

Average Volume (3M)10.33M

Price to Earnings (P/E)185.9

Beta (1Y)1.73

Revenue Growth32.99%

EPS Growth8.06%

CountryUS

Employees1,200

SectorFinancial

Sector Strength87

IndustryAsset Management

Share Statistics

EPS (TTM)0.17

Shares Outstanding625,652,400

10 Day Avg. Volume8,854,086

30 Day Avg. Volume10,332,084

Financial Highlights & Ratios

PEG Ratio-6.54

Price to Book (P/B)4.85

Price to Sales (P/S)0.00

P/FCF Ratio31.04

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$22.83

Price Target Upside23.54% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering13

Blue Owl Capital Business Overview & Revenue Model

Company DescriptionBlue Owl Capital Inc. (OWL) is a leading alternative asset manager that provides flexible, creative capital solutions to middle-market companies. The firm operates across three main sectors: Direct Lending, GP Capital Solutions, and Real Estate. Blue Owl's strategies are designed to meet the needs of its investors and portfolio companies by offering a range of products and services, including credit, equity, and hybrid solutions.

How the Company Makes MoneyBlue Owl Capital makes money primarily through management fees and performance-based incentives. In their Direct Lending segment, the company earns revenue by providing loans to middle-market companies and collecting interest payments and fees on these loans. The GP Capital Solutions segment generates income by offering capital solutions to private equity firms, earning fees for the management of capital commitments and potential carried interest based on the performance of these investments. In the Real Estate segment, Blue Owl earns revenue from managing real estate assets and receiving fees associated with these assets. The company's earnings are also enhanced by their strategic partnerships and investor relationships, which contribute to fundraising and asset management growth.

Blue Owl Capital Financial Statement Overview

Summary

Blue Owl Capital exhibits strong revenue growth and profitability with efficient operational margins. The company's balance sheet is stable with manageable debt levels, though there is potential to improve returns on equity. Cash flows are robust, underscoring effective cash generation and financial health, despite a slight decline in free cash flow growth. Overall, the financial statements reflect a solid financial position with opportunities for further profitability enhancements.

Income Statement

Very Positive

Blue Owl Capital has shown significant revenue growth, with a revenue increase from $1.36 billion in 2022 to $2.47 billion in TTM (Trailing-Twelve-Months). Its gross profit margin improved to 51.0% in TTM, indicating strong cost management. The net profit margin at 4.9% shows profitability, although it could be improved further. The EBIT margin of 18.5% and EBITDA margin of 26.9% are solid, reflecting good operational efficiency.

Balance Sheet

Positive

The balance sheet reveals a manageable debt-to-equity ratio of 0.18 in TTM, suggesting low leverage risk. The equity ratio stands at 19.0%, indicating a moderate level of financial stability. However, the return on equity (ROE) of 5.2% could be more robust, reflecting room for improvement in generating returns on equity.

Cash Flow

Positive

The cash flow statement shows strong operating cash flow of $969.9 million in TTM, with a high operating cash flow to net income ratio of 8.0, indicating efficient cash generation. The free cash flow to net income ratio is an impressive 7.4, demonstrating robust cash flow relative to earnings. However, the free cash flow growth rate has slightly declined, suggesting a need for consistent cash flow improvement.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.47B	2.30B	1.73B	1.37B	823.88M	249.81M
	Gross Profit
1.26B	1.02B	860.97M	475.04M	-673.11M	9.08M
	EBIT
455.46M	606.76M	317.82M	-2.48M	-927.27M	-58.73M
	EBITDA
662.07M	866.04M	632.65M	269.67M	-1.73B	-58.05M
	Net Income Common Stockholders
121.16M	109.58M	54.34M	-9.29M	-376.17M	-77.83M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
97.62M	152.09M	104.16M	68.08M	42.57M	11.63M
	Total Assets
12.29B	10.99B	8.82B	8.89B	8.27B	121.60M
	Total Debt
409.25M	2.98B	2.00B	1.86B	1.26B	356.39M
	Net Debt
311.63M	2.83B	1.90B	1.80B	1.22B	344.76M
	Total Liabilities
5.86B	5.19B	3.54B	3.34B	2.42B	622.76M
	Stockholders Equity
2.34B	2.13B	1.53B	1.60B	1.66B	-507.69M
Cash Flow		Free Cash Flow
898.51M	935.37M	881.24M	662.91M	276.40M	4.58M
	Operating Cash Flow
969.89M	999.55M	949.14M	728.45M	281.66M	5.23M
	Investing Cash Flow
-834.37M	-638.14M	-118.03M	-485.22M	-1.60B	-652.00K
	Financing Cash Flow
-193.66M	-313.48M	-795.03M	-217.72M	1.35B	-295.00K

Blue Owl Capital Technical Analysis

Technical Analysis Sentiment

Positive

Last Price18.48

Price Trends

50DMA

18.87

Negative

100DMA

21.28

Negative

200DMA

20.65

Negative

Market Momentum

MACD

-0.13

Negative

RSI

50.75

Neutral

STOCH

52.80

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OWL, the sentiment is Positive. The current price of 18.48 is above the 20-day moving average (MA) of 17.90, below the 50-day MA of 18.87, and below the 200-day MA of 20.65, indicating a neutral trend. The MACD of -0.13 indicates Negative momentum. The RSI at 50.75 is Neutral, neither overbought nor oversold. The STOCH value of 52.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OWL.

Blue Owl Capital Risk Analysis

Blue Owl Capital disclosed 74 risk factors in its most recent earnings report. Blue Owl Capital reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Blue Owl Capital Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARES	76 Outperform	$52.13B	90.23	15.93%	2.37%	19.02%	-20.50%
BLK	75 Outperform	$141.84B	22.36	14.37%	2.22%	11.73%	4.76%
CG	70 Outperform	$14.42B	14.61	20.38%	3.33%	62.87%	―
OWL	69 Neutral	$27.52B	185.90	4.62%	3.90%	32.99%	8.06%
BX	67 Neutral	$162.57B	41.18	34.07%	2.90%	24.92%	16.65%
Sector *	64 Neutral	$12.60B	9.73	7.92%	16985.68%	12.21%	-5.61%
TPG	63 Neutral	$16.76B	―	0.24%	3.51%	46.69%	-98.56%

* Financial Sector Average

Performance Comparison

OWL

Blue Owl Capital

18.48

0.73

4.11%

BLK

BlackRock

923.44

150.97

19.54%

Blackstone Group

139.39

20.45

17.19%

Carlyle Group

42.04

1.23

3.01%

ARES

Ares Management

164.95

28.42

20.82%

TPG

49.60

8.61

21.01%

Blue Owl Capital Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q1-2025)

% Change Since: -0.27%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Positive

The earnings call highlighted Blue Owl Capital's record fundraising, robust FRE and DE growth, successful mergers, and a diversified investor base, which paints a positive picture of the company's performance and resilience. However, challenges in the syndicated market and transaction fee volatility, along with global expansion risks, present areas to monitor. Overall, the highlights significantly outweigh the lowlights, suggesting a strong performance and strategic positioning.

Q1-2025 Updates

Positive Updates

Record Fundraising and Capital Deployment

Blue Owl Capital reported a record equity raise of $27.5 billion in 2024, which is about 75% higher than 2023. Including debt, they raised over $47 billion, also a record for the company.

Strong Fee Related Earnings (FRE) and Distributable Earnings (DE) Growth

The company reported a 26% FRE growth for the year, with management fees growing at over a 35% annual growth rate since listing as a public company.

Successful Mergers and New Product Launches

The merger of OTF and OTF2 was completed, making OTF the largest technology-focused BDC in the public market. Additionally, a new alternative credit product focused on the wealth market is expected to close its private phase fundraise in the summer.

Diversified and Global Investor Base

Over the past 12 months, Blue Owl Capital raised nearly $30 billion of equity, an increase of over 75% from the prior year, with a significant portion coming from new investors and international markets.

Prominent Performance in Real Assets

The Digital Infrastructure Fund 3 reached its hard cap of $7 billion, nearly double the size of the prior fund, demonstrating strong demand in the real assets segment.

Negative Updates

Challenges in the Syndicated Market

The syndicated market essentially shut down, affecting the balance between market share gains in private credit and the impact of lower M&A activity on capital deployment.

Higher Transaction Fee Volatility

Transaction fees were lower this quarter compared to the last, reflecting the least predictable part of the business, although it remains a small component of overall earnings.

Potential Risks in Global Expansion

While Blue Owl has a strong U.S. focus, there are challenges in global expansion, particularly in markets with heightened geopolitical tensions, such as Asia.

Company Guidance

During Blue Owl Capital's Q1 2025 earnings call, significant guidance was provided, highlighting several key metrics and strategic directions for the company. Blue Owl reported fee-related earnings (FRE) of $0.23 per share and distributable earnings (DE) of $0.21 per share for Q4 2024, with full-year 2024 FRE and DE at $0.86 and $0.77 per share, respectively. The company declared an annual fixed dividend of $0.9 for 2025, marking a 25% increase from the prior year. Blue Owl achieved a record equity raise of $27.5 billion in 2024, up 75% from 2023, and deployed $52 billion in credit, driving a 26% FRE growth. Management fees grew at an annual rate of over 35% since going public, supported by a robust business model where approximately 90% of management fees are derived from permanent capital. Looking forward, Blue Owl anticipates continued fee growth from over $23 billion in assets under management (AUM) set to begin generating management fees, driving an incremental $290 million in revenue. Additionally, the successful merger of OTF and OTF2 is expected to contribute approximately $135 million in annual management fees. The company also highlighted a strong performance in direct lending with a gross origination of $13 billion, and an impressive 13 basis point average annual realized loss rate, showcasing its rigorous underwriting standards.

Blue Owl Capital Corporate Events

Executive/Board Changes

Blue Owl Capital Appoints Jennifer Brouse to Board

Neutral

Mar 28, 2025

On March 26, 2025, Blue Owl Capital Inc. appointed Jennifer Brouse to its Board of Directors, filling the vacancy left by Sean Ward’s resignation. Brouse, who is already a Managing Director and Chief Operating Officer at Blue Owl, will not receive additional compensation for her new role. This appointment was made under the terms of the Investor Rights Agreement, highlighting the company’s ongoing strategic alignment with its equity holders.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.