Blackstone Inc. (BX): Can Earnings Momentum Overcome Recent Slumps?

Blackstone Inc. (BX), the global private equity giant, faces a critical juncture ahead of its July 24, 2025 earnings report. While the company has historically been a stalwart of earnings beats, recent quarters have seen mixed performance, raising questions about its ability to sustain momentum. Investors now weigh whether Blackstone's resilience in outperforming expectations—evident in 14 of its past 20 quarters—will overcome its recent struggles or if structural headwinds are taking hold.

A History of Earnings Resilience—With Recent Slippage

Blackstone's track record of beating estimates is undeniable. Between 2020 and 2024, it exceeded EPS expectations in 14 out of 20 quarters, often by significant margins. For instance, in Q1 2021, it delivered an EPS of $0.96 against a $0.72 estimate—a 33% surprise—while Q3 2021's $1.28 EPS beat the $0.91 consensus by 41%. Even in 2023, Q4's 18% beat to $1.11 EPS underscored its capacity to outperform.

But the past year has been rocky. In Q2 2024, Blackstone narrowly missed its EPS estimate ($0.96 vs. $0.99), and Q1 2025 saw a 28.6% year-over-year decline in net income to $0.80 per share. While distributable earnings rose to $1.09 (up 9.8% from 2024's $0.98), the net income slump—driven by higher costs and lower fee-related revenue—has raised concerns about the company's ability to sustain growth in a slowing private equity market.

The Zacks Earnings ESP: A Bullish Signal Amid Mixed Data

Analysts at Zacks have flagged a +0.50% Earnings ESP for Blackstone's upcoming report—a metric suggesting a 70% historical probability of a beat. This optimism contrasts with Blackstone's current Zacks Rank #3 (Hold), which reflects broader uncertainty about its near-term trajectory. The positive ESP may stem from factors like:
- Stable AUM Growth: Assets under management rose 10% to $1.17 trillion in Q1 2025, a sign of enduring investor confidence.
- Peer Outperformance: While competitors like KKR (KKR) and Lazard (LAZ) have struggled with declining EPS, Blackstone's 96.7% YoY EPS growth in Q1 2025 (to $3.62 TTM) remains a bright spot.

However, the 3-year average EPS decline (-23.7%) and Q1 2025's revenue drop (10.7% YoY) highlight execution risks. Investors must reconcile these trends with the Zacks' cautiously optimistic outlook.

Financial Trends: A Split Between Core Strength and Near-Term Weakness

Blackstone's financial health is a tale of two halves. On one hand, its dividend payout of $0.93 per share (Q1 2025) and consistent buybacks (3.5 million shares repurchased in the past year) signal confidence in its cash flow. On the other, its revenue volatility—a 166.9% YoY surge in Q2 2024 followed by a 10.7% decline in Q1 2025—reveals reliance on cyclical fee income.

Analysts project a 29.7% EPS rise to $5.94 by end-2025, but this hinges on stabilizing revenue and cost discipline. AUM growth, now at $1.17 trillion, could provide a cushion if fee-based income rebounds.

Investment Strategy: Wait for the July Report, Then Decide

For investors, the July 24 earnings release is a pivotal moment. Here's how to approach it:

1. Optimism Scenario:
2. A beat would validate Zacks' ESP and likely boost shares, especially if revenue trends upward.

3. Buy Signal: Consider a 5% position in BX if the report shows Q2 2025 EPS ≥ $1.10 and AUM growth accelerates.

4. Pessimism Scenario:

5. A miss could amplify concerns about declining net income and trigger a selloff.

6. Sell Signal: Exit if EPS falls below $0.95 or revenue continues to lag estimates.

7. Neutral Play:

8. Use options to hedge. A straddle (long call + put) around the earnings date could profit from volatility regardless of direction.

Final Take

Blackstone remains a titan of private equity, but its recent stumble underscores the industry's cyclical challenges. While the Zacks ESP and AUM growth suggest hope for a rebound, investors should prioritize the July report as a litmus test. Until then, patience—and a watchful eye on earnings surprises—should guide strategy.

Bottom Line: BX is a hold until the July report. A beat could reignite growth optimism; a miss may force a reassessment of its long-term narrative.