Blue Owl Capital (OWL) Margin Miss Reinforces Debate on Growth Versus Valuation Premium

Blue Owl Capital (OWL) reported a net profit margin of 1.9% for the twelve months ending September 30, 2025, noticeably down from last year’s margin of 5% as a one-off loss of $317.4 million weighed on the bottom line. Despite this margin dip, Blue Owl has posted an impressive 71.5% annual earnings growth rate over the past five years, and forecasts call for earnings to accelerate by 77.9% per year, far ahead of the broader US market’s expected 15.9% growth. The stock is currently trading at $15.77, which is above its estimated fair value, leaving investors to weigh robust growth prospects against margin recovery and a somewhat premium valuation.

See our full analysis for Blue Owl Capital.

Next, we'll see how Blue Owl’s headline numbers measure up against the current narratives that have shaped expectations in the market.

See what the community is saying about Blue Owl Capital

Fee Revenue Expansion Anchors Growth Catalysts

• Analysts project Blue Owl's revenue to rise by 17.5% annually over the next three years, reflecting expectations of broad growth beyond traditional lending.
• Analysts' consensus view leans positive on the company's broadening platform, highlighting:
  • Expansion into retirement plans and international markets is set to drive recurring management fees above industry averages.
  • Analysts note synergies from strategic acquisitions are already supporting topline acceleration and anticipate further scale benefits as integrations mature.

Consensus analysts highlight how recurring revenue is already reshaping the long-term view, but see risk if integration benefits take longer to materialize.
📊 Read the full Blue Owl Capital Consensus Narrative.

Margin Leap Projected, but Integration Risks Loom

• Analysts expect profit margins to jump from 2.9% today to 120.2% in three years, a massive swing tied to anticipated cost efficiencies and earnings leverage from new business lines.
• According to the consensus narrative, risks to this margin expansion include:
  • Heavy reliance on new acquisitions brings execution risk, with potential for higher costs or delayed synergy realization impacting future profitability.
  • Fundraising's dependence on steady capital inflows can be challenged during macro downturns or tightening cycles, which could reduce growth and dilute the expected margin improvement.

Premium to DCF Fair Value Raises Debate

• At $15.77 per share, Blue Owl trades well above its DCF fair value of $0.67 but sits below the analyst target price of $21.82, framing a clear valuation disconnect.
• Analysts' consensus view sees a sharp division:
  • Bulls find support in high earnings growth estimates, betting the market will reward Blue Owl as profits and margins rise, while
  • Critics point to a 3.7x Price-to-Sales ratio that is above peers and caution about premium pricing unless margin forecasts are delivered.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Blue Owl Capital on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your Blue Owl Capital research is our analysis highlighting 1 key reward and 4 important warning signs that could impact your investment decision.

See What Else Is Out There

Despite robust growth forecasts, Blue Owl Capital’s stretched valuation and uncertain margin turnaround raise questions about whether investors are paying too much for future potential.

Looking for greater value and a better margin of safety? Check out these 833 undervalued stocks based on cash flows to discover companies trading below their fair value with more attractive upside.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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