BLK

We rate BlackRock, Inc. (BLK) as a Reduce with a composite score of 48.7/100 at a current price of $1081.03. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in quality (59th percentile) and stability (58th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (24th percentile) and value (25th percentile) tempers our overall conviction. We assign a Narrow Moat rating (61/100), Low uncertainty, and Standard capital allocation.

Key items to watch: sustainability of the current growth rate; valuation compression risk if growth disappoints. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

BlackRock, Inc. holds a top-quartile position (#0 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 48.7/100 places it at rank #2204 in our full 7,333-stock universe. At N/A in market capitalization, BlackRock, Inc. is a small-cap player in the Finance, Insurance, And Real Estate space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 35%, though momentum at the 52th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 70% (-6.9pp vs sector) narrow to operating margins of 33% (+16.2pp vs sector) and net margins of 28.9%, yielding a gross-to-net conversion rate of 41%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $1081.03, BlackRock, Inc. is trading at a premium to fundamental value. Our value factor score of 25/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The premium valuation implies the market is pricing in significant future growth or quality improvements that are not yet fully reflected in current fundamentals.

The stock currently trades at a P/E of 26.5x (a 122% premium to the sector median of 11.9x), EV/EBITDA of 24.4x (at a premium), P/B of 3.0x, P/S of 7.6x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a Low uncertainty rating to BlackRock, Inc.. The company exhibits strong financial stability with a beta of 1.10, conservative leverage (23% D/E), and a stability factor in the 58th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

We identify no major risk factors at this time. The company's stability factor sits at the 58th percentile with quality at the 59th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.

Key risk mitigants include: healthy gross margins of 70% provide a buffer against cost pressures; conservative leverage (23% D/E) limits balance sheet risk. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate BlackRock, Inc.'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 11.5%, and the balance sheet is managed within acceptable parameters (D/E: 23%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; BlackRock, Inc. falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. Absent a dividend, the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, BlackRock, Inc. receives a Reduce rating with a composite score of 48.7/100 (rank #2204 of 7,333). Our quantitative framework assigns a Narrow Moat (61/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 43/100.

Our analysis does not support a constructive view on BlackRock, Inc. at this time. The combination of the current quantitative profile, low uncertainty, and standard capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.