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Relative valuation derived from Financials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 55.1GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
10.5%
Sector: 8.5%
Dividend Analysis audit
INCOME
2.64%
Trailing Yield
$2.64
Per $100 Invested
Solid dividend yield for income-focused strategies.
Est. Payout Ratio
33%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, STATE STREET CORP (STT) receives a "Hold" rating with a composite score of 55.4/100, ranked #260 out of 4446 stocks. Key factor scores: Quality 55/100, Value 72/100, Momentum 57/100. This is quantitative analysis only — not investment advice.
STATE STREET CORP (STT) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does STATE STREET CORP Do?
State Street Corporation, through its subsidiaries, provides a range of financial products and services to institutional investors worldwide. The company offers investment servicing products and services, including custody; product accounting; daily pricing and administration; master trust and master custody; depotbank services; record-keeping; cash management; foreign exchange, brokerage and other trading services; securities finance and enhanced custody products; deposit and short-term investment facilities; loans and lease financing; investment manager and alternative investment manager operations outsourcing; performance, risk, and compliance analytics; and financial data management to support institutional investors. It also engages in the provision of portfolio management and risk analytics, as well as trading and post-trade settlement services with integrated compliance and managed data. In addition, the company offers investment management strategies and products, such as core and enhanced indexing, multi-asset strategies, active quantitative and fundamental active capabilities, and alternative investment strategies. Further, it provides services and solutions, including environmental, social, and governance investing; defined benefit and defined contribution; and global fiduciary solutions, as well as exchange-traded fund under the SPDR ETF brand. The company provides its products and services to mutual funds, collective investment funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments, and investment managers. State Street Corporation was founded in 1792 and is headquartered in Boston, Massachusetts. STATE STREET CORP (STT) is classified as a large-cap stock in the Financials sector, specifically within the Banking industry. The company is led by CEO Ronald P. O'Hanley and employs approximately 42,200 people, headquartered in Boston, Massachusetts. With a market capitalization of $35.7B, STT is one of the prominent companies in the Financials sector.
STATE STREET CORP (STT) Stock Rating — Hold (April 2026)
As of April 2026, STATE STREET CORP receives a Hold rating with a composite score of 55.4/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.STT ranks #260 out of 4,446 stocks in our coverage universe. Within the Financials sector, STATE STREET CORP ranks #96 of 891 stocks, placing it in the top quartile of its Financials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
STT Stock Price and 52-Week Range
STATE STREET CORP (STT) currently trades at $139.42. The stock gained $0.93 (0.7%) in the most recent trading session. The 52-week high for STT is $137.05, which means the stock is currently trading 1.7% from its annual peak. The 52-week low is $72.81, putting the stock 91.5% above its annual trough. Recent trading volume was 2.4M shares, reflecting moderate market activity.
Is STT Overvalued or Undervalued? — Valuation Analysis
STATE STREET CORP (STT) carries a value factor score of 72/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 12.49x, compared to the Financials sector average of 14.88x — a discount of 16%. The price-to-book ratio stands at 1.31x, versus the sector average of 1.22x. The price-to-sales ratio is 2.70x, compared to 0.90x for the average Financials stock. On an enterprise value basis, STT trades at 9.78x EV/EBITDA, versus 3.26x for the sector.
Based on these multiples, STATE STREET CORP appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
STATE STREET CORP Profitability — ROE, Margins, and Quality Score
STATE STREET CORP (STT) earns a quality factor score of 55/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 10.5%, compared to the Financials sector average of 8.5%, which is within a healthy range. Return on assets (ROA) comes in at 0.8% versus the sector average of 1.2%.
On a margin basis, STATE STREET CORP reports gross margins of 0.0%. The operating margin is 27.6% (sector: 21.8%). Net profit margin stands at 21.6%, versus 17.7% for the average Financials stock. Revenue growth is running at 11.1% on a trailing basis, compared to 9.4% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
STT Debt, Balance Sheet, and Financial Health
STATE STREET CORP has a debt-to-equity ratio of 1215.0%, compared to the Financials sector average of 121.0%. This elevated leverage warrants close monitoring, as it increases the company's sensitivity to rising interest rates and economic downturns. The current ratio is 1.08x, suggesting adequate working capital coverage. Total debt on the balance sheet is $34.72B. Cash and equivalents stand at $4.76B.
STT has a beta of 1.11, meaning it is roughly in line with the broader market in terms of price volatility. The stability factor score for STATE STREET CORP is 76/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
STATE STREET CORP Revenue and Earnings History — Quarterly Trend
In TTM 2026, STATE STREET CORP reported revenue of $13.54B and earnings per share (EPS) of $9.55. Net income for the quarter was $2.93B. Gross margin was 0.0%. Operating income came in at $3.74B.
In FY 2025, STATE STREET CORP reported revenue of $13.94B and earnings per share (EPS) of $9.55. Net income for the quarter was $2.94B. Revenue grew 7.3% year-over-year compared to FY 2024. Operating income came in at $3.73B.
In Q3 2025, STATE STREET CORP reported revenue of $3.54B and earnings per share (EPS) of $2.83. Net income for the quarter was $861M. Revenue grew 8.8% year-over-year compared to Q3 2024. Operating income came in at $1.10B.
In Q2 2025, STATE STREET CORP reported revenue of $3.45B and earnings per share (EPS) of $2.20. Net income for the quarter was $693M. Revenue grew 8.1% year-over-year compared to Q2 2024. Operating income came in at $889M.
Over the past 8 quarters, STATE STREET CORP has demonstrated a growth trajectory, with revenue expanding from $3.19B to $13.54B. Investors analyzing STT stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
STT Dividend Yield and Income Analysis
STATE STREET CORP (STT) currently pays a dividend yield of 2.6%. At this yield, a $10,000 investment in STT stock would generate approximately $$264.00 in annual dividend income. This compares to the Financials sector average dividend yield of 2.5%, meaning STT offers above-average income for its sector. With a net margin of 21.6%, the dividend appears well-covered by earnings, suggesting sustainable payouts going forward.
STT Momentum and Technical Analysis Profile
STATE STREET CORP (STT) has a momentum factor score of 57/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 29/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 33/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
STT vs Competitors — Financials Sector Ranking and Peer Comparison
Comparing STT against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full STT vs S&P 500 (SPY) comparison to assess how STATE STREET CORP stacks up against the broader market across all factor dimensions.
STT Next Earnings Date
No upcoming earnings date has been announced for STATE STREET CORP (STT) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy STT? — Investment Thesis Summary
STATE STREET CORP presents a balanced picture with arguments on both sides. The value score of 72/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 76/100) reduces downside risk.
In summary, STATE STREET CORP (STT) earns a Hold rating with a composite score of 55.4/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on STT stock.
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Institutional Research Dossier
STATE STREET CORP (STT) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
State Street Corporation (STT) currently holds a 'Hold' rating, a reflection of its solid but not exceptional performance and a valuation that appears to be largely in line with its intrinsic value. While State Street benefits from a strong position in the investment servicing industry and demonstrates healthy profitability metrics, its relatively high debt levels and negative free cash flow raise concerns about its financial flexibility and capital allocation strategies. The company's future success hinges on its ability to navigate evolving regulatory landscapes, maintain its competitive edge in a consolidating industry, and effectively deploy capital to generate sustainable growth.
The 'Hold' rating acknowledges State Street's established market presence and consistent profitability, but also factors in the challenges it faces in a rapidly changing financial environment. The company's ability to innovate and adapt its service offerings, manage its debt burden, and generate positive free cash flow will be crucial in determining its long-term investment potential. Investors should closely monitor these factors before considering a more decisive investment stance.
Business Strategy & Overview
State Street operates primarily in two segments: Investment Servicing and Investment Management. The Investment Servicing segment, which constitutes the bulk of its revenue, provides a comprehensive suite of services to institutional investors, including custody, fund accounting, securities lending, and foreign exchange. This segment benefits from sticky client relationships and recurring revenue streams, as switching costs for these services can be substantial. State Street's strategic focus is on expanding its service offerings and leveraging technology to enhance efficiency and client experience. The company has been investing in digital transformation initiatives to streamline operations, improve data analytics capabilities, and offer more customized solutions.
The Investment Management segment, operating under the SPDR ETF brand, offers a range of investment strategies, including passive and active management, as well as alternative investments. The SPDR ETF business is a significant contributor to State Street's overall revenue and profitability. The company's strategy in this segment is to expand its ETF product line, particularly in high-growth areas such as ESG and thematic investing. State Street also focuses on enhancing its active management capabilities to deliver superior investment performance and attract new clients.
State Street's business model is highly dependent on the overall health of the financial markets and the level of assets under custody and management. Fluctuations in market values and investor sentiment can significantly impact its revenue and profitability. The company also faces intense competition from other large custodian banks, asset managers, and fintech firms. To maintain its competitive edge, State Street must continuously innovate its service offerings, invest in technology, and adapt to evolving client needs.
A key aspect of State Street's strategy is its focus on operational efficiency and cost management. The company has implemented various initiatives to streamline processes, reduce expenses, and improve profitability. These initiatives include automation, outsourcing, and consolidation of operations. State Street also emphasizes risk management and compliance to ensure the safety and soundness of its operations and protect its clients' assets. The company's strong risk management framework is a critical component of its overall business strategy.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
11.1%
Sector: 9.4%
+18% VS SCTR
Economic Moat Analysis
State Street possesses a narrow economic moat, primarily derived from switching costs and intangible assets. The switching costs associated with investment servicing are significant, as institutional investors face considerable operational and regulatory hurdles when changing custodians or fund administrators. This creates a degree of stickiness in client relationships and provides State Street with a recurring revenue stream. The company's established reputation and long track record in the industry also contribute to its intangible assets, enhancing its credibility and attracting new clients.
However, the moat is not wide due to the presence of strong competitors and the commoditization of certain investment servicing functions. While State Street is one of the largest players in the industry, it faces intense competition from other global custodian banks, such as BNY Mellon and JPMorgan Chase. These competitors offer similar services and have comparable scale, limiting State Street's pricing power and ability to generate excess returns. Furthermore, some investment servicing functions, such as basic custody, are becoming increasingly commoditized, reducing the differentiation among providers.
The SPDR ETF business also contributes to State Street's economic moat, but to a lesser extent. While the SPDR brand is well-recognized and has a strong market presence, the ETF industry is highly competitive, with numerous providers offering similar products. The barriers to entry in the ETF market are relatively low, and new entrants can quickly gain market share by offering innovative products or lower fees. Therefore, the SPDR ETF business provides some competitive advantage, but it is not a dominant source of economic moat.
The increasing focus on technology and data analytics in the investment servicing industry could potentially widen State Street's economic moat in the future. By investing in advanced technology platforms and developing proprietary data analytics capabilities, the company can offer more customized and value-added services to its clients. This could differentiate State Street from its competitors and increase switching costs, strengthening its competitive position. However, the company must continue to innovate and adapt to evolving client needs to maintain its competitive edge.
Financial Health & Profitability
State Street's financial health presents a mixed picture. The company has demonstrated consistent revenue growth over the past few years, with revenue increasing from $11.95 billion in FY2023 to $13.94 billion in FY2025. This growth is primarily driven by increased assets under custody and management, as well as higher fee income from investment servicing and investment management activities. The company's operating margin is also healthy, consistently exceeding 25% in recent quarters. This indicates that State Street is effectively managing its expenses and generating strong profitability from its core operations.
However, State Street's free cash flow is a cause for concern. The company reported negative free cash flow of -$2.63 billion for the trailing twelve months. This suggests that State Street is spending more cash than it is generating from its operations, which could strain its financial resources and limit its ability to invest in growth initiatives. The negative free cash flow may be due to increased capital expenditures, acquisitions, or other strategic investments. It is important for investors to monitor State Street's free cash flow generation closely to assess its long-term financial sustainability.
State Street's balance sheet is characterized by a high level of debt. The company's total debt stands at $34.72 billion, resulting in a debt-to-equity ratio of 1,215.00, significantly higher than the sector average of 115.00. This high level of leverage increases State Street's financial risk and could make it more vulnerable to economic downturns or adverse market conditions. The company's current ratio of 1.08 indicates that it has sufficient liquid assets to cover its short-term liabilities, but its high debt burden remains a concern.
State Street's return on equity (ROE) of 10.5% is higher than the sector average of 8.5%, indicating that the company is effectively utilizing its equity to generate profits. However, the high level of debt also contributes to the higher ROE, as leverage can amplify returns. It is important to consider the company's debt burden when evaluating its ROE. Overall, State Street's financial health is solid in terms of revenue growth and profitability, but its negative free cash flow and high debt levels raise concerns about its financial flexibility and long-term sustainability.
Valuation Assessment
State Street's valuation appears to be reasonable based on several key metrics. The company's price-to-earnings (P/E) ratio of 12.8x is lower than the sector average of 15.5x, suggesting that the stock may be undervalued relative to its peers. Similarly, its enterprise value-to-EBITDA (EV/EBITDA) ratio of 2.3x is significantly lower than the sector average of 3.5x, further indicating potential undervaluation. These metrics suggest that investors may be undervaluing State Street's earnings and cash flow generation potential.
However, it is important to consider State Street's negative free cash flow when assessing its valuation. The company's negative free cash flow could be a sign of underlying financial problems or unsustainable business practices. Investors should carefully analyze the reasons for the negative free cash flow and assess whether it is likely to improve in the future. If the negative free cash flow persists, it could justify a lower valuation multiple.
State Street's valuation should also be considered in the context of its growth prospects. The company's revenue growth of 11.1% is higher than the sector average of 9.3%, indicating that it is growing at a faster pace than its peers. This higher growth rate could justify a higher valuation multiple. However, it is important to assess whether State Street can sustain its growth rate in the long term. The company's growth is dependent on the overall health of the financial markets and its ability to attract new clients and assets.
Overall, State Street's valuation appears to be fair based on its P/E and EV/EBITDA ratios, but its negative free cash flow and high debt levels raise concerns. Investors should carefully analyze the company's financial health and growth prospects before making an investment decision. The 'Hold' rating reflects the uncertainty surrounding State Street's valuation and the need for further analysis.
Risk & Uncertainty
State Street faces several key risks and uncertainties that could impact its financial performance and stock price. One of the most significant risks is regulatory scrutiny. As a large financial institution, State Street is subject to extensive regulation by various government agencies, including the Federal Reserve and the Securities and Exchange Commission. Changes in regulations could increase compliance costs, limit its business activities, or expose it to legal liabilities. The increasing focus on cybersecurity and data privacy also poses a regulatory risk, as State Street is responsible for safeguarding vast amounts of sensitive client data.
Another significant risk is competition. The investment servicing and investment management industries are highly competitive, with numerous players vying for market share. State Street faces competition from other large custodian banks, asset managers, and fintech firms. The increasing commoditization of certain investment servicing functions and the rise of low-cost ETF providers could put pressure on State Street's fees and margins. To maintain its competitive edge, State Street must continuously innovate its service offerings, invest in technology, and adapt to evolving client needs.
State Street's high debt level also poses a significant risk. The company's debt-to-equity ratio is significantly higher than the sector average, increasing its financial risk and vulnerability to economic downturns or adverse market conditions. A rise in interest rates could increase State Street's borrowing costs and reduce its profitability. The company's ability to service its debt obligations depends on its ability to generate sufficient cash flow from its operations.
Finally, State Street is exposed to market risk. Fluctuations in market values and investor sentiment can significantly impact its revenue and profitability. A decline in asset values could reduce its assets under custody and management, leading to lower fee income. Market volatility could also increase trading volumes and volatility in foreign exchange rates, impacting its trading revenue. State Street's ability to manage market risk effectively is crucial to its financial performance.
Bulls Say / Bears Say
The Bull Case
BULL VIEWState Street's dominant position in investment servicing, coupled with its sticky client base, provides a stable and recurring revenue stream, making it a reliable investment in a volatile market.
BULL VIEWThe company's strategic investments in technology and data analytics will enhance its service offerings and attract new clients, driving future growth and profitability.
The Bear Case
BEAR VIEWState Street's high debt levels and negative free cash flow raise concerns about its financial flexibility and ability to invest in future growth opportunities.
BEAR VIEWThe increasing commoditization of investment servicing and the rise of low-cost ETF providers will put pressure on State Street's fees and margins, eroding its profitability.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score STT and 4,400+ other equities.
STATE STREET CORP exhibits a 98% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
0.8%
Sector: 1.2%
Gross Margin
Pricing power and cost efficiency
0.0%
Sector: 0.0%
Operating Margin
Core business profitability
27.6%
Sector: 21.8%
Net Margin
Bottom-line profitability
21.6%
Sector: 17.7%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield2.48%
Yield Delta+6%
Income Projection audit
A $10,000 investment would generate approximately $264 annually in dividends at the current trailing rate.
