Blue Owl Capital (OWL) Targets Data Center Growth, Is The Upside Already Priced In?
Blue Owl Capital (OWL) has attracted fresh attention after outlining plans for a US$6.5b data center REIT, reporting higher adjusted quarterly earnings, announcing dividends and buybacks, and expanding technology finance funding capacity.
Despite the fresh headlines around the planned data center REIT and technology finance activity, Blue Owl Capital’s recent share price performance has been mixed, with short term share price returns weaker while the 90 day share price return of 24.73% and a 3 year total shareholder return of 13.69% point to earlier momentum that has faded more recently.
Compare Blue Owl Capital’s digital infrastructure and private credit story with a hand picked set of peers by reviewing 55 AI infrastructure stocks that are aiming to capture similar trends in AI and data center growth.
After Blue Owl Capital’s sharp pullback and recent rebound on the data center REIT story, the issue now is whether most of the re rating is already in the price or if meaningful upside still lies ahead as valuation stacks up next.
Most Popular Narrative: 7.7% Undervalued
Against Blue Owl Capital’s last close at $11.75, the most followed fair value estimate of $12.74 points to a modest valuation gap that hinges on how investors view its earnings and fee growth trajectory.
Significant ongoing growth in permanent capital vehicles, particularly through expansion in private credit, real assets, and evergreen/interval fund strategies, is providing stable and recurring management fee revenue and positioning Blue Owl for higher future earnings and durable margin expansion.
Want to understand why this fee engine supports a higher value for Blue Owl Capital? The narrative focuses on rising margins, compounding revenue and a future earnings multiple that looks very different from today.
Result: Fair Value of $12.74 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, investors also need to weigh execution risks around Blue Owl Capital’s acquisition-heavy expansion and the potential impact of softer fundraising or deployment on fee revenue and margins.
Find out about the key risks to this Blue Owl Capital narrative.
Another View: What Blue Owl Capital’s P/E Is Saying
While the analyst narrative points to Blue Owl Capital being 7.7% undervalued, the current P/E of 99.3x paints a very different picture. It is far above the fair ratio of 21x, the US Capital Markets industry at 39.7x, and peers at 32.7x. That gap suggests meaningful valuation risk if expectations reset. Where do you think the multiple eventually settles?
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
With mixed signals on Blue Owl Capital so far, this is the moment to move quickly, review the full picture and decide where you stand. To weigh both the upside potential and the concerns raised by the latest data, start with the 2 key rewards and 3 important warning signs.
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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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