In a sliding market, State Street has defied the odds, trading up to $126.57 per share. Its 11.6% gain since October 2025 has outpaced the S&P 500’s 5.5% drop. This was partly due to its solid quarterly results, and the performance may have investors wondering how to approach the situation.
Is now the time to buy State Street, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it’s free.
Why Is State Street Not Exciting?
Despite the momentum, we're swiping left on State Street for now. Here are two reasons there are better opportunities than STT and a stock we'd rather own.
1. Long-Term Revenue Growth Disappoints
A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.
Regrettably, State Street’s revenue grew at a sluggish 3.6% compounded annual growth rate over the last five years. This fell short of our benchmark for the financials sector.
2. EPS Barely Growing
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
State Street’s EPS grew at 9.1% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 3.6% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.
Final Judgment
State Street isn’t a terrible business, but it doesn’t pass our quality test. With its shares beating the market recently, the stock trades at 10.5× forward P/E (or $126.57 per share). This valuation is reasonable, but the company’s shakier fundamentals present too much downside risk. We're fairly confident there are better stocks to buy right now. We’d suggest looking at our favorite semiconductor picks and shovels play.
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