State Street (STT) Earnings Growth And 19.6% Margin Reinforce Bullish Narratives

State Street (STT) has wrapped up FY 2025 with fourth quarter total revenue of US$3.7b and basic EPS of US$2.46, alongside trailing twelve month revenue of US$13.9b and EPS of US$9.55 that frame the full year earnings picture. Over recent periods, total revenue has moved from US$3.4b in Q4 2024 to US$3.5b in Q3 2025 and US$3.7b in Q4 2025, while quarterly EPS has ranged from US$2.07 in Q1 2025 to US$2.83 in Q3 2025 and US$2.46 in the latest quarter. With trailing net income of US$2.7b and a 19.6% margin, the release points to a year where profitability has held up as a central part of the story.

See our full analysis for State Street.

With the headline numbers on the table, the next step is to see how this earnings run rate lines up against the widely followed narratives around State Street’s growth, risks, and long term profitability profile.

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9.4% earnings growth versus 0.4% trend

• Over the last 12 months, earnings grew 9.4% compared with a 0.4% per year average over five years, while the trailing net margin sits at 19.6% versus 19.2% a year earlier.
• Consensus narrative points to growth in assets and fee revenue as key supports for expansion, and the recent numbers give you some backup for that view:
  • Trailing net income of US$2.7b on US$13.9b of revenue lines up with that 19.6% margin, which fits the idea of a business that can turn higher assets under management into solid profits.
  • Quarterly EPS moving between US$2.07 and US$2.83 across 2025, then landing at US$2.46 in Q4, shows earnings that are holding within a relatively tight band while the long term trend has been closer to that 0.4% per year baseline.

Over the last year, bulls argue that growing fee franchises and scale should keep supporting earnings even as conditions change. This mix of 9.4% earnings growth on a 19.6% margin is the type of profile they tend to highlight when they talk about durable expansion. 🐂 State Street Bull Case

Valuation gap versus DCF fair value

• The shares trade on a P/E of 13.2x, below peer and industry averages, and the current price of US$128.02 sits under the stated DCF fair value of about US$163.23.
• Supporters of the bullish view often lean on this kind of valuation setup, and the current data gives them some clear talking points:
  • With earnings quality described as high and trailing EPS at US$9.55, the 13.2x P/E implies you are paying less per dollar of earnings than the 19.2x peer and 25.7x industry levels referenced in the analysis.
  • A 2.62% dividend yield on top of that earnings base means part of your return is coming in cash while you wait to see whether the discount to the US$163.23 DCF fair value estimate closes over time.

Credit provisioning and fee pressure watchpoints

• The analysis flags the allowance for bad loans at 82% as a risk to monitor, alongside comments about fee pressure and potential headwinds for net interest income.
• Bears focus on these pressure points, and the supplied figures show why they keep coming back to them:
  • Interest related income is not broken out here, but with trailing net income at US$2.7b on US$13.9b of revenue, even a modest squeeze on either credit costs or fees could matter for a 19.6% margin business.
  • At the same time, earnings over the last year are up 9.4% versus the longer term 0.4% trend, which means any future hit from credit provisioning or lower fees would be coming off a stronger recent base rather than an already weak one.

Skeptical investors often highlight that mix of a 19.6% margin and an 82% allowance as a reason to keep an eye on how credit and fee trends show up in future reports rather than assuming the recent 9.4% earnings growth pace will automatically repeat. 🐻 State Street Bear Case

Next Steps

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

See the numbers in a different light and, if you think your view adds something fresh, shape your own narrative in just a few minutes with Do it your way.

A great starting point for your State Street research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

See What Else Is Out There

State Street’s 19.6% margin sits alongside an 82% allowance for bad loans and flagged fee pressure, which together raise questions about how resilient earnings could be.

If you want ideas with fewer questions around credit costs and revenue headwinds, check out CTA_SCREENER_SOLID_BALANCE_SHEET to focus on companies built on stronger balance sheets and cleaner income streams today.

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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