Blackstone Secured Lending Fund (BXSL) AI Stock Analysis

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Blackstone Secured Lending Fund

(NYSE:BXSL)

74Outperform

The overall score is influenced by strong financial performance and attractive valuation, with supportive earnings call insights. Key strengths include robust revenue growth and a high dividend yield. However, financial stresses like declining net profit margin and negative cash flow, combined with bearish technical signals, temper the positive outlook. Strategic improvements in cash flow management and maintaining operational efficiency will be crucial for future performance.

Positive Factors

Dividends

The dividend yield is an attractive 11.3%, providing potential for a stable income stream.

Earnings

Blackstone Secured Lending (BXSL) reported another good quarter, driven by healthy credit, solid portfolio growth, and strong profitability.

Financial Performance

NAV/share increased to a record $27.39, driven by core earnings above the dividend.

Negative Factors

Credit Loss

BXSL experienced ~$0.16 of NAV loss primarily from credit marks, led by healthcare credit Navigator Acquiror (Newport Healthcare).

Repayment Issues

Repays have been anemic, as YTD numbers imply an avg. asset life of ~13 years.

Yield Pressure

Yield pressure muted top-line growth, resulting in core EPS being slightly below consensus.

Blackstone Secured Lending Fund (BXSL) vs. S&P 500 (SPY)

Market Cap

$6.46B

Dividend Yield10.86%

Average Volume (3M)1.65M

Price to Earnings (P/E)8.2

Beta (1Y)0.42

Revenue Growth15.77%

EPS Growth-4.88%

CountryUS

EmployeesN/A

SectorFinancial

Sector Strength76

IndustryAsset Management

Share Statistics

EPS (TTM)3.47

Shares Outstanding227,818,920

10 Day Avg. Volume2,839,902

30 Day Avg. Volume1,649,221

Financial Highlights & Ratios

PEG Ratio5.00

Price to Book (P/B)N/A

Price to Sales (P/S)10.91

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$33.00

Price Target Upside16.40% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering6

Blackstone Secured Lending Fund Business Overview & Revenue Model

Company DescriptionBlackstone Secured Lending Fund is business development company and a Delaware statutory trust formed on March 26, 2018, and structured as an externally managed, non-diversified closed-end investment Fund. On October 26, 2018, the fund elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940, as amended (the 1940 Act). In addition, the Fund elected to be treated for U.S. federal income tax purposes, as a regulated investment company (RIC), as defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code). The fund also intends to continue to comply with the requirements prescribed by the Code in order to maintain tax treatment as a RIC. The fund's investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation. The Fund seeks to achieve its investment objective primarily through originated loans, equity and other securities, including syndicated loans, of private U.S. companies, specifically small and middle market companies, typically in the form of first lien senior secured and unitranche loans (including first out/last out loans), and to a lesser extent, second lien, third lien, unsecured and subordinated loans and other debt and equity securities.

How the Company Makes MoneyBlackstone Secured Lending Fund makes money primarily through interest income and fees associated with its lending activities. The company generates revenue by providing secured loans to middle-market companies, which pay interest on the borrowed amounts. Additionally, BXSL may earn income through origination fees, prepayment penalties, and other loan-related charges. The company's financial performance is largely influenced by the credit quality of its portfolio, interest rate trends, and macroeconomic conditions. Partnerships and networks established by Blackstone Credit enhance BXSL's ability to source attractive investment opportunities, contributing to its revenue generation.

Blackstone Secured Lending Fund Financial Statement Overview

Summary

Blackstone Secured Lending Fund demonstrates robust revenue growth and operational efficiency with high EBIT margins. However, the decline in net profit margin and negative cash flow highlight potential financial stresses. The strong equity base and absence of debt reduce risk, but low ROE and negative free cash flow pose concerns. Continued focus on improving net income conversion and cash flow management is essential for sustained financial health.

Income Statement

Very Positive

The company has shown strong revenue growth with a 16% increase from 2023 to 2024. Gross profit margins remain solid at 100% due to the nature of the revenue model. However, net profit margin dropped significantly from 53.5% in 2023 to 1.1% in 2024, indicating increased expenses or other financial pressures. EBIT margin is exceptionally high at 99.4%, showcasing operational efficiency, but the absence of EBITDA data limits further analysis.

Balance Sheet

Positive

The balance sheet reflects a strong equity position with an equity ratio of 45.1%. The company has no total debt in 2024, highlighting a low-risk leverage profile. However, a return on equity of only 0.2% in 2024 signals inefficiency in generating profits from shareholders’ equity. The consistent growth in total assets is positive, but the low ROE is concerning.

Cash Flow

Positive

The cash flow statement shows volatility with negative operating cash flow in 2024, a reversal from positive cash flow in 2023. Free cash flow has declined significantly, reflecting potential liquidity challenges. The operating cash flow to net income ratio is negative, indicating cash flow issues relative to reported profits. The company must address these cash flow discrepancies to stabilize financial health.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.33B	1.14B	387.80M	473.35M	389.12M
	Gross Profit
1.33B	1.14B	236.61M	330.95M	323.18M
	EBIT
1.32B	937.12M	602.23M	462.86M	241.05M
	EBITDA
0.00	0.00	448.41M	0.00	251.46M
	Net Income Common Stockholders
14.52M	611.95M	404.56M	460.42M	218.64M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
229.61M	154.86M	131.27M	102.88M	217.99M
	Total Assets
13.47B	10.13B	9.91B	10.18B	5.95B
	Total Debt
0.00	4.91B	5.53B	5.50B	2.50B
	Net Debt
-229.61M	4.76B	5.40B	5.40B	2.28B
	Total Liabilities
7.40B	5.18B	5.75B	5.73B	2.68B
	Stockholders Equity
6.08B	4.95B	4.16B	4.45B	3.27B
Cash Flow		Free Cash Flow
-2.53B	458.81M	672.95M	-3.83B	-2.32B
	Operating Cash Flow
-2.53B	458.81M	672.95M	-3.83B	-2.32B
	Investing Cash Flow
0.00	0.00	212.41M	-4.09B	-2.45B
	Financing Cash Flow
2.60B	-432.16M	-648.18M	3.71B	2.47B

Blackstone Secured Lending Fund Technical Analysis

Technical Analysis Sentiment

Negative

Last Price28.35

Price Trends

50DMA

31.42

Negative

100DMA

31.37

Negative

200DMA

29.95

Negative

Market Momentum

MACD

-0.97

Positive

RSI

42.65

Neutral

STOCH

76.97

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BXSL, the sentiment is Negative. The current price of 28.35 is below the 20-day moving average (MA) of 29.92, below the 50-day MA of 31.42, and below the 200-day MA of 29.95, indicating a bearish trend. The MACD of -0.97 indicates Positive momentum. The RSI at 42.65 is Neutral, neither overbought nor oversold. The STOCH value of 76.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BXSL.

Blackstone Secured Lending Fund Risk Analysis

Blackstone Secured Lending Fund disclosed 106 risk factors in its most recent earnings report. Blackstone Secured Lending Fund reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Blackstone Secured Lending Fund Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARCC	76 Outperform	$13.96B	8.36	12.40%	9.65%	19.95%	-10.57%
BXSL	74 Outperform	$6.46B	8.23	12.59%	10.86%	15.77%	-4.88%
MAIN	74 Outperform	$4.60B	8.88	19.26%	5.77%	51.80%	12.05%
HTGC	65 Neutral	$3.01B	10.65	13.71%	9.33%	-1.49%	-29.48%
Sector *	63 Neutral	$12.07B	9.35	8.15%	79.57%	12.85%	-5.13%
FSK	58 Neutral	$5.44B	9.29	8.69%	14.71%	-16.13%	-15.88%
PNNT	47 Neutral	$397.65M	24.39	3.28%	15.44%	―	-66.59%

* Financial Sector Average

Performance Comparison

BXSL

Blackstone Secured Lending Fund

28.75

-0.14

-0.48%

HTGC

Hercules Capital

17.41

0.21

1.22%

MAIN

Main Street Capital

53.04

7.71

17.01%

PNNT

Pennantpark Investment

6.23

-0.04

-0.64%

ARCC

Ares Capital

20.40

1.42

7.48%

FSK

FS KKR Capital

19.41

2.48

14.65%

Blackstone Secured Lending Fund Earnings Call Summary

Earnings Call Date: Feb 26, 2025 | % Change Since: -14.56% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Positive

The earnings call highlighted a strong quarter with record total investment income, increased net asset value, and strong credit performance. However, there were some concerns with a decline in weighted average yield and a slow start in new M&A activity. Despite these challenges, the overall sentiment remains positive due to the firm's strong financial performance and strategic positioning.

Highlights

Record Total Investment Income

Blackstone Secured Lending Fund reported a record total investment income for the fourth quarter, with net investment income of $0.84 per share, representing a 12.3% annualized return on equity.

Increase in Net Asset Value

Net asset value per share increased for the ninth consecutive quarter by $0.12 to $27.39.

Strong Credit Performance

Credit quality remained strong with 0.3% of investments on nonaccrual cost, well below the average of traded BDC peers.

Successful New Debt Issuance

Issued nearly $1.2 billion of new debt through CLOs with a weighted average spread of 154 basis points over SOFR.

Increased Liquidity Position

Liquidity position increased to $2.4 billion, up from $1.1 billion last quarter, indicating strong deal flow expectations for 2025.

Strong Portfolio Performance

Portfolio companies showed growth rates in line or higher with the broader private credit market, with over 20% more profitability on an LTM EBITDA margin basis.

Lowlights

Decline in Weighted Average Yield

Weighted average yield on performing debt investments at fair value was 10.4% compared to 11.2% last quarter.

Slow Start for New M&A Activity

The start of the year is off to the slowest start since 2003 in terms of new M&A activity.

Minimal Repayments and Exits

Repayments were relatively light, with a 2024 repayment rate of 6% of the portfolio at fair value, compared to 10% for 2023.

Company Guidance

During the Blackstone Secured Lending Fund's fourth-quarter and full-year 2024 investor call, the company reported record total investment income with a net investment income (NII) of $0.84 per share, representing a 12.3% annualized return on equity. The fund's net asset value (NAV) per share increased for the ninth consecutive quarter by $0.12 to $27.39. Blackstone issued nearly $1.2 billion in new debt through CLOs and bonds at a weighted average spread of 154 basis points over SOFR and upsized revolving lines of credit by $850 million. The fund reported strong credit performance with only 0.3% of investments on nonaccrual cost and 0.2% at fair market value, well below the sector average. In the fourth quarter, Blackstone made $1.2 billion in investment commitments and $1.4 billion in new investment funding, with yields ranging between 8% to 10% and a three-year all-in spread of 520 basis points. The fund maintains a diverse liability profile and ended the quarter with $13.1 billion in investments at fair value, a 9% increase from the previous quarter, while increasing liquidity to $2.4 billion. The fund's dividend distribution remains steady at $0.77 per share. The company anticipates a positive M&A outlook for 2025, supported by improved cost of capital and favorable market conditions.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.