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Cion Investment Corp. (CION)
:CION

CION Investment Corp (CION) AI Stock Analysis

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CION Investment Corp

(NYSE:CION)

Rating:58Neutral
Price Target:
CION Investment Corp's overall stock score reflects strong revenue growth and efficient cost management, though tempered by high leverage and cash flow inconsistencies. The technical analysis shows bearish trends, suggesting caution. However, the attractive valuation with high dividend yield and positive earnings call sentiment provide a balanced outlook.
Positive Factors
Earnings
CION reported NOI of $0.36 per share, above the $0.32 estimate, indicating better-than-expected earnings performance.
Income Distribution
CION signaled confidence in its NOI trajectory, declaring another $0.36 distribution for the second quarter, which may appeal to income-focused investors.
Negative Factors
Credit Losses
CION's trailing five-year and four-year net credit losses averaging 147 bps and 137 bps, respectively, are above the group average, indicating higher credit loss risk.
Credit Risk
Relative to its peers, credit risk is above average with second lien, subordinated debt, CLOs, equity, and non-accruals totaling 16.8% of CION’s portfolio.

CION Investment Corp (CION) vs. SPDR S&P 500 ETF (SPY)

CION Investment Corp Business Overview & Revenue Model

Company DescriptionCION Investment Corporation is a business development company. It specializes in investments in senior secured loans, including unitranche loans, First Lien, second lien loans, long-term subordinated loans, and mezzanine loans; equity interests such as warrants or options; and corporate bonds; and other debt securities in middle-market companies. The firm invests in growth capital, acquisitions, leveraged buyouts, market/product expansion, refinancing and recapitalization. The fund also invests up to 30 percent of their assets opportunistically in other types of investments, including the securities of larger public companies and foreign securities. It also makes investments in the secondary loan market. The fund does not invest in start-up companies, turnaround situations, or companies with speculative business plans. The fund prefers to invest in high tech industries, healthcare, pharmaceuticals, business services, media, chemicals, plastic, rubber, telecommunication, consumer services, advertising, printing and publishing, consumer goods, durables, diversified financials, and other industries. It also invests in homebuilding, restaurants, beverage and tobacco bars, broadcasting, distributors, Non-durable good distribution, food beverage and tobacco, energy, oil gas and consumables fuels, insurance, aerospace and defense, industrial machinery, paper and forest product machinery, information technology, metals and mining, and real estate. It primarily seeks to invest in the United States. The fund seeks to invest between $5 million and $50 million in companies with an EBITDA between $25 million and $75 million with average targeted hold of $25 million. It also purchases minority interests in the form of common or preferred equity in the target companies, typically in conjunction with its debt investments or through a co-investment with a financial sponsor. The fund seeks to exit its investments through an initial public offering of common stock, a merger, a sale, or other recapitalization.
How the Company Makes MoneyCION Investment Corp generates revenue primarily through the interest income and fees earned on the loans it provides to middle-market companies. As a business development company, CION is required to distribute at least 90% of its taxable income to shareholders in the form of dividends, which means it focuses on generating consistent and high-interest income from its loan portfolio. The company may also earn money through capital gains on the sale of investments, though this is a secondary objective. CION's earnings are influenced by factors such as the credit quality of its borrowers, interest rate fluctuations, and overall economic conditions. The company may also engage in strategic partnerships or co-investments to enhance its investment opportunities and returns.

CION Investment Corp Financial Statement Overview

Summary
CION Investment Corp demonstrates strong revenue growth and efficient cost management, but faces challenges with high leverage and inconsistent cash flows. While profitability metrics show potential, the reliance on debt financing and cash flow volatility may pose risks to long-term stability.
Income Statement
67
Positive
CION Investment Corp has shown strong revenue growth with a significant increase from 2022 to 2023. The gross profit margin remains high at 100%, demonstrating efficient cost management. However, the net profit margin has shown inconsistency over the years, indicating volatility in net income relative to revenue. Despite this, EBIT margins are solid, pointing to effective operational management.
Balance Sheet
45
Neutral
The company shows a relatively high debt-to-equity ratio in recent years, indicating a higher reliance on debt financing, which could pose a financial risk. The equity ratio has decreased, reflecting a lower proportion of assets financed by equity. ROE has been positive, suggesting profitability from equity, but the high liabilities could be a concern for financial stability.
Cash Flow
55
Neutral
Operating cash flow has seen fluctuations, with significant negative cash flow in 2023, which may indicate operational challenges. Free cash flow has improved in the latest year, but historical volatility presents concerns. The operating cash flow to net income ratio suggests that cash flow generation is inconsistent compared to reported earnings.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
45.95M251.01M61.14M131.98M-2.20M
Gross Profit
45.95M251.01M11.72M90.89M-44.13M
EBIT
34.01M180.82M100.14M119.11M-11.02M
EBITDA
130.88M-9.71M0.000.000.00
Net Income Common Stockholders
33.90M95.31M50.14M118.76M-11.02M
Balance SheetCash, Cash Equivalents and Short-Term Investments
7.67M121.86M82.74M3.77M19.91M
Total Assets
1.95B2.00B1.87B1.78B1.61B
Total Debt
0.001.08B951.32M822.37M719.96M
Net Debt
-7.67M1.07B868.58M818.60M700.04M
Total Liabilities
1.12B1.12B988.78M852.17M736.54M
Stockholders Equity
820.81M879.56M883.63M930.51M878.26M
Cash FlowFree Cash Flow
88.19M-97.15M35.28M-49.25M198.73M
Operating Cash Flow
88.19M-97.15M35.28M-49.25M198.73M
Investing Cash Flow
0.000.00-487.95M-660.99M-282.00M
Financing Cash Flow
-88.94M22.83M43.69M33.11M-184.95M

CION Investment Corp Technical Analysis

Technical Analysis Sentiment
Negative
Last Price9.58
Price Trends
50DMA
9.86
Negative
100DMA
10.61
Negative
200DMA
10.81
Negative
Market Momentum
MACD
-0.06
Negative
RSI
45.07
Neutral
STOCH
23.30
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CION, the sentiment is Negative. The current price of 9.58 is below the 20-day moving average (MA) of 9.76, below the 50-day MA of 9.86, and below the 200-day MA of 10.81, indicating a bearish trend. The MACD of -0.06 indicates Negative momentum. The RSI at 45.07 is Neutral, neither overbought nor oversold. The STOCH value of 23.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CION.

CION Investment Corp Risk Analysis

CION Investment Corp disclosed 69 risk factors in its most recent earnings report. CION Investment Corp 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

CION Investment Corp Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
71
Outperform
$540.77M8.2613.17%6.54%-8.68%-3.76%
70
Neutral
$583.48M6.6818.92%7.58%69.53%60.29%
64
Neutral
$12.64B9.787.67%17015.08%12.23%-6.02%
61
Neutral
$570.38M11.516.70%10.92%12.83%-13.29%
58
Neutral
$504.75M15.47-1.88%15.03%2.30%-63.97%
58
Neutral
$653.94M-5.45%16.51%8.24%-207.60%
48
Neutral
$430.30M44.561.95%14.26%-66.59%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CION
CION Investment Corp
9.58
-1.30
-11.95%
GLAD
Gladstone Capital
26.13
5.85
28.85%
GAIN
Gladstone Investment
14.68
2.35
19.06%
PNNT
Pennantpark Investment
6.59
0.15
2.33%
TCPC
BlackRock TCP Capital
7.69
-1.64
-17.58%
CCAP
Crescent Capital BDC
15.39
-0.82
-5.06%

CION Investment Corp Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: -1.64%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed sentiment with notable achievements such as increased net investment income, strong credit performance, and strategic share repurchases. However, these are balanced by challenges like a decline in net asset value, decreased investment income, and macroeconomic uncertainties affecting valuations. The sentiment is balanced between positive and negative factors.
Q1-2025 Updates
Positive Updates
Quarterly Net Investment Income Increase
CION reported $0.36 in quarterly net investment income for the first quarter, covering the base dividend and representing a slight increase from the prior quarter.
Strong Portfolio Credit Performance
Non-accruals in the portfolio remain relatively low at 1.2% of the portfolio at fair value, and the credit performance of the portfolio is considered strong amidst a changing economic environment.
Share Repurchase Program
CION repurchased approximately 186,000 shares of common stock at an average price of $11.68 during the quarter.
New Investment Commitments
CION made approximately $65 million in new investment commitments across one new and 12 existing portfolio companies, with 94% being first lien loans.
Flexible and Strong Balance Sheet
CION ended the first quarter with over $1 billion in unencumbered assets, strong debt service capacity, and solid liquidity with over $60 million in cash and short-term investments.
Negative Updates
Net Asset Value Decline
Net asset value declined quarter over quarter to $14.28, down from $15.43 in the fourth quarter, due to fair value marks on a limited number of portfolio companies.
Decline in Investment Income
Total investment income was $56.1 million during the first quarter, a decrease of $1.8 million or about 3% quarter over quarter, driven by lower transaction fees and lower SOFR rates.
Tariff and Macro Uncertainty Impact
Tariff and macro uncertainties affected the mark-to-market price declines in the portfolio, especially impacting David's Bridal and Anthem Sports due to strategic business shifts.
Higher Net Debt to Equity Ratio
Net debt to equity ratio increased to 1.39 times from 1.27 times at the end of Q4, impacted by the NAV decrease and lower than expected repayment activity.
Company Guidance
During the first quarter of 2025, CION Investment Corporation reported a net investment income of $0.36 per share, covering their base dividend with a slight increase from the previous quarter. However, the net asset value (NAV) declined to $14.28 from $15.43, primarily due to fair value adjustments on certain portfolio companies like David's Bridal and Anthem Sports. The credit performance of the portfolio remained strong, with non-accruals at 1.2% of the portfolio at fair value. The company repurchased approximately 186,000 shares at an average price of $11.68, and 70% of the share repurchase program was completed by the end of the quarter. The portfolio, mostly focused on the U.S. middle market, had a weighted average yield of 12.1% on debt and other income-producing investments. Additionally, the net debt to equity ratio stood at 1.39x, and the company declared a second-quarter base distribution of $0.36 per share.

CION Investment Corp Corporate Events

Financial Disclosures
CION Investment Corp to Announce Q1 2025 Results
Neutral
Apr 2, 2025

CION Investment Corporation announced that it will release its financial results for the first quarter ended March 31, 2025, on May 8, 2025, before the markets open. The company will also hold an earnings conference call at 11:00 a.m. ET on the same day to discuss these results, with a webcast and recording available for those unable to attend the live call.

Private Placements and FinancingDividendsFinancial Disclosures
CION Investment Corp Reports Strong Q4 2024 Results
Positive
Mar 13, 2025

CION Investment Corporation reported strong financial results for the fourth quarter and year ending December 31, 2024, with net investment income of $1.79 and total shareholder distributions of $1.52. The company declared a first quarter 2025 base distribution of $0.36 per share. Despite a slight decrease in net asset value per share due to mark-to-market adjustments, CION maintained a robust investment portfolio and completed significant investment activities, including a public bond offering and a new credit facility agreement, enhancing its financial flexibility and shareholder returns.

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.