Fidus Investment (FDUS) AI Stock Analysis

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Fidus Investment

(NASDAQ:FDUS)

Rating:61Neutral

Price Target:―

Fidus Investment shows strengths in income growth and profitability, supported by a strong equity position and attractive valuation. However, weaknesses in cash flow management, technical indicators, and mixed earnings call results present challenges. The high dividend yield and strategic dividend announcements provide some positive sentiment.

Fidus Investment (FDUS) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$704.79M

Dividend Yield8.54%

Average Volume (3M)160.49K

Price to Earnings (P/E)8.6

Beta (1Y)0.52

Revenue Growth2.31%

EPS Growth-15.06%

CountryUS

EmployeesN/A

SectorFinancial

Sector Strength82

IndustryAsset Management

Share Statistics

EPS (TTM)0.54

Shares Outstanding35,011,880

10 Day Avg. Volume166,499

30 Day Avg. Volume160,487

Financial Highlights & Ratios

PEG Ratio-0.61

Price to Book (P/B)1.02

Price to Sales (P/S)0.00

P/FCF Ratio-18.99

Enterprise Value/Market Cap1.13

Enterprise Value/Revenue1.34

Enterprise Value/Gross Profit5.44

Enterprise Value/Ebitda-183.46

Forecast

1Y Price Target

$21.25

Price Target Upside5.56% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering4

Fidus Investment Business Overview & Revenue Model

Company DescriptionFidus Investment Corporation (FDUS) is a business development company that specializes in providing customized financing solutions to lower middle-market companies. Operating primarily in the United States, Fidus focuses on sectors such as manufacturing, business services, technology, healthcare, and more. The company's core services include debt and equity financing, which support the growth and development of its portfolio companies, thereby fostering a mutually beneficial partnership.

How the Company Makes MoneyFidus Investment Corporation makes money primarily through interest income, dividends, and capital gains. The company generates revenue by offering debt financing solutions such as senior secured loans, mezzanine debt, and unitranche loans to lower middle-market companies. These loans typically come with higher interest rates compared to traditional loans due to the increased risk associated with lending to smaller businesses. Additionally, Fidus invests in equity securities of its portfolio companies, which can lead to capital gains when these investments are sold at a profit. The company may also earn fee income from structuring and managing these investments. Fidus's earnings are influenced by factors such as interest rate fluctuations, the financial health of its portfolio companies, and overall economic conditions.

Fidus Investment Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 5.50%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

The earnings call highlights a strong portfolio performance with significant growth in assets under management and net asset value, along with a healthy dividend payout. However, these positive aspects are balanced by a decrease in investment income, challenges in the M&A market, and macroeconomic uncertainties, leading to a cautious outlook.

Q1-2025 Updates

Positive Updates

Increase in Assets Under Management

Assets under management increased by 6% to approximately $1.2 billion on a fair value basis as of March 31, 2025, compared to December 31, 2024.

Net Asset Value Growth

Net asset value grew to $677.9 million, or $19.39 per share at quarter end, compared to $655.7 million or $19.33 per share as of December 31, 2024.

Strong Dividend Performance

For Q1, dividends paid totaled $0.54 per share, consisting of a base dividend of $0.43 per share and a supplemental dividend of $0.11 per share. The same total dividend is declared for Q2 2025.

Healthy Portfolio Credit Quality

Portfolio companies on nonaccrual remain under 1% of the total portfolio on a fair value basis and 3.9% on a cost basis.

Successful Debt Issuance

Issued $100 million of 5-year unsecured debt with a 6.75% coupon, providing net proceeds of $96.9 million, improving liquidity position.

Negative Updates

Decrease in Total Investment Income

Total investment income decreased by $1 million from Q4 2024, mainly due to a $1.1 million decrease in interest income.

Decline in Net Investment Income Per Share

Net investment income per share was $0.53 in Q1, down from $0.55 in Q4 2024.

M&A Market Challenges

M&A activity in the lower middle market remained at modest levels with a lackluster trend due to market turbulence and uncertainty.

Exposure to Macroeconomic Challenges

There is concern about macroeconomic challenges, including tariff impacts, and a fluid macroeconomic environment affecting future performance.

Company Guidance

During the Fidus Investment Corporation's first quarter 2025 earnings call, management provided extensive guidance on the company's financial performance and strategic outlook. At quarter's end, assets under management reached approximately $1.2 billion, marking a 6% increase from December 31, 2024. The adjusted net investment income (NII) for Q1 2025 was $18.5 million, or $0.54 per share, compared to $18.1 million, or $0.59 per share, in Q1 2024. The net asset value (NAV) was $677.9 million, or $19.39 per share, up from $655.7 million, or $19.33 per share, at the end of 2024. The company declared a Q2 2025 dividend of $0.54 per share, consisting of a base dividend of $0.43 and a supplemental dividend of $0.11 per share. Originations for the quarter totaled $115.6 million, with $102.1 million invested in seven new portfolio companies. Fidus highlighted a diversified portfolio, with debt investments totaling approximately $1 billion, 79% of which were first lien investments, and an equity portfolio valued at $137.8 million. Despite macroeconomic challenges, including trade policy uncertainties, the company remains optimistic about its portfolio's resilience and future investment opportunities.

Fidus Investment Financial Statement Overview

Summary

Fidus Investment demonstrates strong revenue growth and profitability with a solid equity position. However, challenges in cash flow management and high debt levels warrant attention. Improvement in cash flow generation and managing leverage are crucial.

Income Statement

Positive

Fidus Investment has shown robust revenue growth, particularly from 2022 to 2023 with a significant jump in total revenue. The gross profit margin remains strong at 100% for the latest year, indicating effective cost management. However, there is a notable absence of EBITDA data for the latest period, which could be a potential area of concern for assessing operational efficiency. The net profit margin is high, reflecting strong profitability.

Balance Sheet

Positive

The company maintains a solid equity position with a high equity ratio, indicative of a strong balance sheet and lower financial risk. The debt-to-equity ratio is moderate, suggesting balanced leverage. However, there is a substantial amount of total debt that could pose risks if not managed carefully.

Cash Flow

Neutral

Fidus Investment has experienced fluctuating cash flows with negative operating cash flow in the recent period. The free cash flow remains negative, which could impact the company's ability to fund operations and investments. The operating cash flow to net income ratio suggests inefficiencies in converting income into cash flow.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
146.15M	154.18M	52.95M	127.25M	39.97M
	Gross Profit
146.15M	116.89M	28.90M	84.37M	18.47M
	EBIT
101.47M	102.60M	66.31M	118.67M	32.66M
	EBITDA
0.00	13.71M	-2.67M	0.00	-7.12M
	Net Income Common Stockholders
78.29M	77.13M	35.82M	116.10M	31.23M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
57.16B	119.13M	62.35M	169.42M	124.31M
	Total Assets
1.16B	1.09B	935.96M	897.18M	875.74M
	Total Debt
168.90B	466.51M	410.10M	366.04M	443.25M
	Net Debt
-57.16M	347.38M	347.75M	196.62M	318.94M
	Total Liabilities
508.45M	501.42M	455.62M	409.42M	464.98M
	Stockholders Equity
655.67M	589.47M	480.34M	487.76M	410.76M
Cash Flow		Free Cash Flow
-55.31M	-29.46M	-105.54M	167.90M	55.96M
	Operating Cash Flow
-55.31M	-29.46M	-105.54M	167.90M	55.96M
	Investing Cash Flow
0.00	0.00	-139.87B	126.05B	20.78M
	Financing Cash Flow
-6.67M	86.24M	-1.53M	-122.79M	53.33M

Fidus Investment Technical Analysis

Technical Analysis Sentiment

Positive

Last Price20.13

Price Trends

50DMA

19.50

Positive

100DMA

20.55

Negative

200DMA

19.72

Positive

Market Momentum

MACD

0.27

Negative

RSI

61.32

Neutral

STOCH

62.50

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FDUS, the sentiment is Positive. The current price of 20.13 is above the 20-day moving average (MA) of 19.61, above the 50-day MA of 19.50, and above the 200-day MA of 19.72, indicating a bullish trend. The MACD of 0.27 indicates Negative momentum. The RSI at 61.32 is Neutral, neither overbought nor oversold. The STOCH value of 62.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FDUS.

Fidus Investment Risk Analysis

Fidus Investment disclosed 80 risk factors in its most recent earnings report. Fidus Investment 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

Fidus Investment Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SLRC	71 Outperform	$895.79M	10.20	8.86%	9.99%	14.33%	25.35%
GLAD	70 Neutral	$583.48M	6.68	18.92%	7.58%	69.53%	60.29%
CGBD	67 Neutral	$1.01B	10.60	6.92%	13.32%	-11.85%	-3.73%
Sector *	64 Neutral	$12.67B	9.74	7.58%	17015.08%	12.21%	-6.96%
FDUS	61 Neutral	$704.79M	8.62	12.10%	8.54%	2.31%	-15.06%
CCAP	61 Neutral	$570.38M	11.51	6.70%	10.92%	12.83%	-13.29%
TCPC	58 Neutral	$653.94M	―	-5.45%	16.51%	8.24%	-207.60%

* Financial Sector Average

Performance Comparison

FDUS

Fidus Investment

20.37

2.58

14.50%

GLAD

Gladstone Capital

26.13

5.85

28.85%

SLRC

SLR Investment Corp.

16.42

1.78

12.16%

TCPC

BlackRock TCP Capital

7.88

-1.45

-15.54%

CGBD

TCG BDC

14.09

-1.93

-12.05%

CCAP

Crescent Capital BDC

15.39

-0.82

-5.06%

Fidus Investment Corporate Events

DividendsBusiness Operations and Strategy

Fidus Investment Announces Q1 2025 Dividends

Positive

Feb 18, 2025

On February 18, 2025, Fidus Investment Corporation announced a base dividend of $0.43 per share and a supplemental dividend of $0.11 per share for the first quarter of 2025, payable on March 27, 2025, to stockholders of record as of March 20, 2025. The dividends reflect Fidus’s ongoing strategy to distribute taxable income and enhance shareholder value, with the final tax attributes for 2025 dividends to be determined after the tax year. Fidus’s dividend reinvestment plan allows stockholders to reinvest dividends in additional shares unless they opt to receive cash, aligning with its focus on capital appreciation.

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.