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Fidus Investment Corporation (FDUS)
NASDAQ:FDUS

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)

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
71
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
65
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
58
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.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
146.15M154.18M52.95M127.25M39.97M
Gross Profit
146.15M116.89M28.90M84.37M18.47M
EBIT
101.47M102.60M66.31M118.67M32.66M
EBITDA
0.0013.71M-2.67M0.00-7.12M
Net Income Common Stockholders
78.29M77.13M35.82M116.10M31.23M
Balance SheetCash, Cash Equivalents and Short-Term Investments
57.16B119.13M62.35M169.42M124.31M
Total Assets
1.16B1.09B935.96M897.18M875.74M
Total Debt
168.90B466.51M410.10M366.04M443.25M
Net Debt
-57.16M347.38M347.75M196.62M318.94M
Total Liabilities
508.45M501.42M455.62M409.42M464.98M
Stockholders Equity
655.67M589.47M480.34M487.76M410.76M
Cash FlowFree Cash Flow
-55.31M-29.46M-105.54M167.90M55.96M
Operating Cash Flow
-55.31M-29.46M-105.54M167.90M55.96M
Investing Cash Flow
0.000.00-139.87B126.05B20.78M
Financing Cash Flow
-6.67M86.24M-1.53M-122.79M53.33M

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
71
Outperform
$895.79M10.208.86%9.99%14.33%25.35%
70
Neutral
$583.48M6.6818.92%7.58%69.53%60.29%
67
Neutral
$1.01B10.606.92%13.32%-11.85%-3.73%
64
Neutral
$12.67B9.747.58%17015.08%12.21%-6.96%
61
Neutral
$704.79M8.6212.10%8.54%2.31%-15.06%
61
Neutral
$570.38M11.516.70%10.92%12.83%-13.29%
58
Neutral
$653.94M-5.45%16.51%8.24%-207.60%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
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.