FS KKR Capital (FSK) AI Stock Analysis

• Market Cap: $4.94B
• Dividend Yield: 15.87%
• Average Volume (3M): 1.80M
• Price to Earnings (P/E): 22.7
• Beta (1Y): 0.46
• Revenue Growth: -8.32%
• EPS Growth: -65.56%
• Country: US
• Employees: 1,383
• Sector: Financial
• Sector Strength: 71
• Industry: Asset Management
• EPS (TTM): 0.60
• Shares Outstanding: 280,066,440
• 10 Day Avg. Volume: 3,539,102
• 30 Day Avg. Volume: 1,804,587
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.74
• Enterprise Value/Revenue: 12.48
• Enterprise Value/Gross Profit: 20.64
• Enterprise Value/Ebitda: 30.43
• 1Y Price Target: $18.25
• Price Target Upside: 3.46% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

• Rating: 58 Neutral
• Price Target: ―

FS KKR Capital's stock score reflects a cautious outlook. The primary concerns are the zero revenue reported, which signals significant operational challenges, and the mixed results from the earnings call. The strong cash flow and improved balance sheet provide some stability, and the attractive valuation offers potential for income-focused investors. However, technical indicators suggest caution as the stock may face downward pressure.

Positive Factors

Financial Performance

FSK reported adjusted NOI of $0.74, ahead of the $0.71 estimate, driven by higher fees and dividend income.

Management Strategy

Management maintained its positive view toward carrying a full spillover balance, citing the payout protection.

Portfolio Positioning

FSK's deep discount compared to the index may be well positioned to tighten as the portfolio turns.

Negative Factors

Credit Impacts

Net credit impacts totaled -$0.17, with deeper marks on some new challenged credits.

Joint Venture Performance

The COP JV delivered lower dividends, with a decrease to $48.6 million from $53.9 million sequentially.

Non-Accruals

Non-accruals were managed down, but two new names, Accuride and Tangoe, were added to the list.

FS KKR Capital Business Overview & Revenue Model

Company Description

FS KKR Capital Corp. is a business development company specializing in investments in debt securities. It provides customized credit solutions to private middle market U.S. companies. It invest primarily in the senior secured debt and, to a lesser extent, the subordinated debt of private middle market U.S. companies. It seeks to purchase interests in loans through secondary market transactions or directly from the target companies as primary market investments. It also seeks to invest in first lien senior secured loans, second lien secured loans and, to a lesser extent, subordinated loans, or mezzanine loans. In connection with the debt investments, the firm also receives equity interests such as warrants or options as additional consideration. It also seek to purchase minority interests in the form of common or preferred equity in our target companies, either in conjunction with one of the debt investments or through a co-investment with a financial sponsor. Additionally, on an opportunistic basis, the fund may also invest in corporate bonds and similar debt securities. The fund does not seek to invest in start-up companies, turnaround situations, or companies with speculative business plans. It seeks to invest in small and middle-market companies based in United States. The fund seeks to invest in firms with annual revenue between $10 million to $2.5 billion. It focus on providing customized one-stop credit solutions to private upper middle market companies with annual EBITDA of $50 million to $100 million at the time of investment. It seeks to exit from securities by selling them in a privately negotiated over- the- counter market. For any investments that are not able to be sold within the secondary market, the firm seeks to exit such investments through repayment, an initial public offering of equity securities, merger, sale or recapitalization.

How the Company Makes Money

FS KKR Capital makes money primarily through interest income and capital gains from its investment portfolio, which consists of debt and equity securities. The company earns interest income by providing loans to middle-market companies at various interest rates. These loans are typically structured as senior secured debt, offering FSK a higher claim on the borrower's assets in case of default. Additionally, FSK generates revenue from capital gains realized on the sale of equity investments. The company may also earn fee income through structuring fees, commitment fees, and other transaction-related fees associated with the origination and management of its investment portfolio. FSK benefits from its strategic partnership with KKR, a leading global investment firm, which provides access to extensive industry expertise, deal flow, and operational support.

FS KKR Capital Financial Statement Overview

Summary

FS KKR Capital exhibits a mixed financial profile. While the balance sheet and cash flow positions are strong, with no debt and robust cash flow generation, the income statement is concerning, showing zero revenue in the latest year. This indicates significant operational challenges that overshadow the company's liquidity and improved equity position.

Income Statement

The income statement shows a volatile revenue trajectory with an alarming drop to zero revenue in the most recent year. Gross profit margin cannot be assessed due to zero gross profit and revenue. Previous years showed declining net profit margin and significant fluctuations in EBIT and EBITDA margins, indicating instability in profitability.

Balance Sheet

FS KKR Capital's balance sheet reveals a strong equity base with a debt-free position in the latest year, which is beneficial for stability. The equity ratio has improved, reflecting a solid financial structure. However, previous years exhibited substantial debt levels, which could have posed risks if not managed properly.

Cash Flow

Cash flow analysis shows robust operating cash flows, particularly in the latest year, indicating strong cash generation capabilities. The free cash flow to net income ratio is favorable, but the operating cash flow to net income ratio is uncalculable due to zero net income in the latest year. Historical free cash flow growth is solid, enhancing the liquidity position.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.08B	1.11B	1.23B	1.64B	1.54B	149.00M
Gross Profit	656.00M	664.00M	1.07B	1.43B	1.08B	639.00M
EBITDA	445.00M	608.00M	721.00M	116.00M	7.16M	149.00M
Net Income	218.00M	585.00M	696.00M	92.00M	1.51B	-405.00M
Balance Sheet
Total Assets	14.59B	14.22B	15.47B	16.12B	17.23B	7.24B
Cash, Cash Equivalents and Short-Term Investments	244.00M	296.00M	231.00M	251.00M	377.00M	191.00M
Total Debt	0.00	7.35B	8.19B	8.69B	9.14B	4.00B
Total Liabilities	8.45B	7.60B	8.62B	9.11B	9.50B	4.14B
Stockholders Equity	6.14B	6.62B	6.85B	7.01B	7.73B	3.10B
Cash Flow
Free Cash Flow	749.00M	1.90B	1.38B	1.11B	-639.00M	675.00M
Operating Cash Flow	749.00M	1.90B	1.38B	1.11B	-639.00M	675.00M
Investing Cash Flow	-341.00M	0.00	0.00	99.00M	-1.02B	-35.00M
Financing Cash Flow	-870.00M	-1.84B	-1.40B	-1.23B	825.00M	-590.00M

FS KKR Capital Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 17.64
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FSK, the sentiment is Negative. The current price of 17.64 is below the 20-day moving average (MA) of 20.37, below the 50-day MA of 20.72, and below the 200-day MA of 20.25, indicating a bearish trend. The MACD of -0.97 indicates Positive momentum. The RSI at 21.28 is Positive, neither overbought nor oversold. The STOCH value of 10.26 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FSK.

FS KKR Capital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BXSL	74 Outperform	$6.90B	10.57	10.60%	10.28%	13.67%	-26.56%
MAIN	74 Outperform	$6.01B	11.06	19.65%	6.24%	28.32%	13.63%
GBDC	71 Outperform	$3.94B	10.46	9.33%	11.22%	32.19%	-13.72%
NMFC	65 Neutral	$1.10B	13.69	6.18%	12.64%	39.05%	-32.62%
HTGC	64 Neutral	$3.52B	12.84	12.81%	9.77%	-15.88%	-13.91%
Sector *	62 Neutral	AU$10.42B	9.87	13.11%	4.72%	32.06%	21.38%
FSK	58 Neutral	$4.94B	22.66	3.39%	15.87%	-8.32%	-65.56%

FS KKR Capital Corporate Events

FS KKR Capital Reports Q4 2024 Financial Results

FS KKR Capital Corp. announced its financial results for the fourth quarter and full year of 2024, highlighting a net investment income of $0.61 per share for the quarter and $2.90 per share for the year. The company declared a first quarter 2025 distribution of $0.70 per share, to be paid in April 2025. Despite a decrease in net asset value and earnings per share compared to previous quarters, the company maintains a strong liquidity position with $4.8 billion available, which is expected to support continued private market activity.

FS KKR Capital’s Co-President Takes Leave of Absence

On February 3, 2025, FS KKR Capital Corp. announced that Co-President Brian Gerson is taking a leave of absence. His responsibilities will be temporarily assumed by Co-President Daniel Pietrzak, who is also the Chief Investment Officer and a board member, along with other company officers, ensuring continuity in leadership and operations.