Main Street Capital (MAIN) AI Stock Analysis

• Market Cap: $5.83B
• Dividend Yield: 6.37%
• Average Volume (3M): 436.14K
• Price to Earnings (P/E): 11.1
• Beta (1Y): 0.62
• Revenue Growth: 51.80%
• EPS Growth: 12.05%
• Country: US
• Employees: 104
• Sector: Financial
• Sector Strength: 72
• Industry: Asset Management
• EPS (TTM): 1.01
• Shares Outstanding: 89,029,360
• 10 Day Avg. Volume: 478,207
• 30 Day Avg. Volume: 436,145
• PEG Ratio: 12.74
• Price to Book (P/B): 1.99
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 535.95
• Enterprise Value/Market Cap: 1.34
• Enterprise Value/Revenue: 3.07
• Enterprise Value/Gross Profit: 14.27
• Enterprise Value/Ebitda: 3.77
• 1Y Price Target: $57.00
• Price Target Upside: -13.07% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 74 Outperform
• Price Target: ―

Main Street Capital is on a strong growth trajectory with solid financial performance and attractive valuation. Key strengths include robust revenue growth, strong equity position, and high dividend yield. However, technical indicators suggest caution, and cash flow issues need addressing. The company's positive earnings call supports future optimism despite some noted challenges.

Main Street Capital Business Overview & Revenue Model

Company Description

Main Street Capital Corporation is a business development company specializes in equity capital to lower middle market companies. The firm specializing in recapitalizations, management buyouts, refinancing, family estate planning, management buyouts, refinancing, industry consolidation, mature, later stage emerging growth. The firm also provides debt capital to middle market companies for acquisitions, management buyouts, growth financings, recapitalizations and refinancing. The firm seeks to partner with entrepreneurs, business owners and management teams and generally provides one stop financing alternatives within its lower middle market portfolio. It prefers to invest in air freight and logistics, auto components, building products, chemicals, commercial services, computers, construction and engineering, consumer finance, consumer services, electronic equipment, energy equipment and services, financial services, health care equipment, health care providers, hotels, restaurants, and leisure, internet software and services, IT Services, machinery, oil, gas and consumable fuels, paper and forest products, professional and industrial services, road and rail, software, specialty retail, telecommunication, consumer discretionary, energy, materials, technology, and transportation. The firm typically invests in lower middle market companies generally with annual revenues between $5 million and $300 million. It prefers to invest in ranging between $2 million and $75 million in equity investment and enterprise value in ranging between $3 million and $20 million. The firm typically prefers to invest in the range of $5 million and $50 million per transaction in debt investment value and in the range of $1 million and $20 million in annual EBITDA. The firm's middle market debt investments are made in businesses that are generally larger in size than its lower middle market portfolio companies. It takes 5 percent minority and up to 50 percent majority equity investments. Main Street Capital Corporation was founded in 2007 and is based in Houston, Texas with an additional office in Chojnów, Poland.

How the Company Makes Money

Main Street Capital makes money primarily through interest income and capital gains from its investment portfolio. The company generates revenue by providing debt financing solutions, such as first lien, second lien, and mezzanine loans, to lower middle market companies. Additionally, Main Street Capital takes equity positions in these companies, allowing it to benefit from capital appreciation and dividends. The firm also earns income from its asset management operations, which include management fees and performance-based incentives from managing investment funds or separate accounts for third parties. Key factors contributing to its earnings include the performance of its portfolio companies, interest rates, and the broader economic environment affecting small and medium-sized businesses.

Main Street Capital Financial Statement Overview

Summary

Main Street Capital shows strong revenue growth and profitability with robust margins. The balance sheet is solid with strong equity and no debt. However, cash flow issues are evident with negative operating cash flows, indicating potential cash management challenges.

Income Statement

The company has shown strong revenue growth over the years, with a significant increase from $50.1 million in 2020 to $541 million in 2024. The gross profit margin is consistently at 100%, which is typical for asset management firms due to the nature of their revenue recognition. However, the net profit margin is not calculable for 2024 due to missing net income data. EBIT margins are robust, reflecting efficient cost management, but the lack of EBITDA data limits full profitability analysis.

Balance Sheet

The balance sheet is solid, with a strong equity base and a debt-free status in 2024, reflecting reduced leverage from previous years. The equity ratio has improved, indicating financial stability and a strong asset base. There is a significant increase in cash reserves, contributing to a healthier liquidity position. However, the absence of debt-to-equity calculations for 2024 limits full leverage analysis.

Cash Flow

The cash flow statement shows fluctuations with negative operating cash flows in recent years, which could indicate potential cash management issues. Despite this, the company has a strong investing cash flow, likely from asset sales or investments. The free cash flow turned negative in 2024 compared to previous positive figures, suggesting potential operational cash strains.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	724.68M	500.38M	396.46M	344.66M	51.00M
Gross Profit	601.25M	401.93M	318.19M	289.05M	51.00M
EBITDA	538.71M	451.09M	264.93M	363.63M	15.84M
Net Income	508.08M	428.45M	241.61M	330.76M	29.38M
Balance Sheet
Total Assets	5.12B	4.44B	4.24B	3.69B	2.77B
Cash, Cash Equivalents and Short-Term Investments	78.25M	60.08M	49.12M	32.63M	31.92M
Total Debt	2.12B	1.81B	2.00B	1.80B	1.21B
Total Liabilities	2.32B	1.97B	2.13B	1.90B	1.25B
Stockholders Equity	2.80B	2.48B	2.11B	1.79B	1.51B
Cash Flow
Free Cash Flow	-87.12M	285.32M	-246.94M	-515.37M	-54.08M
Operating Cash Flow	-87.12M	285.32M	-246.94M	-515.37M	-54.08M
Investing Cash Flow	0.00	0.00	680.02M	1.05B	478.01M
Financing Cash Flow	105.29M	-274.36M	263.43M	516.08M	30.76M

Main Street Capital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 65.57
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MAIN, the sentiment is Positive. The current price of 65.57 is above the 20-day moving average (MA) of 62.24, above the 50-day MA of 58.58, and above the 200-day MA of 54.98, indicating a bullish trend. The MACD of 2.01 indicates Negative momentum. The RSI at 81.11 is Negative, neither overbought nor oversold. The STOCH value of 81.25 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MAIN.

Main Street Capital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AB	76 Outperform	$4.62B	11.27	18.55%	7.79%	―	53.17%
NCDL	75 Outperform	$855.29M	9.06	10.56%	12.40%	37.08%	-2.29%
MAIN	74 Outperform	$5.83B	11.11	19.31%	6.37%	51.80%	12.05%
GBDC	71 Outperform	$4.12B	13.77	8.88%	10.72%	16.10%	-24.30%
HTGC	70 Outperform	$3.42B	14.63	11.30%	9.78%	-7.29%	-38.60%
Sector *	64 Neutral	$6.69B	10.23	7.22%	190.13%	24.15%	5.15%
FSK	58 Neutral	$6.26B	11.77	7.97%	12.57%	-16.13%	-15.88%