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Main Street Capital Corp. (MAIN)
NYSE:MAIN
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Main Street Capital (MAIN) AI Stock Analysis

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MAIN

Main Street Capital

(NYSE:MAIN)

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Outperform 74 (OpenAI - 4o)
Rating:74Outperform
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 (MAIN) vs. SPDR S&P 500 ETF (SPY)

Main Street Capital Business Overview & Revenue Model

Company DescriptionMain 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 MoneyMain 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 Earnings Call Summary

Earnings Call Date:Aug 13, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong overall performance with record-setting achievements in NAV per share and realized gains. The company continues to excel in its lower middle market strategy and asset management business, leading to consistent dividend payouts. However, challenges persist in the private loan portfolio, particularly with consumer-facing companies and slower investment activity.
Q2-2025 Updates
Positive Updates
Record NAV per Share
The company achieved a new record for NAV per share for the 12th consecutive quarter, demonstrating sustainable strength in its platform.
Largest Realized Gain in History
Main Street Capital recorded the largest realized gain in its history due to a partial exit of investments in Heritage Vet Partners.
Annualized Return on Equity
Reported an annualized return on equity of 17.1%, showcasing strong operational performance.
Strong Dividend Performance
Supplemental dividend of $0.30 per share payable in September, representing the 16th consecutive quarterly supplemental dividend.
Increased Investment in Lower Middle Market
Net increase in lower middle market investments of $108 million, reflecting strong investment activity.
Positive Results in Asset Management Business
Significant incentive fee income for the asset management business for the 11th consecutive quarter.
Negative Updates
Underperformance in Private Loan Portfolio
Certain private loan portfolio companies with exposure to consumer discretionary spending have underperformed, impacting contributions negatively.
Decrease in Private Loan Investments
Private loan investment activity was slower than expected, resulting in a net decrease of $35 million due to lower private equity investment activity.
Investments on Nonaccrual Status
Investments on nonaccrual status were approximately 2.1% of the total investment portfolio at fair value and about 5% at cost.
Company Guidance
During Main Street Capital's Second Quarter 2025 Earnings Conference Call, management highlighted several key metrics demonstrating strong performance. The company achieved an annualized return on equity (ROE) of 17.1% and reported distributable net investment income (DNII) per share that exceeded the dividends paid to shareholders. This quarter marked the 12th consecutive record for net asset value (NAV) per share. Main Street also realized its largest gain in history, attributed to the partial exit of investments in Heritage Vet Partners. The lower middle market investment portfolio saw a net increase of $108 million, while the private loan portfolio experienced a net decrease of $35 million due to slower private equity industry activity. Management declared a supplemental dividend of $0.30 per share, payable in September, and regular monthly dividends for the fourth quarter of 2025 amounting to $0.255 per share, representing a 4% increase from the previous year. The company remains confident in its investment strategies and anticipates further significant supplemental dividends if favorable conditions persist.

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
75
Positive
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
80
Positive
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
65
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue650.24M541.03M401.93M384.61M344.66M222.61M
Gross Profit678.02M601.25M509.88M318.19M411.17M51.00M
EBITDA589.64M538.71M451.09M343.21M363.63M65.96M
Net Income506.77M508.08M428.45M241.61M330.76M29.38M
Balance Sheet
Total Assets5.29B5.12B4.44B4.24B3.69B2.77B
Cash, Cash Equivalents and Short-Term Investments86.98M78.25M60.08M49.12M32.63M31.92M
Total Debt2.22B2.12B1.80B2.00B1.80B1.21B
Total Liabilities2.40B2.32B1.97B2.13B1.90B1.25B
Stockholders Equity2.88B2.80B2.48B2.11B1.79B1.51B
Cash Flow
Free Cash Flow377.74M-87.12M285.32M-246.94M-515.37M-54.08M
Operating Cash Flow377.74M-87.12M285.32M-246.94M-515.37M-54.08M
Investing Cash Flow-72.71M0.00-84.56M680.02M1.05B478.01M
Financing Cash Flow-243.05M105.29M-274.36M263.43M516.08M30.76M

Main Street Capital Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price63.75
Price Trends
50DMA
64.76
Negative
100DMA
60.70
Positive
200DMA
57.85
Positive
Market Momentum
MACD
-0.20
Positive
RSI
43.30
Neutral
STOCH
21.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MAIN, the sentiment is Neutral. The current price of 63.75 is below the 20-day moving average (MA) of 65.25, below the 50-day MA of 64.76, and above the 200-day MA of 57.85, indicating a neutral trend. The MACD of -0.20 indicates Positive momentum. The RSI at 43.30 is Neutral, neither overbought nor oversold. The STOCH value of 21.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MAIN.

Main Street Capital Risk Analysis

Main Street Capital disclosed 60 risk factors in its most recent earnings report. Main Street Capital 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

Main Street Capital Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
4.19B11.358.92%16.78%
75
Outperform
717.10M7.9613.77%13.19%-18.24%
74
Outperform
$5.62B10.3619.65%6.09%28.32%13.63%
71
Outperform
3.67B9.7211.97%32.19%-13.72%
64
Neutral
3.47B12.6713.07%9.89%-15.88%-13.91%
58
Neutral
4.25B19.5018.46%-8.32%-65.56%
68
Neutral
$18.00B11.429.92%3.81%9.73%1.22%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MAIN
Main Street Capital
63.75
17.15
36.80%
HTGC
Hercules Capital
19.11
1.31
7.36%
NMFC
New Mountain Finance
9.72
-0.89
-8.39%
PNNT
Pennantpark Investment
6.68
0.59
9.69%
FSK
FS KKR Capital
15.17
-1.95
-11.39%
BXSL
Blackstone Secured Lending Fund
26.99
-0.26
-0.95%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Apr 22, 2025