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MidCap Financial Investment Corporation (MFIC)
NASDAQ:MFIC
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MidCap Financial Investment Corporation
(NASDAQ:MFIC)
69Neutral
Positive Factors
Financial Performance
MFIC reported NOI of $0.44, above the $0.41 estimate, largely due to lower incentive fees.
Valuation Improvement
Merx' valuation improved as it paid down its revolver by $7.5 million.
Negative Factors
Credit Loss
Credit loss appeared to stem from Surf OpCo, which is now marked in the 80s of cost.
Leverage Risk
Elevated leverage with CLO financing may add risk to the story.
MidCap Financial Investment Corporation (MFIC) vs. S&P 500 (SPY)
Market Cap
N/A
Dividend Yield13.22%
Average Volume (3M)671.35K
Price to Earnings (P/E)9.1
Beta (1Y)0.72
Revenue Growth37.04%
EPS Growth16.88%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength78
IndustryAsset Management
Share Statistics
EPS (TTM)1.30
Shares Outstanding93,780,280
10 Day Avg. Volume524,819
30 Day Avg. Volume671,352
Financial Highlights & Ratios
PEG Ratio0.56
Price to Book (P/B)N/A
Price to Sales (P/S)30.98
Price to Cash Flow (P/CF)5.60
P/FCF Ratio5.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$14.58Price Target Upside26.78% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
MidCap Financial Investment Corporation Business Overview & Revenue Model
Company DescriptionMidCap Financial Investment Corporation (MFIC) is a specialty finance company that provides customized debt solutions to middle-market companies across various sectors. The company primarily focuses on direct origination of senior secured loans. MFIC operates as a business development company, offering capital solutions to companies that may not have access to traditional bank financing.
How the Company Makes MoneyMidCap Financial Investment Corporation makes money by providing loans and other credit solutions to middle-market companies. The primary revenue stream comes from the interest income generated on these loans. Additionally, MFIC may earn fees associated with the origination, structuring, and management of these loans. The company's earnings are influenced by factors such as interest rate fluctuations, credit risk management, and strategic partnerships with other financial institutions that may co-invest in loan opportunities.
MidCap Financial Investment Corporation Financial Statement Overview
Summary
MidCap Financial Investment Corporation presents a mixed financial profile. The income statement reflects robust profitability but declining revenue. The balance sheet is strong with zero debt, yet this could limit expansion. Cash flow challenges are evident with a steep drop in free cash flow. While the company maintains profitability, addressing revenue declines and improving cash flow are crucial for future growth.Income Statement
MidCap Financial Investment Corporation shows a positive net profit margin of 89.07% in the TTM, reflecting strong profitability. However, the revenue growth rate is negative at -8.91% from the previous year, indicating a decline in revenue. The EBIT margin stands at 69.91%, showcasing efficient operations. Overall, the company demonstrates solid profitability but faces challenges with revenue growth.65
Positive
Balance Sheet
The company has a strong equity base with zero total debt in the TTM, resulting in a debt-to-equity ratio of 0. The return on equity is high at 7.63%, indicating effective use of equity to generate profits. The equity ratio is 44.04%, suggesting a balanced asset financing structure. While the lack of debt offers stability, it may limit growth opportunities.70
Positive
Cash Flow
MFIC's free cash flow growth rate is negative at -92.81% in the TTM, indicating a significant decline in free cash flow. The operating cash flow to net income ratio is 0.13, suggesting that cash generation is lagging behind income. These metrics highlight potential liquidity challenges despite positive net income.58
Neutral
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 121.28M | 133.15M | 141.46M | 96.72M | 126.73M | -95.79M | Gross Profit |
| 141.99M | 276.50K | 94.06M | 96.72M | 85.92M | -191.58M | EBIT |
| 84.77M | 266.40K | 103.47M | 137.38M | 111.86M | -116.06M | EBITDA |
| 33.26M | 266.40K | 103.47M | 137.38M | 111.86M | -116.06M | Net Income Common Stockholders |
| 108.02M | 118.76M | 30.59M | 82.36M | 111.86M | -116.06M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 487.58M | 122.13M | 87.09M | 30.60M | 54.62M | 43.68M | Total Assets |
| 3.47B | 2.50B | 2.53B | 2.60B | 2.54B | 2.87B | Total Debt |
| 1.06B | 1.46B | 1.48B | 1.55B | 1.47B | 1.79B | Net Debt |
| 573.03M | 1.34B | 1.40B | 1.52B | 1.41B | 1.75B | Total Liabilities |
| 1.69B | 1.50B | 1.54B | 1.60B | 1.51B | 1.85B | Stockholders Equity |
| 1.77B | 1.01B | 988.11M | 1.00B | 1.04B | 1.02B |
| Cash Flow | Free Cash Flow | ||||
| 14.12M | 196.38M | 76.07M | -2.68M | 470.67M | -482.46M | Operating Cash Flow |
| 14.12M | 196.38M | 76.07M | -2.68M | 470.67M | -482.46M | Investing Cash Flow |
| 0.00 | 80.19M | 82.32M | 0.00 | 373.36M | -610.04M | Financing Cash Flow |
| 27.54M | -161.36M | -101.91M | -21.33M | -459.70M | 484.89M |
MidCap Financial Investment Corporation Technical Analysis
Negative
11.50
Price Trends
13.29
Negative
13.20
Negative
13.07
Negative
Market Momentum
-0.09
Negative
42.37
Neutral
54.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MFIC, the sentiment is Negative. The current price of 11.5 is below the 20-day moving average (MA) of 12.81, below the 50-day MA of 13.29, and below the 200-day MA of 13.07, indicating a bearish trend. The MACD of -0.09 indicates Negative momentum. The RSI at 42.37 is Neutral, neither overbought nor oversold. The STOCH value of 54.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MFIC.
MidCap Financial Investment Corporation Risk Analysis
MidCap Financial Investment Corporation disclosed 84 risk factors in its most recent earnings report. MidCap Financial Investment Corporation 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
MidCap Financial Investment Corporation Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $13.67B | 8.19 | 12.40% | 9.61% | 19.95% | -10.57% | |
74 Outperform | $4.56B | 8.80 | 19.26% | 5.83% | 51.80% | 12.05% | |
72 Outperform | $1.24B | 19.32 | 3.96% | 15.77% | -28.04% | -69.52% | |
69 Neutral | 9.07 | 8.20% | 13.22% | 37.04% | 16.88% | ||
63 Neutral | $12.86B | 9.17 | 9.14% | 4.78% | 16.41% | -10.11% | |
63 Neutral | $1.64B | ― | 0.78% | 17.43% | -31.63% | -0.75% | |
58 Neutral | $602.35M | ― | -8.57% | 17.94% | 8.24% | -207.60% |
* Financial Sector Average
Performance Comparison
MFIC
MidCap Financial Investment Corporation
11.50
-1.66
-12.61%
MAIN
Main Street Capital
51.48
7.26
16.42%
PSEC
Prospect Capital
3.70
-1.10
-22.92%
ARCC
Ares Capital
19.97
1.20
6.39%
TCPC
BlackRock TCP Capital
7.08
-1.59
-18.34%
GSBD
Goldman Sachs BDC
10.59
-2.41
-18.54%
MidCap Financial Investment Corporation Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: -16.91% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong ROE, successful CLO pricing, and significant new commitments as positive aspects. However, challenges such as a decrease in NAV per share, a decline in weighted average yield, and issues with non-accrual investments were also noted. Overall, the sentiment of the call was balanced with both positive achievements and notable challenges.Highlights
Strong Annualized Return on Equity (ROE)
MFIC reported an annualized ROE of 10.5% for the December quarter and 11.2% for the full year.
Significant New Commitments
MFIC made $255 million in new commitments during the December quarter and $1.06 billion for the full year.
Successful CLO Pricing
MFIC priced a $529 million CLO, the second on-balance-sheet CLO, with a blended cost of 161 basis points spread, significantly tighter than previous levels.
Merx Insurance Claims Settlement
MFIC settled a portion of its contingent insurance claims related to the Merx Russia fleet during the first quarter.
Dividend Declaration
The Board declared a quarterly dividend of $0.38 per share for shareholders of record as of March 11th, 2025.
Lowlights
Decrease in NAV per Share
Net Asset Value (NAV) per share decreased to $14.98 at the end of December, down $0.12 or approximately 0.8%.
Decline in Weighted Average Yield
The weighted average yield at cost on the direct origination portfolio decreased to 11% for the December quarter from 11.6% in the September quarter.
Non-Accrual Investments
Investments on non-accrual were 1.3% of the portfolio at fair value, with some positions acquired from the CEFs still on non-accrual.
GAAP Net Income Per Share
GAAP net income per share was $0.26 for the December quarter, lower than the net investment income per share of $0.40.
Company Guidance
In the earnings conference call for MidCap Financial Investment Corporation (MFIC) covering the fourth quarter of 2024, several key metrics were discussed. The company reported a net investment income (NII) per share of $0.40 for the quarter and $1.71 for the full year, with a quarterly annualized return on equity (ROE) of 10.5% and a yearly ROE of 11.2%. GAAP net income per share was $0.26 for the quarter and $1.27 for the year. The NAV per share declined by $0.12 to $14.98, representing a 0.8% decrease. During the quarter, MFIC made $255 million in new commitments, contributing to a full year total of $1.06 billion. The company aims to reach a target leverage of approximately 1.4 times in the next few quarters, leveraging its affiliation with MidCap Financial, which closed $6.6 billion in commitments in the fourth quarter and $21.3 billion for the year. MFIC's investment in Merx, an aircraft leasing business, was valued at $183 million, with a blended yield of 3.2% at fair value. The call also highlighted the economic backdrop for 2025, noting strong consumer spending and a low probability of recession, while addressing risks like tariffs and federal layoffs. The company declared a quarterly dividend of $0.38 per share, payable in March 2025.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.