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MidCap Financial Investment Corporation (MFIC)
NASDAQ:MFIC
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MidCap Financial Investment Corporation
(NASDAQ:MFIC)
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Rating:49Neutral
Price Target:
$10.50
▼(-0.28% Downside)
Action:ReiteratedDate:02/27/26
The score is held down primarily by weak and inconsistent financial quality (recent cash flow negatives and a materially weak latest period) and bearish technicals (downtrend with negative MACD). Offsetting factors include supportive valuation (low P/E and high yield) and a mixed but action-oriented earnings call emphasizing buybacks and balance-sheet/capital-allocation discipline despite NAV pressure and credit markdowns.
Positive Factors
Portfolio Composition & Seniority
A predominantly first‑lien, sponsor‑backed portfolio across many borrowers and industries materially reduces loss severity and idiosyncratic risk. High covenant incidence and mid‑market underwriting support steadier contractual cash flows and better recovery prospects over credit cycles.
Disciplined Capital Allocation
An active, opportunistic buyback program at meaningful discounts demonstrates management discipline and is a durable lever to enhance per‑share NAV when market discounts persist. Executed repurchases show willingness to redeploy capital to shareholders rather than maintain excess cash.
Improving Credit Metrics & Funding Costs
Lower non‑accruals and reduced funding costs improve net investment income sustainability. Persistently wide origination spreads relative to funding cost provide structural yield cushion, supporting coupon income even amid spread compression and enhancing long‑term distributable earnings potential.
Negative Factors
Erratic Cash Generation
Repeated negative operating and free cash flow in recent years undermines internal funding for dividends, buybacks, and debt amortization. Persistent cash volatility reduces financial flexibility, forcing reliance on external funding or asset sales during stress, which can damage long‑term payout reliability.
Elevated Leverage
Consistently elevated leverage amplifies earnings volatility and increases refinancing and covenant risk in downturns. Material debt levels constrain strategic flexibility, raise sensitivity to credit losses or funding cost increases, and limit the firm's ability to absorb prolonged income or NAV pressure.
Legacy Markdowns & Concentrated Credit Hits
Concentrated markdowns from older vintages and recent non‑accrual placements show lingering legacy credit risk that can depress NAV and realized returns. Such concentrated losses impair investor confidence and can necessitate tighter underwriting or reduced distributions until credit trends clearly normalize.
MidCap Financial Investment Corporation (MFIC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
N/A
Dividend Yield13.35%
Average Volume (3M)640.68K
Price to Earnings (P/E)10.1
Beta (1Y)0.63
Revenue Growth-12.06%
EPS Growth-31.14%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)0.39
Shares Outstanding93,303,620
10 Day Avg. Volume652,144
30 Day Avg. Volume640,679
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap10.00T>
Enterprise Value/Revenue62.66
Enterprise Value/Gross Profit9.28
Enterprise Value/Ebitda8.84
Forecast
1Y Price Target
$12.00Price Target Upside13.96% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)1.42
Revenue Forecast (FY)$301.52M
MidCap Financial Investment Corporation Business Overview & Revenue Model
Company DescriptionApollo Investment Corporation is business development company and a closed-end, externally managed, non-diversified management investment company. It is elected to be treated as a business development company (BDC) under the Investment Company Act of 1940 (the 1940 Act) specializing in private equity investments in leveraged buyouts, acquisitions, recapitalizations, growth capital, refinancing and private middle market companies. It provides direct equity capital, mezzanine, first lien secured loans, stretch senior loans, unitranche loans, second lien secured loans and senior secured loans, unsecured debt, and subordinated debt and loans. It also seeks to invest in PIPES transactions. The fund may also invest in securities of public companies that are thinly traded and may acquire investments in the secondary market and structured products. It prefers to invest in preferred equity, common equity / interests and warrants and makes equity co-investments. It may invest in cash equivalents, U.S. government securities, high-quality debt investments that mature in one year or less, high-yield bonds, distressed debt, non-U.S. investments, or securities of public companies that are not thinly traded. It also focuses on other investments such as collateralized loan obligations (CLOs) and credit-linked notes (CLNs). The fund typically invests in construction and building materials, business services, plastics & rubber, advertising, capital equipment, education, cable television, chemicals, consumer products/goods durable and non-durable and customer services, direct marketing, energy oil & gas, electricity and utilities. The fund also invest in aerospace & defense, wholesale, telecommunications, financial services, hotel, gaming, leisure, restaurants; environmental industries, healthcare and pharmaceuticals, high tech industries, beverages, food and tobacco, manufacturing, media diversified & production, printing and publishing, retail, automation, aviation and consumer transport, transportation, cargo and distribution. It primarily invests in United States. It primarily invests between $20 million and $250 million in its portfolio companies. The fund seeks to make investments with stated maturities of five to 10 years.
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 Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Neutral
The call presents a mix of constructive portfolio and capital‑allocation actions (large, opportunistic buyback authorization; disciplined first‑lien, sponsor‑backed portfolio; improving non‑accruals; lower cost of debt) alongside material near‑term headwinds (quarterly GAAP and portfolio losses, NAV down 3.3%, yield compression, several non‑accruals and one‑time financing losses). Management has taken proactive steps to support shareholder value (aggressive repurchases, dividend reset, balance sheet actions) but recent realized losses and legacy credit markdowns temper near‑term results. Overall, the tone is pragmatic and action‑oriented, with both meaningful positives and notable challenges.Q4-2025 Updates
Positive Updates
New and Expanded Share Repurchase Authorization
Board authorized a new $100.0M stock repurchase plan (in addition to ~$7.9M remaining under prior authorization), bringing total repurchase capacity to $107.9M; repurchased ~1.1M shares in the quarter at an average discount of 18%, generating approximately $0.03 per share of NAV accretion.
Dividend Declared After Reassessment
Board declared a quarterly dividend of $0.31 per share (record March 10, payable March 26) following a reassessment of long-term earning power given lower base rates and spread compression.
Portfolio Size, Diversification and First‑Lien Focus
Portfolio fair value of $3.17B invested across 247 companies and 46 industries; 99% first lien and 92% sponsor‑backed (direct origination), average funded position $12.8M, median EBITDA ~ $50M, and 94% of deals with one or more covenants.
Active New Commitments and Net Fundings
Made $141M of new commitments across 26 transactions in the quarter (weighted average spread 497 bps, weighted avg net leverage on new commitments 4.0x); gross fundings (ex revolvers & Merx) $156M, sales/repayments $119M, net funded activity +$25M.
Improved Credit Metrics / Decline in Non‑Accruals
Investments on non‑accrual declined to 2.6% of portfolio fair value from 3.1% QoQ; weighted average interest coverage improved to 2.3x (from 2.2x); borrower net leverage stable at 5.29x.
Low and Carefully Underwritten Software Exposure
Software represents 11.4% of portfolio (well below BDC industry average); primarily cash‑pay, 100% first lien, diversified across 29 borrowers, average position ~$12M, average LTV 32%, weighted average net leverage ~4.6x and weighted average spread ~548 bps.
Reduction in Cost of Debt and Lower Expenses
Cost of debt declined to 5.95% from 6.37% QoQ (down ~42 bps); net expenses fell to $42.4M, down $4.9M or 10.4% QoQ, driven by absence of incentive fees and lower interest expense.
Merx Recoveries and Ongoing Realizations
Merx repayment activity: $7.5M paydown during quarter and an additional $22M repaid after quarter-end (total $29.5M); Merx fair value ~$103M (3% of portfolio) with servicing business representing ~29% of Merx value at quarter end.
Negative Updates
Quarterly GAAP Loss and Portfolio Mark‑to‑Market Pressure
GAAP net loss per share was $0.14 for the quarter (or $0.10 excluding ~$0.04 per share of one‑time financing costs); NAV per share declined 3.3% QoQ to $14.18, driven by a handful of older vintage investments (predominantly 2022 and earlier).
Portfolio Net Loss and Specific Credit Loss Contributors
Portfolio net loss of approximately $45.3M (≈ $0.49 per share). Three investments placed on non‑accrual in the quarter—Bird Rides, Banner Solutions, and Renovo—accounted for ~36% of the total net loss for the quarter.
Decline in Investment Income and Yield Compression
Total investment income was $78.4M, down $4.2M or 5.1% QoQ; weighted average yield at cost of directly originated portfolio fell to 10.0% from 10.3% QoQ and weighted average spread on direct lending was 546 bps (down 13 bps QoQ).
Realized Financing Loss and One‑Time Costs
Recorded a realized loss of approximately $3.4M (≈ $0.04 per share) related to refinancing activity (extension/repricing of revolver and repricing/upsizing of CLO) which contributed to one‑time financing expenses in the quarter.
Dividend Adjustment Reflects Lower Earnings Power
Board reduced/adjusted the dividend to $0.31 per share citing changes in base rates and spread compression — an action that signals lower near‑term earnings power versus prior distributions.
NAV Discount Pressure and Market Valuation
Stock trading well below NAV (repurchases at an average 18% discount), reflecting persistent market discount to intrinsic value and limited market confidence in closed‑end valuations—management plans aggressive buybacks to capture this.
Concentration of Markdowns in Older Vintages
Declines in NAV and larger markdowns were driven by a small set of longer‑dated vintage credits (many on watch list), indicating that legacy exposures continue to weigh on near‑term performance.
Company Guidance
Guidance from the call centered on capital allocation and dividend policy: the board authorized a new $100.0 million stock repurchase program (bringing total repurchase capacity to $107.9 million after ~ $7.9 million remaining from the prior plan), management repurchased ~1.1 million shares at an average 18% discount for $12.9 million (≈$0.03 NAV accretion) and expects, if current discounts and volumes persist, to fully utilize the authorization by late May; the board also declared a quarterly dividend of $0.31 per share (record March 10, payable March 26) and said repurchases should not materially increase net leverage given visibility into expected repayments (including a $7.5 million Merx paydown in the quarter and an additional $22 million post-quarter, $29.5 million total). Key portfolio and financial context cited to support this guidance included: portfolio fair value $3.17 billion, NAV $14.18 per share (down 3.3% q/q) and total net assets $1.31 billion, NII per share $0.39, GAAP net loss per share $0.14 ($0.10 ex ~$0.04 of one‑time financing costs), total principal debt $2.0 billion and net leverage 1.45x; quarter activity of $141 million of new commitments across 26 transactions (weighted‑average spread 497 bps, weighted avg net leverage 4.0x), gross fundings $156 million, sales/repayments $119 million, net fundings +$25 million; portfolio credit/yield metrics: weighted avg yield at cost 10.0% (from 10.3%), weighted avg spread on direct origination 546 bps (down 13 bps), cost of debt 5.95% (from 6.37%), non‑accruals 2.6% (from 3.1%), PIK 4.8% of investment income, and software exposure 11.4% of the portfolio (avg position ~$12 million, avg LTV 32%, median EBITDA $52 million, weighted avg net leverage 4.6x, interest coverage 2.3x).MidCap Financial Investment Corporation Financial Statement Overview
Summary
Despite strong profitability in 2023–2024, results are highly volatile with a sharp deterioration/possible anomaly in the latest 2025 snapshot and repeated negative operating/free cash flow in recent years. Elevated leverage adds risk if credit performance weakens.Income Statement
Results were solid in 2023–2024 with strong profitability (net margins ~50% in 2023 and ~44% in 2024) and meaningful earnings levels, but revenue growth turned negative in 2024 and the latest 2025 annual snapshot shows an extreme revenue collapse and zeroed-out profit metrics. Overall, the income profile looks highly volatile and the most recent period materially weak versus the prior two years.34
Negative
Balance Sheet
Leverage is consistently elevated, with debt running around ~1.25–1.55x equity in 2021–2024, which is meaningful financial risk if earnings or credit performance deteriorate. Offsetting that, equity remains sizable and return on equity was respectable in 2023 (~11.8%) and moderate in 2024 (~7.0%), indicating the balance sheet has been productive despite the leverage. The 2025 figures (showing no debt) appear inconsistent versus the established capital structure, adding uncertainty to the latest data point.56
Neutral
Cash Flow
Cash generation is erratic: operating and free cash flow were very strong in 2021 and 2023, but turned negative in 2022 (early period), 2024, and sharply negative in 2025. The repeated negative cash flow in the most recent years raises questions around consistency of cash conversion and the sustainability of distributions/capital needs through cycles.27
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 320.90K | 226.31M | 237.35M | 141.46M | 151.74M |
| Gross Profit | 0.00 | 110.35M | 133.15M | 94.06M | 96.72M |
| EBITDA | 0.00 | 98.82M | 118.76M | 103.69M | 82.36M |
| Net Income | 0.00 | 98.82M | 118.76M | 30.59M | 82.36M |
Balance Sheet | |||||
| Total Assets | 158.05M | 3.19B | 2.50B | 2.53B | 2.60B |
| Cash, Cash Equivalents and Short-Term Investments | 0.00 | 75.79M | 122.13M | 87.09M | 30.60M |
| Total Debt | 0.00 | 1.75B | 1.46B | 1.48B | 1.55B |
| Total Liabilities | 102.43M | 1.79B | 1.50B | 1.54B | 1.60B |
| Stockholders Equity | 55.62M | 1.40B | 1.01B | 988.11M | 1.00B |
Cash Flow | |||||
| Free Cash Flow | -49.75M | -9.53M | 196.38M | 76.07M | -2.68M |
| Operating Cash Flow | -49.75M | -9.53M | 196.38M | 76.07M | -2.68M |
| Investing Cash Flow | -151.11M | 0.00 | 0.00 | 82.32M | 0.00 |
| Financing Cash Flow | 73.37M | -36.76M | -161.36M | -101.91M | -21.33M |
MidCap Financial Investment Corporation Technical Analysis
Negative
10.53
Price Trends
11.34
Negative
11.47
Negative
11.71
Negative
Market Momentum
-0.16
Positive
34.40
Neutral
13.32
Positive
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 10.53 is below the 20-day moving average (MA) of 11.13, below the 50-day MA of 11.34, and below the 200-day MA of 11.71, indicating a bearish trend. The MACD of -0.16 indicates Positive momentum. The RSI at 34.40 is Neutral, neither overbought nor oversold. The STOCH value of 13.32 is Positive, 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $1.04B | 8.02 | 8.75% | 17.34% | -16.58% | 65.24% | |
60 Neutral | $302.50M | 9.59 | 8.20% | 12.83% | 90.34% | -44.25% | |
59 Neutral | $325.17M | 12.70 | 5.38% | 16.61% | -3.09% | 200.66% | |
58 Neutral | $799.23M | 8.64 | 9.31% | 10.80% | -6.30% | -6.92% | |
50 Neutral | $384.33M | -43.30 | -1.15% | 21.13% | -91.81% | 78.46% | |
49 Neutral | ― | 10.06 | 7.18% | 13.35% | -12.06% | -31.14% |
* Financial Sector Average
MFIC
MidCap Financial Investment Corporation
10.53
-1.62
-13.33%
PNNT
Pennantpark Investment
5.10
-1.03
-16.79%
SLRC
SLR Investment Corp.
15.16
-0.47
-3.01%
SCM
Stellus Capital
10.57
-3.09
-22.60%
TCPC
BlackRock TCP Capital
4.51
-2.67
-37.19%
GSBD
Goldman Sachs BDC
9.17
-2.00
-17.91%
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.