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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:69Neutral
Price Target:―
MidCap Financial Investment Corporation's stock score is driven by its strong profitability and balance sheet, coupled with attractive valuation metrics such as a low P/E ratio and high dividend yield. However, the company faces challenges with declining revenue and cash flow, as well as below-target leverage and spread compression noted in the earnings call. Technical indicators suggest stability but indicate cautious optimism.
Positive Factors
Strong Profitability
The high net profit margin reflects efficient operations and strong profitability, which can support sustained earnings and shareholder returns over time.
Successful Mergers
The mergers significantly increased MFIC's asset base, enhancing its investment capacity and strategic positioning in the market.
Extended Credit Facility
The extended credit facility provides MFIC with long-term financial flexibility and stability, supporting future growth and investment opportunities.
Negative Factors
Declining Revenue
Declining revenue growth can hinder the company's ability to expand and invest in new opportunities, potentially impacting long-term competitiveness.
Cash Flow Challenges
Significant declines in free cash flow indicate potential liquidity issues, which could limit the company's ability to fund operations and growth initiatives.
Spread Compression
Spread compression reduces profitability on new loans, challenging MFIC's ability to maintain margins and competitive advantage in a borrower-friendly market.
MidCap Financial Investment Corporation (MFIC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
N/A
Dividend Yield12.61%
Average Volume (3M)426.49K
Price to Earnings (P/E)11.2
Beta (1Y)0.61
Revenue Growth0.47%
EPS Growth-36.63%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)0.39
Shares Outstanding93,303,620
10 Day Avg. Volume532,359
30 Day Avg. Volume426,487
Financial Highlights & Ratios
PEG Ratio-0.35
Price to Book (P/B)0.75
Price to Sales (P/S)4.65
P/FCF Ratio-110.33
Enterprise Value/Market CapN/A
Enterprise Value/Revenue14.80
Enterprise Value/Gross Profit22.34
Enterprise Value/Ebitda29.41
Forecast
1Y Price Target
$13.75Price Target Upside14.11% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
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:Aug 11, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong net investment income and significant progress in reducing exposure to the Merx portfolio, alongside positive developments in insurance recoveries and market conditions. However, challenges such as a decline in net asset value, increased nonaccruals, spread compression, and higher leverage were also noted.Q2-2025 Updates
Positive Updates
Strong Net Investment Income
Net investment income per share was $0.39 for the quarter, corresponding to an annualized return on equity of 10.5%.
Merx Portfolio Reduction
Significant reduction in exposure to Merx with a post-quarter-end transaction covering the majority of its aircraft, leading to a $90 million paydown and a modest write-up on the investment.
Insurance Recoveries for Merx
Merx received $30.9 million in insurance payments related to aircraft detained in Russia, bringing total recoveries to $47.4 million.
Dividend Declaration
A quarterly dividend of $0.38 per share was declared for shareholders of record, payable on September 25, 2025.
Positive Market Environment
Improved market sentiment and increased M&A activities were observed, despite earlier volatility due to tariff announcements.
Negative Updates
Net Asset Value Decline
NAV per share was $14.75 at the end of June, down 1.2% compared to the prior quarter.
Increased Nonaccruals
Investments on nonaccrual status increased to 2% of the portfolio at fair value, with new nonaccruals due to company-specific challenges.
Spread Compression
Weighted average spread on new commitments was lower than the existing portfolio average, indicating potential for continued spread compression.
Increased Leverage
Net leverage at the end of the quarter increased to 1.44x, which is slightly above the target range.
Company Guidance
In the earnings call for MidCap Financial Investment Corporation (MFIC) for the second quarter of fiscal year 2025, the company reported a net investment income (NII) per share of $0.39, translating to an annualized return on equity (ROE) of 10.5%. The GAAP net income per share was $0.19, with an annualized ROE of 5.2%. The net asset value (NAV) per share was $14.75, reflecting a 1.2% decline primarily due to challenges faced by specific portfolio positions. The company made $262 million in new commitments across 29 transactions, with a significant portion attributed to existing portfolio companies. The weighted average spread on new commitments was 538 basis points, with a leverage ratio of 4.0x. The portfolio's total fair value was $3.33 billion, invested across 249 companies. MFIC reported successful progress in reducing its investment in Merx, its aircraft leasing portfolio company, which resulted in a paydown of $90 million and anticipated additional considerations of $30 million by early 2026. The company declared a quarterly dividend of $0.38 per share, with plans to redeploy capital from Merx to enhance long-term shareholder value.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 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 213.38M | 226.31M | 133.15M | 141.46M | 96.72M | 126.73M |
| Gross Profit | 141.32M | 110.35M | 276.50K | 94.06M | 96.72M | 85.92M |
| EBITDA | 107.36M | 98.82M | 266.40K | 103.47M | 137.38M | 111.86M |
| Net Income | 99.22M | 98.82M | 118.76M | 30.59M | 82.36M | 111.86M |
Balance Sheet | ||||||
| Total Assets | 3.46B | 3.19B | 2.50B | 2.53B | 2.60B | 2.54B |
| Cash, Cash Equivalents and Short-Term Investments | 68.98M | 75.79M | 122.13M | 87.09M | 30.60M | 54.62M |
| Total Debt | 0.00 | 1.75B | 1.46B | 1.48B | 1.55B | 1.47B |
| Total Liabilities | 2.09B | 1.79B | 1.50B | 1.54B | 1.60B | 1.51B |
| Stockholders Equity | 1.38B | 1.40B | 1.01B | 988.11M | 1.00B | 1.04B |
Cash Flow | ||||||
| Free Cash Flow | -177.71M | -9.53M | 196.38M | 76.07M | -2.68M | 470.67M |
| Operating Cash Flow | -177.71M | -9.53M | 196.38M | 76.07M | -2.68M | 470.67M |
| Investing Cash Flow | -267.33M | 0.00 | 80.19M | 82.32M | 0.00 | 373.36M |
| Financing Cash Flow | 182.52M | -36.76M | -161.36M | -101.91M | -21.33M | -459.70M |
MidCap Financial Investment Corporation Technical Analysis
Negative
12.05
Price Trends
12.47
Negative
12.31
Negative
12.23
Negative
Market Momentum
-0.13
Positive
38.48
Neutral
27.82
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 12.05 is below the 20-day moving average (MA) of 12.38, below the 50-day MA of 12.47, and below the 200-day MA of 12.23, indicating a bearish trend. The MACD of -0.13 indicates Positive momentum. The RSI at 38.48 is Neutral, neither overbought nor oversold. The STOCH value of 27.82 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 (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | 14.43B | 10.07 | 11.40% | 9.38% | 7.71% | -29.47% | |
74 Outperform | 5.70B | 10.50 | ― | 6.09% | 28.32% | 13.63% | |
71 Outperform | 1.24B | 8.79 | ― | 16.00% | -55.16% | 47.09% | |
69 Neutral | ― | 11.16 | 8.34% | 12.61% | 0.47% | -36.63% | |
58 Neutral | 530.63M | -44.41 | ― | 20.99% | -48.53% | 73.29% | |
54 Neutral | ― | -1.95 | ― | 21.26% | -54.81% | -472.20% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
Performance Comparison
MFIC
MidCap Financial Investment Corporation
12.05
0.13
1.09%
NMFC
New Mountain Finance
9.72
-0.89
-8.39%
PNNT
Pennantpark Investment
6.68
0.59
9.69%
SCM
Stellus Capital
13.32
0.98
7.94%
ARCC
Ares Capital
20.46
1.29
6.73%
GSBD
Goldman Sachs BDC
10.89
-1.24
-10.22%
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.