MidCap Financial Investment Corporation (MFIC) AI Stock Analysis

• Market Cap: N/A
• Dividend Yield: 11.98%
• Average Volume (3M): 352.70K
• Price to Earnings (P/E): 10.3
• Beta (1Y): 0.60
• Revenue Growth: 37.04%
• EPS Growth: 16.88%
• Country: US
• Employees: N/A
• Sector: Financial
• Sector Strength: 79
• Industry: Asset Management
• EPS (TTM): 0.37
• Shares Outstanding: 93,303,620
• 10 Day Avg. Volume: 442,403
• 30 Day Avg. Volume: 352,705
• PEG Ratio: -0.38
• Price to Book (P/B): 0.75
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 9.68
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: 5.24
• Enterprise Value/Gross Profit: 15.02
• Enterprise Value/Ebitda: 11.33
• 1Y Price Target: $13.83
• Price Target Upside: 9.24% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 69 Neutral
• 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

Financial Performance

MFIC reported NOI of $0.44, above the $0.41 estimate, largely due to lower incentive fees.

Valuation

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.

Risk Management

Elevated leverage with CLO financing may add risk to the story.

MidCap Financial Investment Corporation Business Overview & Revenue Model

Company Description

Apollo 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 Money

MidCap 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.

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.

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.

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
84.81M	122.13M	87.09M	30.60M	54.62M	43.68M
	Total Assets
3.22B	2.50B	2.53B	2.60B	2.54B	2.87B
	Total Debt
0.00	1.46B	1.48B	1.55B	1.47B	1.79B
	Net Debt
-84.81M	1.34B	1.40B	1.52B	1.41B	1.75B
	Total Liabilities
1.80B	1.50B	1.54B	1.60B	1.51B	1.85B
	Stockholders Equity
1.42B	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

• Technical Analysis Sentiment: Positive
• Last Price: 12.66
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MFIC, the sentiment is Positive. The current price of 12.66 is above the 20-day moving average (MA) of 12.54, above the 50-day MA of 11.90, and above the 200-day MA of 12.47, indicating a bullish trend. The MACD of 0.19 indicates Positive momentum. The RSI at 59.51 is Neutral, neither overbought nor oversold. The STOCH value of 7.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MFIC.

MidCap Financial Investment Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARCC	74 Outperform	$15.51B	10.93	10.29%	8.59%	14.14%	-31.30%
GSBD	71 Outperform	$1.36B	26.86	3.27%	16.54%	-28.04%	-69.52%
MFIC	69 Neutral		10.30	8.64%	11.98%	37.04%	16.88%
NMFC	65 Neutral	$1.17B	10.92	8.11%	11.84%	-3.55%	-20.43%
Sector *	64 Neutral	$12.85B	9.81	7.79%	78.20%	12.23%	-7.93%
SCM	64 Neutral	$385.89M	9.50	10.83%	11.78%	17.67%	128.48%
PNNT	48 Neutral	$448.58M	46.45	1.95%	13.97%	―	-66.59%