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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 Yield12.64%
Average Volume (3M)468.46K
Price to Earnings (P/E)11.2
Beta (1Y)0.58
Revenue Growth0.47%
EPS Growth-36.63%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)0.38
Shares Outstanding93,303,620
10 Day Avg. Volume425,631
30 Day Avg. Volume468,463
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/Revenue0.00
Enterprise Value/Gross Profit0.00
Enterprise Value/Ebitda0.00
Forecast
1Y Price Target
$13.38Price Target Upside11.22% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)1.52
Revenue Forecast (FY)$326.23M
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:Nov 06, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:May 14, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted strong net investment income, significant repayments from Merx, active new commitments, and successful debt management strategies. However, these positives were tempered by a decline in NAV, an increase in non-accrual investments, potential income pressure from declining base rates, and exposure to a bankruptcy filing.Q3-2025 Updates
Positive Updates
Net Investment Income Growth
Net investment income per share was $0.38 for the September quarter, corresponding to an annualized return on equity of 10.3%.
Merx Repayment Boost
Merx, an aircraft leasing portfolio company, repaid approximately $97 million to MFIC, which partly offset a decline in NAV.
Strong Commitment Activity
MFIC made $138 million of new commitments across 21 transactions, benefiting from the strong incumbent position of MidCap Financial.
Debt Maturity Extension and Cost Reduction
MFIC extended its revolving credit facility maturity to October 2030 and reduced the funded spread by 10 basis points.
CLO Upsize and Repricing
MFIC upsized and repriced its CLO, increasing the size from $400 million to $600 million, resulting in a 19 basis point reduction in the weighted average spread on floating rate liabilities.
Negative Updates
Decline in NAV
Net Asset Value (NAV) per share decreased to $14.66, a drop of 0.6% compared to the prior quarter.
Increase in Non-Accruals
Investments on non-accrual status rose to 3.1% of the portfolio at fair value, up from 2% in the prior quarter, with five investments newly added to non-accrual status.
Pressure from Declining Base Rates
A projected decline in base rates could reduce MFIC's annual net investment income by approximately $9.4 million or $0.10 per share.
Exposure to Bankruptcy
One portfolio company, Renovo, filed for bankruptcy in early November, with MFIC having a $7.9 million exposure.
Company Guidance
During the earnings call for MidCap Financial Investment Corporation (MFIC) for the third quarter of fiscal year 2025, several key metrics and guidance were discussed. Net investment income (NII) per share was reported at $0.38, equating to an annualized return on equity (ROE) of 10.3%, while GAAP net income per share was $0.29, corresponding to an annualized ROE of 8%. The net asset value (NAV) per share was $14.66, reflecting a 0.6% decline from the previous quarter, mainly due to some positions moving to non-accrual status, although this was partially offset by a gain on their investment in Merx, the aircraft leasing portfolio company, which repaid approximately $97 million during the quarter. MFIC made new commitments of $138 million across 21 transactions and saw a weighted average spread of 521 basis points on these new commitments. The company declared a quarterly dividend of $0.38 per share, while also addressing the impact of recent Federal Reserve rate cuts and a projected decline in the SOFR forward curve, which could potentially reduce annual NII by $9.4 million or $0.10 per share if base rates drop by 100 basis points. Additionally, MFIC highlighted recent enhancements to its capital structure, including a reset of its first CLO, which reduced its cost of debt, positioning the company to better manage the anticipated interest rate environment.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 | 103.69M | 137.62M | 112.07M |
| 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
12.03
Price Trends
12.12
Negative
12.29
Negative
12.17
Negative
Market Momentum
0.04
Negative
48.44
Neutral
36.92
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 12.03 is above the 20-day moving average (MA) of 12.02, below the 50-day MA of 12.12, and below the 200-day MA of 12.17, indicating a neutral trend. The MACD of 0.04 indicates Negative momentum. The RSI at 48.44 is Neutral, neither overbought nor oversold. The STOCH value of 36.92 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $14.59B | 10.24 | 10.06% | 9.33% | 10.34% | -24.16% | |
71 Outperform | $1.12B | 7.89 | 9.36% | 16.85% | -55.16% | 47.09% | |
69 Neutral | ― | 11.22 | 8.34% | 12.64% | 0.47% | -36.63% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | $998.55M | 14.84 | 5.43% | 13.40% | 36.15% | -38.59% | |
64 Neutral | $336.73M | 8.22 | 10.88% | 13.54% | 65.75% | 14.28% | |
48 Neutral | $423.77M | 30.14 | 2.89% | 14.79% | -35.46% | -67.15% |
* Financial Sector Average
MFIC
MidCap Financial Investment Corporation
12.03
0.06
0.50%
NMFC
New Mountain Finance
9.62
-0.41
-4.09%
PNNT
Pennantpark Investment
6.38
0.25
4.08%
SCM
Stellus Capital
11.81
-0.41
-3.36%
ARCC
Ares Capital
20.20
0.49
2.49%
GSBD
Goldman Sachs BDC
9.88
-1.06
-9.69%
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.