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Monroe Capital (MRCC)
NASDAQ:MRCC
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Monroe Capital
(NASDAQ:MRCC)
65Neutral
Monroe Capital (MRCC) vs. S&P 500 (SPY)
Market Cap
$155.56M
Dividend Yield13.93%
Average Volume (3M)91.69K
Price to Earnings (P/E)16.0
Beta (1Y)0.65
Revenue Growth127.09%
EPS Growth2519.30%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength79
IndustryAsset Management
Share Statistics
EPS (TTM)0.45
Shares Outstanding21,666,340
10 Day Avg. Volume117,794
30 Day Avg. Volume91,688
Financial Highlights & Ratios
PEG Ratio0.00636
Price to Book (P/B)N/A
Price to Sales (P/S)3.77
Price to Cash Flow (P/CF)2.70
P/FCF Ratio2.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$8.00Price Target Upside15.44% Upside
Rating ConsensusHold
Number of Analyst Covering2
Monroe Capital Business Overview & Revenue Model
Company DescriptionMonroe Capital Corporation (MRCC) is a business development company that focuses on providing customized financing solutions primarily to lower middle-market companies in the United States. The company operates in the financial services sector and offers a range of debt and equity investments, including senior and junior secured debt, unsecured subordinated debt, and equity investments. MRCC aims to support the growth and expansion of its portfolio companies across various industries.
How the Company Makes MoneyMonroe Capital Corporation generates revenue primarily through interest income from its debt investments and capital gains from its equity investments. The company makes money by charging interest on the loans it provides to its portfolio companies, which can include short-term and long-term loans. Additionally, MRCC may earn fee income from origination, structuring, and commitment fees associated with its financing activities. The company also benefits from capital appreciation and dividends from its equity investments. Significant partnerships with institutional investors and banks may also play a role in MRCC's investment activities and funding capabilities, although specific partnerships are not disclosed.
Monroe Capital Financial Statement Overview
Summary
Monroe Capital exhibits strong revenue growth and efficient cost management, resulting in robust profitability metrics. The recent elimination of debt improves financial stability, although past leverage levels were concerning. The company's cash flow generation is consistent, supporting ongoing operations. Overall, Monroe Capital presents a stable financial outlook with opportunities for continued growth, but past volatility in net income and leverage warrants attention.Income Statement
Monroe Capital's revenue exhibited strong growth with a significant increase from the previous year, indicating robust top-line performance. The gross profit margin is favorable, reflecting efficient cost management. However, net income shows volatility, impacting net profit margins. The EBIT margin remains stable, but EBITDA data is missing, limiting full profitability analysis.75
Positive
Balance Sheet
The balance sheet reveals a stable equity position with a healthy equity ratio, suggesting strong asset backing. The elimination of total debt in the latest report significantly reduces leverage risk, enhancing financial stability. However, the company previously carried high debt levels, indicating past leverage concerns.72
Positive
Cash Flow
Operating cash flow is positive and stable, supporting Monroe Capital's liquidity position. Although the free cash flow growth rate is not available, the consistent positive free cash flow indicates effective cash management. The operating cash flow to net income ratio is favorable, suggesting efficient conversion of profits into cash.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 46.44M | 27.28M | 4.49M | 40.16M | 6.51M | Gross Profit |
| 46.44M | 11.93M | -9.27M | 27.08M | -4.17M | EBIT |
| 10.90M | 24.16M | 13.57M | 32.74M | 2.02M | EBITDA |
| 0.00 | 0.00 | 88.16M | 0.00 | 0.00 | Net Income Common Stockholders |
| 9.70M | 371.00K | -2.79M | 32.46M | 1.65M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 9.04M | 4.96M | 5.45M | 2.62M | 6.77M | Total Assets |
| 490.67M | 513.19M | 565.00M | 590.46M | 585.12M | Total Debt |
| 0.00 | 300.87M | 330.11M | 332.15M | 343.51M | Net Debt |
| -9.04M | 295.91M | 324.66M | 329.53M | 336.74M | Total Liabilities |
| 298.91M | 309.46M | 339.98M | 340.99M | 350.69M | Stockholders Equity |
| 191.76M | 203.72M | 225.02M | 249.47M | 234.43M |
| Cash Flow | Free Cash Flow | |||
| 35.96M | 51.73M | 14.11M | 20.01M | 74.93M | Operating Cash Flow |
| 35.96M | 51.73M | 14.11M | 20.01M | 74.93M | Investing Cash Flow |
| 0.00 | 0.00 | 3.63M | 7.54M | 51.20M | Financing Cash Flow |
| -31.87M | -52.22M | -26.72M | -34.30M | -72.15M |
Monroe Capital Technical Analysis
Negative
6.93
Price Trends
7.96
Negative
8.00
Negative
7.61
Negative
Market Momentum
-0.12
Negative
39.95
Neutral
35.91
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MRCC, the sentiment is Negative. The current price of 6.93 is below the 20-day moving average (MA) of 7.53, below the 50-day MA of 7.96, and below the 200-day MA of 7.61, indicating a bearish trend. The MACD of -0.12 indicates Negative momentum. The RSI at 39.95 is Neutral, neither overbought nor oversold. The STOCH value of 35.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MRCC.
Monroe Capital Risk Analysis
Monroe Capital disclosed 88 risk factors in its most recent earnings report. Monroe Capital 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
Monroe Capital Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $14.28B | 8.55 | 12.40% | 9.20% | 19.95% | -10.57% | |
74 Outperform | $4.69B | 9.04 | 19.26% | 5.67% | 51.80% | 12.05% | |
74 Outperform | $824.32M | 8.61 | 9.67% | 10.85% | 14.33% | 25.35% | |
65 Neutral | $155.56M | 16.03 | 4.91% | 13.93% | 127.09% | 2519.30% | |
65 Neutral | $553.11M | 5.38 | 22.43% | 7.99% | 69.53% | 60.29% | |
64 Neutral | $13.46B | 9.44 | 9.34% | 4.72% | 16.14% | -8.80% | |
49 Neutral | $418.55M | 25.67 | 3.28% | 14.66% | ― | -66.59% |
* Financial Sector Average
Performance Comparison
MRCC
Monroe Capital
6.93
0.56
8.79%
GLAD
Gladstone Capital
23.73
4.93
26.22%
MAIN
Main Street Capital
51.48
7.08
15.95%
PNNT
Pennantpark Investment
6.27
0.15
2.45%
SLRC
SLR Investment Corp.
14.50
0.87
6.38%
ARCC
Ares Capital
19.84
1.10
5.87%
Monroe Capital Earnings Call Summary
Earnings Call Date: Mar 3, 2025 | % Change Since: -18.85% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with both positive and negative elements. While MRCC maintained a high dividend yield and benefited from strong middle market loan volumes, challenges such as a decrease in NAV, non-accrual status increases, and declining effective yields were significant. The strategic partnership with Wendel Group is a positive future prospect, but current financial metrics reflect pressures from market conditions.Highlights
Dividend Yield and Net Investment Income Coverage
MRCC delivered a total annualized dividend yield of 11.4% and the adjusted net investment income covered the $0.25 per share dividend for the quarter.
Healthy Portfolio Company Performance
Portfolio companies demonstrated healthy revenue and EBITDA growth trends throughout 2024, which contributed to a sound interest coverage ratio.
Strong Middle Market Loan Volumes
2024 saw an 85% year-over-year increase in sponsored direct lending volumes, a new record for annual growth, driven by increased private equity sponsor activity.
Strategic Partnership with Wendel Group
MRCC's partnership with Wendel Group will bring $1 billion of new seed capital to support Monroe's investment strategies.
Lowlights
Decrease in NAV and Portfolio Size
NAV decreased by 3.6% from $198.9 million to $191.8 million, and the investment portfolio decreased by $17.3 million.
Non-Accrual Status and Unrealized Losses
The portfolio's non-accrual loans increased slightly, with net losses of $7.7 million, primarily due to unrealized mark to market losses.
Decline in Effective Yield
Portfolio's weighted average effective yield decreased from 11% to 10.2% due to declining interest rates and additional non-accrual investments.
Decreased Investment Income
Investment income decreased by $1.7 million due to a declining interest rate environment and placement of an additional portfolio company on non-accrual status.
Company Guidance
During Monroe Capital Corporation's fourth quarter and full year 2024 earnings call, CEO Ted Koenig highlighted several key financial metrics and strategic updates. The company reported an adjusted net investment income of $6.2 million or $0.29 per share for the fourth quarter, a slight decrease from the previous quarter. The net asset value (NAV) was $191.8 million or $8.85 per share, reflecting a 3.6% decline from the prior quarter due to net unrealized losses. Monroe's leverage increased marginally to 1.53 times debt to equity. The portfolio yield stood at 10.2%, and the annualized dividend yield reached 11.4%. In 2024, Monroe invested $30.4 million in new portfolio companies and $57.6 million in existing ones, with 65% of capital deployment focused on incremental investments in existing companies. Furthermore, Monroe's partnership with the Wendel Group, which will infuse $1 billion in seed capital, was approved by shareholders, underscoring the company's strategic growth ambitions.Monroe Capital Corporate Events
Private Placements and FinancingM&A TransactionsBusiness Operations and Strategy
Monroe Capital Forms Strategic Partnership with Wendel SE
Positive
Mar 31, 2025
On March 31, 2025, Monroe Capital Corporation entered into a new investment advisory agreement with Monroe Capital BDC Advisors, LLC, following the termination of the previous agreement due to a change of control. This change was part of a strategic partnership where Momentum US Bidco LLC, an affiliate of Wendel SE, acquired a 75% stake in Monroe’s affiliates. The partnership aims to support Monroe’s growth initiatives and expand its U.S. private credit platform, with Wendel committing $1 billion for seed capital and GP commitments. Monroe will continue to operate independently with no changes to its investment process or operations.
Financial Disclosures
Monroe Capital to Announce 2024 Financial Results
Neutral
Feb 21, 2025
On February 21, 2025, Monroe Capital Corporation announced that it will release its fourth quarter and full year 2024 financial results on February 28, 2025, after market close. The company will also host a webcast and conference call on March 3, 2025, to discuss these results, highlighting its continued focus on engaging with stakeholders and providing transparency in its financial performance.
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.