Monroe Capital (MRCC) AI Stock Analysis

• Market Cap: $100.10M
• Dividend Yield: 14.03%
• Average Volume (3M): 138.97K
• Price to Earnings (P/E): 12.1
• Beta (1Y): 0.69
• Revenue Growth: -34.92%
• EPS Growth: -132.22%
• Country: US
• Employees: N/A
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 0.10
• Shares Outstanding: 21,666,340
• 10 Day Avg. Volume: 221,216
• 30 Day Avg. Volume: 138,965
• PEG Ratio: 0.68
• Price to Book (P/B): 0.83
• Price to Sales (P/S): 6.51
• P/FCF Ratio: 1.19
• Enterprise Value/Market Cap: 2.89
• Enterprise Value/Revenue: 41.11
• Enterprise Value/Gross Profit: 22.39
• Enterprise Value/Ebitda: 26.34
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 0.13
• Revenue Forecast (FY): $31.39M

• Rating: 59 Neutral
• Price Target: $5.00 ▼(-27.01% Downside)
• Action: Reiterated Date: 03/14/26
• Date: Action: Reiterated 03/14/26

The score is driven primarily by improving financial performance (notably strong recent cash generation) but is held back by weak technicals with the stock below key moving averages and negative momentum. Valuation is a plus due to the moderate P/E and very high dividend yield, while recent corporate actions (deal approvals and note redemption) modestly improve the risk profile.

Positive Factors

Cash generation

Sustained positive operating cash flow and a recent material step-up in free cash flow improve the company's ability to fund dividends, pay down liabilities, and finance transactions without relying solely on capital markets. Strong cash conversion supports durable distributions and balance sheet flexibility.

Strategic merger approved

Shareholder approval for an asset sale and merger creates a pathway to combine with a larger BDC, which can deliver scale economies, broader funding access and potential cost synergies. Structural consolidation can improve liquidity, diversify credit risk, and enhance long-term dividend capacity.

Debt reduction via note redemption

Redeeming $130M of maturing notes reduces near-term refinancing risk and interest expense. Removing a large upcoming maturity materially eases short-term funding pressures and lowers rollover risk, strengthening the company's structural liquidity profile and credit optionality.

Negative Factors

Earnings and revenue volatility

Multi-year swings in revenue and profitability indicate earnings are sensitive to credit cycles and deal timing. Persistent volatility complicates dividend predictability and increases downside risk during economic stress, reducing confidence in consistent distributable earnings over intermediate horizons.

Historically elevated leverage

A history of mid-1x debt-to-equity amplifies returns but increases downside exposure to credit losses or funding shocks. Even if recent leverage fell, the historical pattern shows balance sheet sensitivity to earnings swings and raises the risk that leverage could re-emerge under normal operating strategies.

External management fees

An external management structure creates a persistent expense drag via base and incentive fees, lowering net investment income available for distributions. Over time this can constrain payout capacity relative to internally managed peers and reduces the firm's margin resilience in stressed credit environments.

Monroe Capital Business Overview & Revenue Model

Company Description

Monroe Capital Corporation is a business development company specializing in customized financing solutions in senior, unitranche and junior secured debt, subordinated debt financing and to a lesser extent, unsecured debt and equity, including equity co-investments in preferred and common stock and warrants. It also provides financing primarily to leveraged buyouts in lower middle-market companies. It focuses to invest in the United States and Canada. The fund prefers to invest in companies with EBITDA between $3 and $35 million. Its makes minority equity investments.

How the Company Makes Money

MRCC makes money primarily from investment income generated by its portfolio of middle-market credit investments. The core revenue stream is interest income earned on loans it extends (most commonly senior secured loans), which may include cash interest and, when applicable, contractual features such as original issue discount (OID), paid-in-kind (PIK) interest, and accretion/amortization of premiums/discounts that are recognized as part of interest income. MRCC may also earn fee income related to its lending activity (for example, origination, structuring, or amendment fees) when such fees are charged and recognized under applicable accounting rules. In addition, MRCC can generate income or gains from equity-related positions (such as warrants, co-investments, or equity kickers) received in connection with certain financings, and from realized gains (or losses) when investments are sold or repaid above (or below) their carrying value. Because it is a BDC, a meaningful driver of distributable earnings is net investment income (investment income less operating expenses and financing costs). The company’s external management structure means it pays management and incentive fees to its investment adviser, which reduces net income available to shareholders. Leverage (borrowings under credit facilities and/or notes, if utilized) can amplify net interest margin when portfolio yields exceed the company’s cost of funds, but it also increases sensitivity to credit performance and funding costs. Specific counterparties/partnerships beyond being externally managed by an affiliate of Monroe Capital: null.

Monroe Capital Financial Statement Overview

Summary

Overall fundamentals are mixed but improving: revenue and profitability rebounded strongly after a weak 2022, and cash flow is a clear strength with a large recent step-up in operating cash flow/free cash flow. Offsetting this, multi-year earnings volatility and historically elevated leverage (despite no debt reported in the latest year) reduce confidence in the durability of results.

Income Statement

Revenue has been volatile over the period, including a sharp decline in 2022 followed by a rebound in 2023–2024. Profitability also swung meaningfully—loss-making in 2022, very low profitability in 2023, then materially stronger net margins in 2024 and 2025. The main offset is inconsistency: the latest annual report shows strong net income and margin, but operating-level profitability metrics are not consistently reported in the most recent year, which reduces confidence in trend quality.

Balance Sheet

Leverage appears elevated in prior years, with debt running higher than equity (debt-to-equity around the mid-1x range in 2020–2024), which can amplify downside risk in weaker earnings periods. While equity remains sizable relative to total assets, return on equity has been inconsistent—strong in 2021, negative in 2022, and modest in 2023–2025. The latest year shows no debt reported, but given the multi-year pattern, the balance sheet profile is best viewed as moderate risk with sensitivity to earnings volatility.

Cash Flow

Cash generation looks solid overall, with operating cash flow consistently positive across years and generally tracking net income well. The latest annual report shows a very large step-up in operating cash flow and free cash flow versus prior years, which is a meaningful strength. The key weakness is variability in free cash flow growth from year to year (including declines in several periods), indicating cash results can swing with the operating environment.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	21.21M	35.19M	27.00M	19.45M	54.03M
Gross Profit	12.90M	14.59M	5.46M	4.49M	40.16M
EBITDA	10.97M	10.16M	1.18M	-1.38M	32.74M
Net Income	11.41M	9.70M	371.00K	-2.79M	32.46M
Balance Sheet
Total Assets	372.96M	490.67M	513.19M	565.00M	590.46M
Cash, Cash Equivalents and Short-Term Investments	1.93M	9.04M	4.96M	5.45M	2.62M
Total Debt	190.76M	291.98M	300.87M	330.11M	332.15M
Total Liabilities	206.47M	298.91M	309.46M	339.98M	340.99M
Stockholders Equity	166.49M	191.76M	203.72M	225.02M	249.47M
Cash Flow
Free Cash Flow	115.87M	8.55M	9.96M	10.48M	12.47M
Operating Cash Flow	115.87M	8.55M	9.96M	10.48M	12.47M
Investing Cash Flow	114.68M	27.40M	41.77M	3.63M	7.54M
Financing Cash Flow	-122.99M	-31.87M	-52.22M	-26.72M	-34.30M

Monroe Capital Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.85
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 6.85 is above the 20-day moving average (MA) of 5.48, above the 50-day MA of 6.06, and above the 200-day MA of 6.31, indicating a bearish trend. The MACD of -0.45 indicates Positive momentum. The RSI at 33.29 is Neutral, neither overbought nor oversold. The STOCH value of 34.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MRCC.

Monroe Capital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
WHF	63 Neutral	$157.19M	11.23	5.30%	21.24%	-55.82%	-4.97%
MRCC	59 Neutral	$100.10M	12.10	6.46%	14.03%	-34.92%	-132.22%
BCIC	57 Neutral	$104.42M	11.33	5.90%	16.60%	-5.23%	193.87%
OFS	56 Neutral	$43.28M	-1.93	-27.67%	25.87%	-14.76%	―
GECC	49 Neutral	$75.87M	-2.74	-24.20%	22.43%	47.01%	-179.46%
OXSQ	46 Neutral	$152.27M	-7.18	-12.27%	24.14%	-177.91%	55.08%

Monroe Capital Corporate Events

Monroe Capital Shareholders Approve Asset Sale and Merger

On March 13, 2026, Monroe Capital Corporation held a special meeting of stockholders to vote on key strategic transactions. The meeting followed a record date of January 15, 2026, when 21,666,340 common shares were outstanding and eligible to vote, and there were no broker non-votes reported.

At the meeting, shareholders approved an Asset Sale Proposal with 11,645,478 votes in favor, 1,474,408 against and 558,097 abstentions. They also approved a Merger Proposal with 11,636,057 votes for, 1,486,581 against and 555,345 abstentions, clearing the way for the company to proceed with its planned asset sale and merger transaction framework.

The most recent analyst rating on (MRCC) stock is a Buy with a $5.50 price target. To see the full list of analyst forecasts on Monroe Capital stock, see the MRCC Stock Forecast page.

Monroe Capital Declares Lower Dividend, Advances Horizon Merger

Monroe Capital Corporation reported fourth-quarter 2025 net investment income of $2.2 million, or $0.10 per share, and adjusted net investment income of $2.3 million, or $0.11 per share, with net assets of $166.5 million, or $7.68 per share, as of December 31, 2025. Despite a decline in net asset value driven by spillover income utilization and unrealized losses, the board on March 5, 2026 declared a reduced first-quarter 2026 dividend of $0.09 per share and highlighted progress toward a NAV-for-NAV merger with Horizon Technology Finance, which management expects to unlock scale-driven synergies, broaden funding options, and potentially enhance long-term dividend capacity for stockholders.

The company’s full-year 2025 net investment income was $11.4 million, or $0.53 per share, while adjusted net investment income reached $11.6 million, or $0.54 per share. Leverage declined to 1.15 times debt-to-equity at year-end as the firm used portfolio repayments to trim its revolving credit facility, and management signaled that remaining undistributed spillover income is expected to be paid out in connection with the planned Horizon merger, positioning investors to participate in a larger, more diversified BDC platform.

The most recent analyst rating on (MRCC) stock is a Hold with a $7.00 price target. To see the full list of analyst forecasts on Monroe Capital stock, see the MRCC Stock Forecast page.

Monroe Capital Completes Redemption of 2026 Senior Notes

On January 14, 2026, Monroe Capital Corporation amended its senior secured revolving credit facility through Amendment No. 9, temporarily modifying borrowing base mechanics and concentration limits via a new Borrowing Base Flex Period, increasing interest margins by 0.75 percentage points, enhancing mandatory prepayment provisions tied to specified proceeds, and incorporating financing arrangements and references related to its 4.75% Notes due 2026 and previously announced strategic transactions. The changes, which leave the facility secured by substantially all of the company’s assets and subject to existing leverage, coverage and covenant frameworks, are designed to provide flexibility around the refinancing of the 2026 Notes and adjust liquidity and risk parameters, while preserving customary default and covenant protections that, if breached, could adversely affect Monroe Capital’s liquidity and financial condition; on January 15, 2026, the company completed the redemption of all $130 million of its outstanding 2026 Notes at par plus accrued interest, eliminating this debt and stopping further interest accrual on the notes.

The most recent analyst rating on (MRCC) stock is a Hold with a $7.00 price target. To see the full list of analyst forecasts on Monroe Capital stock, see the MRCC Stock Forecast page.

Monroe Capital Prepares Fund Wind-Down for Merger

Monroe Capital Corporation and Life Insurance Company of the Southwest have been co-investing in senior secured loans through MRCC Senior Loan Fund I, LLC since 2017. In preparation for a proposed merger with Horizon Technology Finance Corporation, the companies have initiated the wind-down and dissolution of the fund, with the process expected to be completed by December 31, 2025. The company anticipates no early termination penalties or continuing obligations following the dissolution.

The most recent analyst rating on (MRCC) stock is a Hold with a $7.00 price target. To see the full list of analyst forecasts on Monroe Capital stock, see the MRCC Stock Forecast page.

Monroe Capital Plans Redemption of 2026 Notes

On December 15, 2025, Monroe Capital Corporation announced its intention to redeem $130 million of its 4.75% Notes due 2026, contingent upon completing financing transactions generating at least $130 million before the redemption date of January 15, 2026. The redemption, which will be executed at 100% of the principal amount plus accrued interest, may be delayed or rescinded if the financing conditions are not met, impacting stakeholders by potentially altering the company’s debt profile and financial strategy.

The most recent analyst rating on (MRCC) stock is a Hold with a $7.00 price target. To see the full list of analyst forecasts on Monroe Capital stock, see the MRCC Stock Forecast page.

Monroe Capital Announces Q4 Distribution for 2025

On December 15, 2025, Monroe Capital Corporation announced a fourth-quarter distribution of $0.18 per share, payable on December 31, 2025, to stockholders of record as of December 23, 2025. This announcement follows the company’s dividend reinvestment plan, allowing stockholders to reinvest distributions unless they opt for cash. The company is also planning an Asset Sale and Merger in early 2026, which will impact its asset holdings and financial structure.

The most recent analyst rating on (MRCC) stock is a Hold with a $7.00 price target. To see the full list of analyst forecasts on Monroe Capital stock, see the MRCC Stock Forecast page.