Morgan Stanley Direct Lending Fund (MSDL) AI Stock Analysis

• Market Cap: $1.44B
• Dividend Yield: 12.6%
• Average Volume (3M): 849.31K
• Price to Earnings (P/E): 10.0
• Beta (1Y): 0.54
• Revenue Growth: 1.97%
• EPS Growth: -35.20%
• Country: US
• Employees: N/A
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Conglomerates
• EPS (TTM): 0.50
• Shares Outstanding: 86,811,200
• 10 Day Avg. Volume: 925,328
• 30 Day Avg. Volume: 849,311
• PEG Ratio: -1.18
• Price to Book (P/B): 1.00
• Price to Sales (P/S): 7.29
• P/FCF Ratio: -4.94
• Enterprise Value/Market Cap: 2.36
• Enterprise Value/Revenue: 11.82
• Enterprise Value/Gross Profit: 22.44
• Enterprise Value/Ebitda: 23.05
• 1Y Price Target: $17.25
• Price Target Upside: 4.23% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): 1.85
• Revenue Forecast (FY): $367.48M

• Rating: 64 Neutral
• Price Target: $17.50 ▲(5.74% Upside)

The score is driven primarily by mixed financial performance: strong reported profitability is offset by weak cash flow quality and uncertainty in leverage trends. Valuation is a key positive with a low P/E and high dividend yield. Technicals are a drag due to a below-DMA downtrend and negative MACD, while the latest earnings call was moderately positive but flagged credit/NAV pressure via new nonaccruals and unrealized losses.

Positive Factors

High reported profitability

Sustained high net margins (~50% TTM) indicate durable earnings power from interest and fee income. This margin cushion helps absorb credit volatility, supports consistent dividend distributions, and underpins long-term return generation for investors in private credit strategies.

First‑lien, diversified portfolio

A large, diversified middle‑market portfolio concentrated in first‑lien loans materially reduces idiosyncratic loss risk and enhances recoveries in defaults. Industry and issuer breadth plus seniority provide structural protection and steady interest income over multi‑year cycles.

Improved funding structure

Executing a CLO and lowering facility spreads materially strengthens financing liquidity and cuts funding costs. Lower long‑term borrowing yields increase net interest margins, expand deployment capacity, and reduce sensitivity to short‑term market dislocations.

Negative Factors

Choppy cash generation

Weak and volatile cash conversion undermines reported profitability: earnings not translating into stable cash raises questions about dividend sustainability, reliance on external funding, and ability to weather credit stress without capital actions or higher leverage.

Inconsistent leverage profile

Volatile debt levels create uncertainty around capital structure and funding flexibility. Inconsistent leverage complicates risk management, can increase refinancing and covenant risk during stress, and makes forecasting interest expense and dividend capacity less reliable.

Weakening revenue and credit marks

A material revenue decline combined with recent nonaccrual additions and $16.2M of unrealized losses erodes NAV and earnings momentum. Persistent top‑line weakness plus rising credit blemishes can pressure distributable income and require higher loss reserves over the medium term.

Morgan Stanley Direct Lending Fund Business Overview & Revenue Model

Company Description

Morgan Stanley Direct Lending Fund is a business development and finance company, which engages in lending to middle-market companies. It invests in directly originated senior secured term loans including first lien senior secured term loans and second lien senior secured term loans. The company was founded on May 30, 2019 and is headquartered in New York, NY.

How the Company Makes Money

The Morgan Stanley Direct Lending Fund generates revenue primarily through interest income from loans it extends to middle-market companies. The fund charges interest on the principal amount of the loans, which constitutes the main revenue stream. Additionally, MSDL may earn fees for structuring and arranging financing, as well as management fees based on assets under management. The fund's performance can also benefit from capital appreciation if the companies it lends to grow and succeed, potentially leading to higher loan recoveries in case of repayment. Partnerships with financial institutions and advisory firms can enhance deal flow and investment opportunities, further contributing to the fund's earnings.

Morgan Stanley Direct Lending Fund Financial Statement Overview

Summary

Morgan Stanley Direct Lending Fund shows strong revenue growth and a solid balance sheet with no debt, indicating robust financial health. However, recent cash flow challenges and volatile EBIT margins suggest areas for improvement in operational efficiency and cash management.

Income Statement

Morgan Stanley Direct Lending Fund has shown robust growth in total revenue over the years, with a significant increase from $24 million in 2020 to $253 million in 2024. The net profit margin has also remained strong, with net income consistently climbing, indicating effective cost management and profitability. However, the EBIT and EBITDA margins have been volatile, with EBIT at zero in 2024, which could indicate challenges in operational efficiency.

Balance Sheet

The company maintains a strong financial position with zero total debt in 2024, indicating exceptional financial stability. The equity ratio remains solid, suggesting prudent financial management. However, the return on equity has been fluctuating, reflecting variable profitability relative to shareholder equity.

Cash Flow

The cash flow statement shows mixed results. While the company has maintained positive free cash flow in previous years, 2024 saw a significant negative free cash flow, pointing to potential liquidity issues. The operating cash flow to net income ratio has also been negative recently, indicating discrepancies between earnings and cash generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	287.20M	332.52M	328.13M	100.22M	98.62M	23.47M
Gross Profit	151.20M	209.59M	215.25M	33.03M	77.61M	19.74M
EBITDA	147.22M	218.00M	232.53M	48.88M	83.33M	18.30M
Net Income	145.00M	215.56M	231.01M	48.54M	83.25M	18.30M
Balance Sheet
Total Assets	3.93B	3.91B	3.31B	2.99B	2.49B	656.81M
Cash, Cash Equivalents and Short-Term Investments	65.47M	70.37M	69.70M	81.22M	74.15M	11.26M
Total Debt	0.00	1.97B	1.50B	1.52B	1.25B	333.85M
Total Liabilities	2.16B	2.07B	1.59B	1.59B	1.30B	355.19M
Stockholders Equity	1.77B	1.84B	1.72B	1.40B	1.19B	301.62M
Cash Flow
Free Cash Flow	13.13M	201.47M	185.78M	121.59M	67.69M	12.43M
Operating Cash Flow	13.13M	201.47M	185.78M	121.59M	67.69M	12.43M
Investing Cash Flow	-11.10M	-575.01M	-269.60M	-551.43M	-1.73B	-625.78M
Financing Cash Flow	-17.09M	376.19M	72.31M	436.90M	1.72B	624.58M

Morgan Stanley Direct Lending Fund Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 16.55
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MSDL, the sentiment is Negative. The current price of 16.55 is below the 20-day moving average (MA) of 16.68, below the 50-day MA of 16.89, and below the 200-day MA of 17.55, indicating a bearish trend. The MACD of -0.12 indicates Negative momentum. The RSI at 46.23 is Neutral, neither overbought nor oversold. The STOCH value of 72.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MSDL.

Morgan Stanley Direct Lending Fund 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%
NCDL	67 Neutral	$670.18M	8.83	8.46%	14.71%	-8.32%	-33.94%
MSDL	64 Neutral	$1.44B	10.03	8.00%	12.60%	1.97%	-35.20%
PACS	60 Neutral	$6.07B	37.39	22.08%	―	35.37%	-37.58%
AUNA	58 Neutral	$342.68M	6.66	11.61%	―	2.14%	―
PSBD	55 Neutral	$377.75M	27.62	2.72%	14.10%	-2.38%	-75.49%

Morgan Stanley Direct Lending Fund Corporate Events

Morgan Stanley Direct Lending Fund Names New Compliance Chief

On December 22, 2025, Morgan Stanley Direct Lending Fund announced that Chief Compliance Officer Gauranga Pal had resigned effective January 1, 2026, while remaining an Executive Director at Morgan Stanley Investment Management, with the company noting that his departure did not stem from any disagreement. The Board simultaneously appointed industry veteran Hope Brown as Chief Compliance Officer effective January 1, 2026, expanding her compliance leadership across several affiliated business development companies and leveraging her extensive background in investment company compliance, risk management, ESG compliance and oversight roles at Calvert Funds and other asset managers, underscoring Morgan Stanley’s emphasis on strengthening its governance and regulatory oversight framework across its private credit and investment platforms.

The most recent analyst rating on (MSDL) stock is a Hold with a $18.00 price target. To see the full list of analyst forecasts on Morgan Stanley Direct Lending Fund stock, see the MSDL Stock Forecast page.

Morgan Stanley Direct Lending Fund Reports Q3 Results

On November 6, 2025, Morgan Stanley Direct Lending Fund announced its financial results for the third quarter ending September 30, 2025, reporting a net investment income of $43.7 million, or $0.50 per share, consistent with the previous quarter. The company declared a regular dividend of $0.50 per share for the fourth quarter, payable in January 2026. The fund’s net asset value per share slightly decreased to $20.41, and its debt-to-equity ratio increased to 1.17x. Notably, the company successfully closed its inaugural collateralized loan obligation (CLO) with a principal of approximately $401 million, enhancing its capital structure and liquidity.

The most recent analyst rating on (MSDL) stock is a Buy with a $19.50 price target. To see the full list of analyst forecasts on Morgan Stanley Direct Lending Fund stock, see the MSDL Stock Forecast page.