Morgan Stanley Direct Lending Fund (MSDL) AI Stock Analysis

• Market Cap: $1.43B
• Dividend Yield: 12.76%
• Average Volume (3M): 810.69K
• Price to Earnings (P/E): 10.0
• Beta (1Y): 0.52
• 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: 724,786
• 30 Day Avg. Volume: 810,690
• 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: 2.37
• Enterprise Value/Revenue: 11.82
• Enterprise Value/Gross Profit: 22.44
• Enterprise Value/Ebitda: 23.05
• 1Y Price Target: $18.00
• Price Target Upside: 8.63% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 2.03
• Revenue Forecast (FY): $398.94M

• Rating: 77 Outperform
• Price Target: $19.00 ▲(14.67% Upside)

Morgan Stanley Direct Lending Fund benefits from strong financial performance and attractive valuation metrics, particularly its high dividend yield and low P/E ratio. However, technical indicators suggest bearish momentum, and recent earnings call highlights reveal some portfolio challenges. The overall score reflects a balanced view of these factors.

Positive Factors

Strong Revenue Growth

The consistent revenue growth highlights MSDL's ability to expand its lending operations and capture market opportunities, supporting long-term financial stability.

Solid Balance Sheet

A debt-free balance sheet provides MSDL with significant financial flexibility, reducing risk and enabling strategic investments without leverage constraints.

Increased Investment Commitments

The increase in investment commitments reflects MSDL's proactive approach to capital deployment, enhancing its growth potential and market presence.

Negative Factors

Volatile EBIT Margins

Volatile EBIT margins indicate challenges in operational efficiency, which could impact profitability and require strategic adjustments to stabilize earnings.

Nonaccrual Positions

Rising nonaccrual positions suggest potential credit quality issues, which could affect future income generation and necessitate stronger risk management.

Cash Flow Challenges

Negative free cash flow raises concerns about liquidity and the ability to fund operations and investments, potentially impacting MSDL's financial resilience.

Morgan Stanley Direct Lending Fund Business Overview & Revenue Model

Company Description

Morgan Stanley Direct Lending Fund (MSDL) is a private investment fund that focuses on providing direct lending solutions primarily to middle-market companies across various sectors. The fund aims to offer flexible financing options, including secured loans and other debt instruments, tailored to meet the unique needs of its borrowers. By leveraging Morgan Stanley's extensive industry expertise and market insights, MSDL seeks to generate attractive risk-adjusted returns for its investors while supporting the growth of businesses in the middle-market segment.

How the Company Makes Money

MSDL generates revenue primarily through interest income from the loans it provides to borrowers. This interest income is derived from the interest and fees charged on the loans, which are structured to reflect the credit risk and market conditions. Additionally, MSDL may earn management fees from investors for managing the fund's assets, as well as potential performance fees based on the fund's returns exceeding certain benchmarks. Key partnerships with financial institutions and access to a broad network of borrowers enhance MSDL's ability to source attractive lending opportunities and improve its overall earnings potential.

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: 16.57
• 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 MSDL, the sentiment is Negative. The current price of 16.57 is below the 20-day moving average (MA) of 16.85, below the 50-day MA of 16.75, and below the 200-day MA of 17.95, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 44.21 is Neutral, neither overbought nor oversold. The STOCH value of 56.38 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
MSDL	77 Outperform	$1.43B	10.01	8.00%	12.76%	1.97%	-35.20%
NCDL	75 Outperform	$698.33M	9.20	8.46%	13.94%	-8.32%	-33.94%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
AUNA	58 Neutral	$383.39M	6.01	15.04%	―	2.83%	―
PSBD	51 Neutral	$379.51M	27.65	2.72%	14.09%	-2.38%	-75.49%
PACS	51 Neutral	$1.93B	―	―	―	―	―

Morgan Stanley Direct Lending Fund Corporate Events

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.

Morgan Stanley Direct Lending Fund Q3 Results Announcement

On October 6, 2025, Morgan Stanley Direct Lending Fund announced that it will release its financial results for the third quarter of 2025 on November 6, 2025, after the market closes. The company will hold an earnings call on November 7, 2025, to discuss these results, potentially impacting stakeholders by providing insights into its financial health and market position.

The most recent analyst rating on (MSDL) stock is a Buy with a $17.00 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 DLF Amends Credit Agreement with BNP

On September 24, 2025, DLF Financing SPV LLC, a subsidiary of Morgan Stanley Direct Lending Fund, amended its Revolving Credit and Security Agreement with BNP Paribas, reducing applicable margins during and after the reinvestment period. This adjustment in the BNP Funding Facility aims to optimize borrowing costs and aligns with the company’s strategic financial management, potentially enhancing its competitive position in the direct lending market.

The most recent analyst rating on (MSDL) stock is a Buy with a $19.00 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 Completes $401.2 Million Debt Securitization

On September 17, 2025, North Haven Private Credit CLO 1 LLC, a subsidiary of Morgan Stanley Direct Lending Fund, completed a $401.2 million term debt securitization. This securitization, backed by a diversified portfolio of senior secured and second lien loans, allows the company to maintain initial leverage through October 2029 and involves the sale of ownership interests to the 2025 Issuer. The secured notes mature in 2037, while the subordinated notes are due in 2125.

The most recent analyst rating on (MSDL) stock is a Hold with a $17.00 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 Balances Growth and Challenges in Latest Earnings Call

The recent earnings call for Morgan Stanley Direct Lending Fund (MSDL) painted a picture of balanced sentiment, reflecting both promising developments and notable challenges. The company reported solid net investment income and successful debt refinancing, alongside a diversified high-quality portfolio. However, these achievements were tempered by a slight decline in investment income, new nonaccruals, and spread compression, resulting in an overall balanced outlook.