Morgan Stanley Direct Lending Fund (MSDL) AI Stock Analysis

• Market Cap: $1.53B
• Dividend Yield: 12.37%
• Average Volume (3M): 729.61K
• Price to Earnings (P/E): 9.1
• Beta (1Y): 0.51
• Revenue Growth: 2.70%
• EPS Growth: -35.08%
• Country: US
• Employees: N/A
• Sector: General
• Sector Strength: N/A
• Industry: Financial - Conglomerates
• EPS (TTM): 0.50
• Shares Outstanding: 86,835,014
• 10 Day Avg. Volume: 870,810
• 30 Day Avg. Volume: 729,610
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.35
• Enterprise Value/Revenue: 10.38
• Enterprise Value/Gross Profit: 12.35
• Enterprise Value/Ebitda: 11.16
• 1Y Price Target: $19.67
• Price Target Upside: 11.51% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 70 Outperform
• Price Target: $19.50 ▲(10.54% Upside)

Morgan Stanley Direct Lending Fund's strong financial performance and attractive valuation are offset by bearish technical indicators and challenges highlighted in the earnings call. Positive corporate events provide some support, but the stock's overall score reflects a need for caution due to current market momentum.

Positive Factors

Financial Performance

MSDL reported NOI of $0.66, ahead of the estimate and last quarter's performance, as leverage continues to ramp and repays build upon its top-line impact.

Market Position

MSDL was lead or co-lead on 90% of its deals during the quarter, which were concentrated in the 475 / 500 spread context.

Negative Factors

Credit Impact

Credit consumed approximately $0.06 of NAV, as a previously recognized loss on Matrix was realized.

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 demonstrates strong revenue growth and a robust balance sheet with zero debt, indicating financial stability. However, challenges in cash flow and volatile EBIT margins suggest areas for improvement in operational efficiency.

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	347.24M	253.06M	366.34M	230.80M	98.62M	24.06M
Gross Profit	291.77M	253.06M	316.51M	199.92M	100.50M	19.64M
EBITDA	322.97M	338.59M	343.90M	217.66M	104.27M	22.02M
Net Income	194.92M	215.56M	231.01M	48.54M	83.25M	18.30M
Balance Sheet
Total Assets	3.92B	3.91B	3.31B	2.99B	2.49B	656.81M
Cash, Cash Equivalents and Short-Term Investments	52.22M	72.37M	69.70M	81.22M	74.15M	11.26M
Total Debt	2.05B	1.97B	1.50B	1.52B	1.25B	333.85M
Total Liabilities	2.13B	2.07B	1.59B	1.59B	1.30B	355.19M
Stockholders Equity	1.79B	1.84B	1.72B	1.40B	1.19B	301.62M
Cash Flow
Free Cash Flow	-138.31M	-373.54M	185.78M	121.59M	67.69M	12.43M
Operating Cash Flow	-138.31M	-373.54M	185.78M	121.59M	67.69M	12.43M
Investing Cash Flow	1.66M	-575.01M	-269.60M	-551.43M	-1.73B	-625.78M
Financing Cash Flow	121.23M	376.19M	72.31M	436.90M	1.72B	624.58M

Morgan Stanley Direct Lending Fund Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 17.64
• 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 17.64 is below the 20-day moving average (MA) of 17.96, below the 50-day MA of 18.66, and below the 200-day MA of 19.14, indicating a bearish trend. The MACD of -0.32 indicates Negative momentum. The RSI at 38.00 is Neutral, neither overbought nor oversold. The STOCH value of 42.09 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
NCDL	75 Outperform	$782.79M	8.66	10.37%	12.57%	13.19%	-18.24%
MSDL	70 Outperform	$1.53B	9.14	9.34%	12.37%	2.70%	-35.08%
IBTA	67 Neutral	$723.03M	8.69	27.02%	―	3.49%	3378.45%
PSBD	60 Neutral	$447.19M	24.75	3.46%	12.64%	0.36%	-80.23%
TREE	59 Neutral	$941.43M	―	-40.91%	―	51.65%	58.63%
Sector *	56 Neutral	$6.56B	-1.65	0.45%	6.25%	14.92%	10.98%
PACS	51 Neutral	$1.81B	―	117.42%	―	―	―

Morgan Stanley Direct Lending Fund Corporate Events

Morgan Stanley Direct Lending Fund Declares Distribution

On August 5, 2025, Morgan Stanley Direct Lending Fund declared a regular distribution of $0.50 per share, payable on October 24, 2025. The company reported its financial results for the second quarter ending June 30, 2025, with net investment income of $43.7 million and a net asset value of $20.59 per share. The company also announced the successful pricing of $350 million in notes due May 2030, replacing $275 million in notes due September 2025. These financial maneuvers reflect the company’s strategic efforts to manage its debt and enhance shareholder value.

The most recent analyst rating on (MSDL) stock is a Buy with a $22.00 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 Sets Pricing for $401.2M CLO Transaction

On August 6, 2025, North Haven Private Credit CLO 1 LLC, a subsidiary of Morgan Stanley Direct Lending Fund, set pricing terms for a collateralized loan obligation (CLO) transaction, expecting to issue approximately $401.2 million in notes. This transaction, anticipated to close on September 17, 2025, is a secured financing move by the company, consolidating its asset coverage under the Investment Company Act of 1940, and highlights its strategic positioning in the credit market.

The most recent analyst rating on (MSDL) stock is a Buy with a $22.00 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 Announces Leadership Changes

On July 23, 2025, Jeffrey Levin announced his resignation as CEO and Director of Morgan Stanley Direct Lending Fund, effective around July 25, 2025. The board appointed Michael Occi as the new CEO and Director, Ashwin Krishnan as Chief Investment Officer, and Orit Mizrachi and Jeffrey Day as Co-Presidents, effective around the same date. These leadership changes are not due to any disagreements and aim to ensure a smooth transition and continued strategic focus for the company.

The most recent analyst rating on (MSDL) stock is a Buy with a $22.00 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 Q2 Results Announcement

On July 8, 2025, Morgan Stanley Direct Lending Fund announced it will release its financial results for the second quarter ending June 30, 2025, on August 7, 2025, after the market closes. The company will host an earnings call on August 8, 2025, to discuss these results, which may provide insights into its financial performance and strategic direction, potentially impacting stakeholders and market positioning.

The most recent analyst rating on (MSDL) stock is a Buy with a $22.00 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 Redeems $275M Series A Notes

On June 16, 2025, Morgan Stanley Direct Lending Fund redeemed $275 million in Series A Senior Notes due 2025, which were issued under a Master Note Purchase Agreement dated September 13, 2022. The redemption was executed at the full principal amount plus accrued interest, marking a significant financial maneuver for the company.

The most recent analyst rating on (MSDL) stock is a Buy with a $22.00 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 Elects New Directors

On June 2, 2025, Morgan Stanley Direct Lending Fund held its Annual Meeting of Stockholders, where 65,681,345 shares were represented, constituting a quorum. The meeting resulted in the election of Bruce D. Frank and Adam Metz as directors for a three-year term and the ratification of Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025.

The most recent analyst rating on (MSDL) stock is a Hold with a $20.50 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 Issues $350M Notes

On May 19, 2025, Morgan Stanley Direct Lending Fund announced the issuance of $350 million in 6.000% notes due in 2030, under a Third Supplemental Indenture with U.S. Bank Trust Company. The notes, which are general unsecured obligations, were offered and sold in a registered offering, with net proceeds of approximately $342.5 million intended for repaying outstanding secured debt and general corporate purposes. The company also entered into interest rate swaps to align its liabilities’ interest rates with its predominantly floating rate loan investment portfolio.

The most recent analyst rating on (MSDL) stock is a Buy with a $23.00 price target. To see the full list of analyst forecasts on Morgan Stanley Direct Lending Fund stock, see the MSDL Stock Forecast page.