Education
About Us
Working with TipRanks
Follow Us
New Mountain Finance (NMFC)
NASDAQ:NMFC
Top Page
New Mountain Finance
(NASDAQ:NMFC)
66Neutral
New Mountain Finance (NMFC) vs. S&P 500 (SPY)
Market Cap
$1.06B
Dividend Yield12.97%
Average Volume (3M)678.75K
Price to Earnings (P/E)9.6
Beta (1Y)0.53
Revenue Growth-3.55%
EPS Growth-20.43%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength79
IndustryAsset Management
Share Statistics
EPS (TTM)1.03
Shares Outstanding107,851,420
10 Day Avg. Volume833,618
30 Day Avg. Volume678,745
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)18.09
Price to Cash Flow (P/CF)1.50
P/FCF Ratio1.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$11.00Price Target Upside18.15% Upside
Rating ConsensusHold
Number of Analyst Covering1
New Mountain Finance Business Overview & Revenue Model
Company DescriptionNew Mountain Finance Corporation (Nasdaq: NMFC), a business development company is a private equity / buyouts and loan fund specializes in directly investing and lending to middle market companies in defensive growth industries. The fund prefers investing in buyout and middle market companies. It also makes investments in debt securities at all levels of the capital structure including first and second lien debt, unsecured notes and mezzanine securities. In some cases, its investments may also include equity interests. It targets energy, specialty chemicals and materials, trading companies and distributors, commercial printing, diversified support services, education services, environmental and facilities services, office services and supplies, media, distributors, health care services, health care facilities, application software, business services, systems software, federal services, distribution and logistics, interactive home entertainment, telecommunication services, hydroelectric power generation, electric power generation by fossil fuels, electric power generation by nuclear fuels, health care technology, and security and alarm services. The fund seeks to invest in United States of America. It seeks to invest between $10 million and $50 million per transaction. The firm invests through both primary originations and open-market secondary purchases. It invests in companies with EBITDA between $10 million and $200 million and target investments up to a $125 million hold size. The fund seeks a majority stake in its portfolio companies.
How the Company Makes MoneyNew Mountain Finance Corporation makes money primarily through interest income generated from its debt investments in middle-market companies. The company extends loans to these businesses and earns revenue from the interest payments on these loans. Additionally, NMFC may also generate income from equity investments, including capital gains realized from the sale of these investments. The company benefits from its strategic partnerships and industry expertise, which help in sourcing attractive investment opportunities and managing investment risks effectively.
New Mountain Finance Financial Statement Overview
Summary
New Mountain Finance maintains a solid profitability profile with strong margins, but faces challenges in revenue growth and cash flow generation. The balance sheet reflects moderate leverage, which is manageable but requires careful monitoring due to high debt levels. The company's ability to improve revenue and cash flow will be crucial for sustaining its financial health in the long term.Income Statement
New Mountain Finance has shown a mixed performance on its income statement. The gross profit margin remains robust at 100% due to the nature of the business, and the net profit margin has improved to 39.3% in 2024 from 36.1% in 2023. However, total revenue decreased slightly by 0.85% from 2023 to 2024, indicating potential challenges in revenue growth. The EBIT margin is strong at 98.3%, reflecting efficient cost management. The absence of EBITDA data limits a complete profitability analysis.72
Positive
Balance Sheet
The balance sheet shows a stable financial position, with an equity ratio of 41.9%, indicating moderate leverage. The debt-to-equity ratio is 0.41, which is relatively low, suggesting manageable debt levels. The return on equity increased slightly to 10.7% in 2024, reflecting improved profitability. However, the asset base has decreased slightly, and the high debt levels pose a risk in economic downturns.65
Positive
Cash Flow
Cash flow analysis reveals a concerning trend with a significant decline in operating cash flow from $332.7 million in 2023 to $42 million in 2024. The free cash flow has also declined similarly, resulting in a limited ability to generate cash from operations relative to net income. The operating cash flow to net income ratio stands at 0.29, indicating a weaker cash conversion efficiency.58
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 371.67M | 374.84M | 89.09M | 203.65M | 59.99M | Gross Profit |
| 371.67M | 374.84M | 13.08M | 129.86M | -12.93M | EBIT |
| 365.25M | 285.10M | 176.66M | 201.63M | 57.48M | EBITDA |
| 0.00 | 0.00 | 76.23M | 4.96M | 0.00 | Net Income Common Stockholders |
| 113.44M | 135.34M | 74.73M | 201.40M | 58.47M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 80.32M | 70.09M | 2.47B | 58.08M | 78.97M | Total Assets |
| 3.25B | 3.16B | 3.35B | 3.30B | 3.10B | Total Debt |
| 560.09M | 1.79B | 1.98B | 1.91B | 1.80B | Net Debt |
| 479.77M | 1.72B | 1.91B | 1.85B | 1.72B | Total Liabilities |
| 1.89B | 1.83B | 2.03B | 1.95B | 1.86B | Stockholders Equity |
| 1.36B | 1.32B | 1.31B | 1.32B | 1.22B |
| Cash Flow | Free Cash Flow | |||
| 42.00M | 332.73M | 35.01M | -22.06M | 301.06M | Operating Cash Flow |
| 42.00M | 332.73M | 35.01M | -22.06M | 301.06M | Investing Cash Flow |
| 0.00 | 0.00 | -32.16M | -86.94M | 222.71M | Financing Cash Flow |
| -31.36M | -333.88M | -21.50M | 1.20M | -270.67M |
New Mountain Finance Technical Analysis
Negative
9.31
Price Trends
11.03
Negative
11.01
Negative
11.07
Negative
Market Momentum
-0.03
Negative
50.10
Neutral
43.37
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NMFC, the sentiment is Negative. The current price of 9.31 is below the 20-day moving average (MA) of 10.64, below the 50-day MA of 11.03, and below the 200-day MA of 11.07, indicating a bearish trend. The MACD of -0.03 indicates Negative momentum. The RSI at 50.10 is Neutral, neither overbought nor oversold. The STOCH value of 43.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NMFC.
New Mountain Finance Risk Analysis
New Mountain Finance disclosed 97 risk factors in its most recent earnings report. New Mountain Finance 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
New Mountain Finance Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $890.32M | 6.74 | 16.12% | 14.40% | 48.54% | 6.64% | |
74 Outperform | $824.32M | 8.61 | 9.67% | 10.85% | 14.33% | 25.35% | |
71 Outperform | $997.98M | 14.22 | 8.57% | 11.71% | 4.85% | -37.38% | |
69 Neutral | $1.24B | 19.23 | 3.96% | 15.84% | -28.04% | -69.52% | |
66 Neutral | $1.06B | 9.60 | 8.49% | 12.97% | -3.55% | -20.43% | |
66 Neutral | $964.70M | 8.07 | 10.49% | 11.25% | 12.24% | -3.21% | |
64 Neutral | $13.46B | 9.44 | 9.34% | 4.72% | 16.14% | -8.80% |
* Financial Sector Average
Performance Comparison
NMFC
New Mountain Finance
9.31
-1.93
-17.17%
CSWC
Capital Southwest
18.93
-3.53
-15.72%
SLRC
SLR Investment Corp.
14.50
0.87
6.38%
GSBD
Goldman Sachs BDC
10.20
-2.93
-22.32%
BCSF
Bain Capital Specialty Finance
14.25
0.09
0.64%
TRIN
Trinity Capital
13.81
1.14
9.00%
New Mountain Finance Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -18.40% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance by NMFC, highlighted by a successful transaction with UniTek, stable dividends, and strong credit performance. However, there were challenges such as a decline in net asset value, decreased investment income, and a slower-than-expected M&A environment. Despite these challenges, the company's strategic focus and strong recurring earnings support a positive outlook.Highlights
Successful UniTek Global Services Transaction
BTG Pactual Strategic Capital invested $90 million in UniTek, valuing it at $370 million, resulting in a two times multiple on the original cost basis for NMFC and returning $42 million through full redemption of UniTek's debt tranches.
Stable Dividend and Strong Recurring Earnings
Adjusted net investment income for the quarter was $0.32 per share, covering the $0.32 per share regular dividend. A $0.32 dividend was announced for March 31, supported by recurring earnings and a renewed dividend protection program.
Strong Credit Performance and Low Non-Accruals
The portfolio had no new non-accruals during the quarter, and only 1.2% of the portfolio was on non-accrual. NMFC has experienced only 12 basis points of average annualized net realized losses over nearly 14 years.
Increase in Senior-Oriented Assets
The portfolio mix evolved to 75% senior-oriented assets, with a focus on maintaining or increasing this mix, which includes first lien and unitranche loans.
Consistent Performance and Dividend Returns
Since its IPO in 2011, NMFC has returned approximately $1.4 billion to shareholders, generating an annualized return of 10% and a dividend yield of approximately 11%.
Lowlights
Decline in Net Asset Value
Net asset value per share declined by $0.07 (0.6%), attributed to modest declines in the value of Inventum and Health Systems, with particular concerns around Health Systems' smaller business segments.
Decreased Total Investment Income
Total investment income for the quarter was $91 million, a 2% decrease over the prior year, and total investment income for the year decreased by 1%.
Challenges in M&A Activity
M&A activity has been slower than expected in early 2025, with ongoing uncertainty across political and regulatory headlines, and a continued high base rate environment affecting deal activity.
Spread Compression in Direct Lending
Spreads have tightened over the last twelve to eighteen months, affecting deal structures despite compelling opportunities in defensive growth verticals.
Company Guidance
During New Mountain Finance Corporation's Q4 2024 earnings call, key financial metrics were highlighted by the management team. Adjusted net investment income was reported at $0.32 per share, effectively covering the $0.32 per share regular dividend disbursed in December. The net asset value per share stood at $12.55, marking a slight decline of $0.07 or 0.6% from the previous quarter. The call also emphasized the absence of new non-accruals and the maintenance of a robust portfolio with no companies rated red on their risk heat map. Looking forward, a $0.32 dividend for Q1 2025 was announced, with plans to pay it on March 31 to shareholders of record as of March 17. Additionally, the company completed a strategic transaction involving the sale of a stake in UniTek Global Services, which resulted in a $42 million return through a partial exit and a retained 31% ownership stake, aligning with the firm's strategic priorities. The call underscored NMFC's commitment to maintaining a senior-oriented asset portfolio and highlighted a diversified approach across defensive, non-cyclical sectors. The firm also noted the strategic focus on optimizing liabilities, with an aim to have 75% of its liabilities as floating rate over the next year.New Mountain Finance Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
New Mountain Finance Reports Q4 2024 Financial Results
Positive
Feb 26, 2025
On February 26, 2025, New Mountain Finance Corporation announced its financial results for the fourth quarter and year ended December 31, 2024, reporting a net investment income of $0.32 per share. The company declared a first quarter 2025 distribution of $0.32 per share, payable on March 31, 2025. A significant event was the partial exit from its investment in UniTek Global Services, Inc., which valued UniTek at $370 million, above its current mark. This move is part of NMFC’s strategy to diversify its top positions and optimize its liabilities, reflecting strong credit performance and strategic focus on senior-oriented assets.
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.