New Mountain Finance (NMFC)
NASDAQ:NMFC
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New Mountain Finance
(NASDAQ:NMFC)
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Rating:61Neutral
Price Target:
$8.50
â–²(10.10% Upside)
Action:ReiteratedDate:02/25/26
The score is driven mainly by moderately solid financial performance (strong cash generation and generally solid profitability, but with declining revenue and data-quality/volatility concerns). Technicals are notably weak and weigh on the rating, while valuation is supportive due to the moderate P/E and high yield. Earnings-call takeaways are mixed: proactive steps to improve portfolio quality and fees are offset by NAV pressure and sale-related marks/fees.
Positive Factors
Consistent free cash flow
NMFC shows durable cash-generation capacity with positive free cash flow each year and a large 2025 rebound. Reliable FCF underpins sustainable distributions, repurchases and reinvestment into higher‑quality, cash‑paying loans, improving financial flexibility over the next several quarters.
Negative Factors
NAV pressure from marks and sale haircut
Material NAV markdowns and a realized sale at a ~6% discount crystallize losses and reduce book value. That structural NAV pressure constrains headroom for dividend increases, limits equity cushion for credit stress and may require several quarters of outperformance to rebuild book value.
Read all positive and negative factors
Positive Factors
Negative Factors
Consistent free cash flow
NMFC shows durable cash-generation capacity with positive free cash flow each year and a large 2025 rebound. Reliable FCF underpins sustainable distributions, repurchases and reinvestment into higher‑quality, cash‑paying loans, improving financial flexibility over the next several quarters.
Read all positive factors
New Mountain Finance (NMFC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$786.29M
Dividend Yield14.17%
Average Volume (3M)1.52M
Price to Earnings (P/E)59.3
Beta (1Y)0.41
Revenue Growth36.15%
EPS Growth-38.59%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)0.32
Shares Outstanding100,806,570
10 Day Avg. Volume1,610,696
30 Day Avg. Volume1,517,035
Financial Highlights & Ratios
PEG Ratio-0.70
Price to Book (P/B)0.83
Price to Sales (P/S)2.64
P/FCF Ratio2.58
Enterprise Value/Market Cap3.02
Enterprise Value/Revenue6.41
Enterprise Value/Gross Profit15.20
Enterprise Value/Ebitda18.24
Forecast
1Y Price Target
$8.20Price Target Upside6.22% Upside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)1.11
Revenue Forecast (FY)$254.87M
New Mountain Finance Business Overview & Revenue Model
Company Description
New 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 i...
How the Company Makes Money
New Mountain Finance generates revenue primarily through interest income from the loans and debt securities it holds in its investment portfolio. The company typically invests in senior secured loans, which offer higher yields compared to traditio...
New Mountain Finance Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 11, 2026
Earnings Call Sentiment Positive
The call conveyed a constructive and proactive tone: management demonstrated that Q4 dividend was fully covered (adjusted NII $0.32), executed significant strategic actions (a $477M sale at 94% of marks) to reduce concentration, lower PIK exposure (expected -20%–25%), and improve the balance sheet (pro forma leverage ~0.9x). They also committed to permanent incentive fee alignment (15%) and retained strong liquidity and repurchase activity. Offsetting these positives were a Q4 NAV decline (-4.5% q/q), concentrated markdowns (Edmentum and Affordable Care driving most of the NAV hit), modestly lower investment income (-4% q/q), and a small sale-related haircut (~6%) plus ~$7M of transaction fees. Overall, management’s actions and healthy recurring cash income mitigate the recent mark-driven headwinds and position the company to improve portfolio composition and earnings over time.Positive Updates
Dividend Coverage and Near-Term Payout
Adjusted net investment income (NII) for Q4 was $0.32 per share, which covered the $0.32 per share dividend paid on December 31. The Board declared a $0.32 dividend payable March 31, 2026 (record March 17).
Negative Updates
Quarterly NAV Decline
Net asset value (NAV) declined to $11.52 per share at 12/31/25 from $12.06 the prior quarter, a reduction of ~4.5% quarter-over-quarter. The company also expects the 94% sale price to initially reduce book value by another ~$0.35 to ~$11.17 per share pro forma.
Read all updates
Q4-2025 Updates
Positive
Negative
Dividend Coverage and Near-Term Payout
Adjusted net investment income (NII) for Q4 was $0.32 per share, which covered the $0.32 per share dividend paid on December 31. The Board declared a $0.32 dividend payable March 31, 2026 (record March 17).
Read all positive updates
Company Guidance
The company guided that it will pay a Q1 dividend of $0.32 per share on March 31, continue its dividend protection by reducing the incentive fee to 15% through the end of 2026 (and intends to keep 15% permanently thereafter), and expects a long‑term sustainable dividend of roughly $0.25 per quarter beginning Q2 2026 (based on about $0.27 of quarterly net investment income), noting $1 per year would equal a ~9% yield on pro forma book value and ~12% on the current share price; pro forma for the announced $477 million asset sale (to close in March) — at 94% of 12/31/25 marks — NAV is expected to fall from $11.52 to ≈$11.17 (a ≈$0.35 impact), leverage should decline to ~0.9x from 1.21x, senior‑oriented assets should rise to 81% from 75%, top‑5 concentration to ~14%, PIK income is expected to decrease 20–25% (with ~41% of pro‑forma PIK from Benevis and UniTek), and the firm highlighted other cash/earnings levers including potential accretive buybacks (repurchased ~$52M in 2025 and ~$15M YTD with ~$80M authorization remaining), redeployment into first‑lien loans, and targeted loan purchases — all against current metrics of Q4 adjusted NII of $0.32/share, total investment income of $77M, net expenses of $44M, an effective incentive fee of 8.4%, 97% recurring income, 77% cash income/15% PIK, 95% of the portfolio rated green, non‑accruals at 1.4%, $2.8B of investments, $2.9B total assets, $1.2B NAV, $1.5B statutory debt, $2.3B total borrowing capacity with ~$650M revolver availability and $210M unfunded commitments.New Mountain Finance Financial Statement Overview
Summary
Income Statement
61
Positive
Balance Sheet
58
Neutral
Cash Flow
74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 370.24M | 329.83M | 341.98M | 347.33M | 267.10M |
| Gross Profit | 309.67M | 123.78M | 374.84M | 89.09M | 203.65M |
| EBITDA | 303.66M | 116.88M | 0.00 | 83.83M | 207.41M |
| Net Income | 16.49M | 113.44M | 135.34M | 74.73M | 201.40M |
Balance Sheet | |||||
| Total Assets | 2.90B | 3.25B | 3.16B | 3.35B | 3.30B |
| Cash, Cash Equivalents and Short-Term Investments | 80.72M | 80.32M | 70.09M | 71.19M | 58.08M |
| Total Debt | 1.67B | 1.84B | 1.79B | 1.98B | 1.91B |
| Total Liabilities | 1.71B | 1.89B | 1.83B | 2.03B | 1.95B |
| Stockholders Equity | 1.18B | 1.35B | 1.32B | 1.31B | 1.32B |
Cash Flow | |||||
| Free Cash Flow | 378.98M | 42.00M | 76.00M | 70.12M | 51.69M |
| Operating Cash Flow | 378.98M | 42.00M | 76.00M | 70.12M | 51.69M |
| Investing Cash Flow | 314.24M | 0.00 | 256.80M | -36.92M | -68.01M |
| Financing Cash Flow | -389.98M | -31.36M | -333.96M | -19.69M | -4.53M |
New Mountain Finance Technical Analysis
Negative
7.72
Price Trends
8.01
Negative
8.42
Negative
8.82
Negative
Market Momentum
-0.05
Negative
47.25
Neutral
35.05
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 7.72 is above the 20-day moving average (MA) of 7.66, below the 50-day MA of 8.01, and below the 200-day MA of 8.82, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 47.25 is Neutral, neither overbought nor oversold. The STOCH value of 35.05 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $808.91M | 8.11 | 0.04% | 13.18% | -26.08% | -27.65% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $1.22B | 7.49 | 14.09% | 13.53% | 33.44% | 25.22% | |
61 Neutral | $786.29M | 59.29 | 1.29% | 14.17% | 36.15% | -38.59% | |
60 Neutral | $792.29M | 12.09 | 5.87% | 13.63% | -8.23% | -35.72% | |
58 Neutral | $785.59M | 9.11 | 9.32% | 10.80% | -6.30% | -6.92% | |
54 Neutral | $812.59M | -64.26 | 3.23% | 13.64% | 36.91% | -48.79% |
* Financial Sector Average
NMFC
New Mountain Finance
7.75
-1.92
-19.87%
PFLT
Pennantpark
8.15
-1.86
-18.56%
SLRC
SLR Investment Corp.
14.29
-1.03
-6.72%
CGBD
Carlyle Secured Lending Inc
11.29
-4.56
-28.77%
BCSF
Bain Capital Specialty Finance
12.41
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-15.23%
TRIN
Trinity Capital
14.63
1.03
7.57%
New Mountain Finance Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
New Mountain Finance Details Dividend Cut and Asset Sale
Negative
Feb 24, 2026
On February 24, 2026, New Mountain Finance Corporation reported fourth-quarter 2025 net investment income of $33.0 million, or $0.32 per share, matching the prior year’s quarter, while net asset value per share declined to $11.52 from $12.06...
Executive/Board Changes
New Mountain Finance refreshes board with director transition
Positive
Jan 16, 2026
On January 15, 2026, New Mountain Finance Corporation announced the retirement of long-serving independent director Alfred F. Hurley Jr., who had sat on the board since 2010 and was credited by the chairman with providing high-quality strategic, m...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.