Education
About Us
Working with TipRanks
Follow Us
New Mountain Finance Corp. (NMFC)
:NMFC
Top Page
New Mountain Finance
(NASDAQ:NMFC)
Select Model
Select Model
Rating:65Neutral
Price Target:―
New Mountain Finance's strong profitability and undervaluation are key strengths, bolstered by a high dividend yield and strategic asset management. However, challenges in revenue growth, cash flow, and technical weaknesses suggest cautious optimism. The earnings call reflects a balanced outlook with strategic successes and areas of concern, warranting a moderate score.
New Mountain Finance (NMFC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$993.39M
Dividend Yield13.4%
Average Volume (3M)806.67K
Price to Earnings (P/E)12.7
Beta (1Y)0.43
Revenue Growth36.15%
EPS Growth-38.59%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)0.32
Shares Outstanding103,155,815
10 Day Avg. Volume675,858
30 Day Avg. Volume806,673
Financial Highlights & Ratios
PEG Ratio-0.51
Price to Book (P/B)0.89
Price to Sales (P/S)9.81
P/FCF Ratio28.92
Enterprise Value/Market Cap2.75
Enterprise Value/Revenue9.32
Enterprise Value/Gross Profit13.93
Enterprise Value/Ebitda17.42
Forecast
1Y Price Target
$10.00Price Target Upside3.31% Upside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
New Mountain Finance Business Overview & Revenue Model
Company DescriptionNew Mountain Finance Corporation (NMFC) is a business development company that primarily invests in middle-market companies across a wide range of sectors in the United States. The company focuses on providing capital solutions, such as senior and subordinated debt, to support growth, acquisitions, and recapitalizations. NMFC aims to generate current income and capital appreciation through its diversified portfolio of investments in private 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 Earnings Call Summary
Earnings Call Date:Nov 03, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 02, 2026
Earnings Call Sentiment Neutral
The earnings call highlights NMFC's strong dividend coverage, strategic focus on defensive sectors, and successful historical performance. However, challenges such as a decline in net asset value, nonaccruals, and portfolio concentration present concerns. The sentiment is balanced with both positive initiatives and notable challenges.Q3-2025 Updates
Positive Updates
Dividend Coverage and Stock Buyback Program
Adjusted net investment income for the quarter was $0.32 per share, covering the $0.32 per share dividend. NMFC has fully utilized a $50 million stock repurchase program and announced a new $100 million buyback.
Portfolio Quality and Strategic Initiatives
Approximately 95% of NMFC's investments are rated green, and the company is exploring a $500 million portfolio sale to diversify and reduce PIK income.
Strong Historical Performance
Since its IPO in 2011, NMFC has returned approximately $1.5 billion to shareholders with a low net realized loss rate of just 1 basis point.
Continued Focus on Defensive Growth Sectors
NMFC focuses on lending to sectors with sustainable tailwinds, avoiding volatile and cyclical industries.
Negative Updates
Net Asset Value Decline
Net asset value per share declined $0.15 compared to Q2, to $12.06, due to modest declines in four investments.
Nonaccrual Challenges
The first lien debt position in Beauty Industry Group moved to nonaccrual status due to weaker consumer demand and China supply chain tariffs.
Portfolio Concentration Issues
High concentration in certain large positions necessitates a portfolio sale to achieve better diversification.
Impact of Capital Structure on Edmentum
Edmentum's valuation is pressured by expensive PIK securities, despite the company performing well.
Company Guidance
During the New Mountain Finance Corporation's Third Quarter 2025 earnings call, several key metrics and strategic plans were highlighted. The company reported an adjusted net investment income of $0.32 per share, matching its quarterly dividend payout. The net asset value per share decreased by $0.15 from the previous quarter to $12.06, attributed to declines in four specific investments. NMFC maintained a loan-to-value ratio of 45% and 95% of its investments were rated as green. The firm's stock is trading at a 20% discount to book value, offering a 13% yield on its $0.32 quarterly dividend. Additionally, NMFC completed a $50 million stock repurchase program and announced a new $100 million buyback plan. The company is exploring a $500 million portfolio sale to enhance financial flexibility and reduce exposure to PIK income. Since its IPO in 2011, NMFC has returned approximately $1.5 billion to shareholders, generating an annualized return of 10%, and it continues to hold investment-grade ratings from Moody's and Fitch.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 | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 292.79M | 329.83M | 374.84M | 89.09M | 203.65M | 59.99M |
| Gross Profit | 195.94M | 123.78M | 374.84M | 13.08M | 129.86M | -12.93M |
| EBITDA | 156.67M | 116.88M | 0.00 | 76.23M | 4.96M | 0.00 |
| Net Income | 104.13M | 113.44M | 135.34M | 74.73M | 201.40M | 58.47M |
Balance Sheet | ||||||
| Total Assets | 3.09B | 3.25B | 3.16B | 3.35B | 3.30B | 3.10B |
| Cash, Cash Equivalents and Short-Term Investments | 63.68M | 80.32M | 70.09M | 2.47B | 58.08M | 78.97M |
| Total Debt | 454.99M | 560.09M | 1.79B | 1.98B | 1.91B | 1.80B |
| Total Liabilities | 1.83B | 1.89B | 1.83B | 2.03B | 1.95B | 1.86B |
| Stockholders Equity | 1.26B | 1.36B | 1.32B | 1.31B | 1.32B | 1.22B |
Cash Flow | ||||||
| Free Cash Flow | 438.93M | 42.00M | 332.73M | 35.01M | -22.06M | 301.06M |
| Operating Cash Flow | 438.93M | 42.00M | 332.73M | 35.01M | -22.06M | 301.06M |
| Investing Cash Flow | 158.79M | 0.00 | 0.00 | -32.16M | -86.94M | 222.71M |
| Financing Cash Flow | -410.52M | -31.36M | -333.88M | -21.50M | 1.20M | -270.67M |
New Mountain Finance Technical Analysis
Negative
9.68
Price Trends
9.69
Negative
9.92
Negative
9.99
Negative
Market Momentum
0.02
Negative
49.64
Neutral
45.09
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 9.68 is above the 20-day moving average (MA) of 9.49, below the 50-day MA of 9.69, and below the 200-day MA of 9.99, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 49.64 is Neutral, neither overbought nor oversold. The STOCH value of 45.09 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $1.07B | 6.80 | 16.18% | 14.16% | 33.44% | 25.22% | |
72 Outperform | $846.69M | 9.40 | 9.07% | 10.57% | -6.30% | -6.92% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | $884.31M | 10.54 | 7.03% | 14.25% | -8.23% | -35.72% | |
66 Neutral | $906.21M | 8.40 | 9.42% | 13.09% | -3.29% | -16.86% | |
65 Neutral | $993.39M | 12.73 | 5.43% | 13.40% | 36.15% | -38.59% | |
63 Neutral | $908.84M | 10.84 | 7.37% | 13.46% | 55.25% | -47.71% |
* Financial Sector Average
NMFC
New Mountain Finance
9.57
-0.46
-4.59%
PFLT
Pennantpark $
9.12
-0.99
-9.79%
SLRC
SLR Investment Corp.
15.15
0.50
3.41%
CGBD
Carlyle Secured Lending Inc
11.93
-2.79
-18.95%
BCSF
Bain Capital Specialty Finance
13.75
-1.47
-9.66%
TRIN
Trinity Capital
14.41
2.13
17.35%
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
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.