New Mountain Finance (NMFC) AI Stock Analysis

• Market Cap: $805.44M
• Dividend Yield: 14.17%
• Average Volume (3M): 1.23M
• Price to Earnings (P/E): 58.7
• Beta (1Y): 0.44
• Revenue Growth: 36.15%
• EPS Growth: -38.59%
• Country: US
• Employees: N/A
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 0.32
• Shares Outstanding: 100,806,570
• 10 Day Avg. Volume: 1,282,577
• 30 Day Avg. Volume: 1,234,074
• PEG Ratio: -0.70
• Price to Book (P/B): 0.83
• Price to Sales (P/S): 2.64
• P/FCF Ratio: 2.58
• Enterprise Value/Market Cap: 2.97
• Enterprise Value/Revenue: 6.47
• Enterprise Value/Gross Profit: 15.35
• Enterprise Value/Ebitda: 18.42
• 1Y Price Target: $8.17
• Price Target Upside: 2.25% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3
• EPS Forecast (FY): 1.11
• Revenue Forecast (FY): $256.93M

• Rating: 61 Neutral
• Price Target: $8.50 ▲(6.38% Upside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 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.

Proactive capital actions and fee alignment

Management executed structural actions — a large secondary sale to cut concentration and PIK, a permanent incentive-fee reduction to 15%, and ongoing buybacks. These moves materially lower leverage, reduce fee drag and improve cash yield sustainability and risk profile beyond the immediate quarter.

Conservative portfolio credit profile

High internal green ratings, low non‑accruals and a shift toward senior‑oriented loans (now ~81% pro forma) indicate durable credit discipline. A mostly senior, cash‑paying portfolio supports stable investment income and lowers default sensitivity over a multi‑quarter horizon.

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.

Declining revenue and reporting volatility

Sustained top‑line weakness and inconsistent reported line items undermine visibility into recurring investment income trends. Revenue declines compress long‑term earnings power and, combined with volatile reporting, make forecasting distributions and capital deployment less reliable over the next several quarters.

Idiosyncratic concentration losses

A few concentrated underperformers drove most of the NAV hit, demonstrating idiosyncratic risk in the portfolio. Restructurings and equity markdowns can lead to prolonged non‑cash losses and slower recovery of capital, pressuring NAV and income durability over multiple quarters.

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 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 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 traditional fixed-income investments. Additionally, NMFC may earn management fees for managing its investment portfolio, as well as potential performance fees based on the returns generated for its investors. The company also benefits from strategic partnerships with private equity firms and financial institutions, which can enhance deal flow and provide access to quality investment opportunities. The overall revenue model is designed to capitalize on the interest earned from investments, providing a steady stream of income while also focusing on capital appreciation.

New Mountain Finance Financial Statement Overview

Summary

Fundamentals are moderately strong: profitability has been solid and free cash flow is consistently positive with a large 2025 rebound. Offsetting this, revenue has been declining recently and multiple line-item inconsistencies/zeros plus unusual leverage swings reduce confidence in reported trends.

Income Statement

Profitability is solid, with net profit margins consistently strong (roughly low-20% to mid-40% across 2020–2025), and net income holding up well despite softer top-line trends. However, revenue has been weak recently (down ~17% in 2025 and slightly negative in 2023–2024), and several profitability line items show inconsistencies/zeros (notably 2025 gross profit/EBIT/EBITDA), which reduces confidence in trend quality.

Balance Sheet

Leverage and returns look acceptable overall: return on equity has been positive and generally healthy (~5%–15%), and debt-to-equity was around ~1.35–1.51 from 2020–2024. The main concern is volatility in reported debt levels, with 2025 showing a dramatically lower debt-to-equity (~0.17) versus prior years, suggesting a major capital structure change (or data inconsistency) that makes balance-sheet trend analysis less clean.

Cash Flow

Cash generation is a clear positive: free cash flow is positive each year and matches operating cash flow in the data, with a very large step-up in 2025 (operating/free cash flow ~$379M vs ~$42M in 2024). Cash flow coverage of net income is also strong where observable (free cash flow to net income shown as 1.0). The key weakness is volatility—operating cash flow fell sharply in 2024 before rebounding—and one cash-flow coverage field is reported as 0.0 in 2025, limiting consistency.

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

• Technical Analysis Sentiment: Negative
• Last Price: 7.99
• 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 NMFC, the sentiment is Negative. The current price of 7.99 is below the 20-day moving average (MA) of 8.14, below the 50-day MA of 8.69, and below the 200-day MA of 9.32, indicating a bearish trend. The MACD of -0.25 indicates Positive momentum. The RSI at 41.52 is Neutral, neither overbought nor oversold. The STOCH value of 35.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NMFC.

New Mountain Finance Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BCSF	72 Outperform	$814.75M	8.24	8.75%	13.18%	-26.08%	-27.65%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
TRIN	66 Neutral	$1.24B	7.61	14.15%	13.53%	33.44%	25.22%
NMFC	61 Neutral	$805.44M	58.66	1.30%	14.17%	36.15%	-38.59%
CGBD	60 Neutral	$785.93M	10.97	6.74%	13.63%	-8.23%	-35.72%
SLRC	58 Neutral	$807.95M	8.73	9.31%	10.80%	-6.30%	-6.92%
PFLT	54 Neutral	$815.57M	23.58	3.44%	13.64%	36.91%	-48.79%

New Mountain Finance Corporate Events

New Mountain Finance Details Dividend Cut and Asset Sale

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 at September 30, 2025. The company’s portfolio stood at $2.76 billion across 114 companies, with roughly 80% in senior-oriented assets and about 95% rated green on its internal heatmap, reflecting management’s emphasis on credit quality.

The board declared a first-quarter 2026 distribution of $0.32 per share, payable March 31, 2026 to shareholders of record on March 17, 2026, and signaled a planned reduction of the dividend to $0.25 per share from the second quarter to align with lower base rates, tighter spreads and a more senior asset mix. NMFC also agreed to sell $477 million of assets at 94% of year-end fair value to diversify the portfolio, cut PIK income and enhance financial flexibility, while voluntarily cutting its incentive fee structure and continuing share repurchases, moves that underscore management’s focus on shareholder returns and balance-sheet strength.

The most recent analyst rating on (NMFC) stock is a Buy with a $10.50 price target. To see the full list of analyst forecasts on New Mountain Finance stock, see the NMFC Stock Forecast page.

New Mountain Finance refreshes board with director transition

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, market and financial guidance to the firm’s debt-focused investment business. To fill the vacancy, the board appointed veteran private equity and corporate finance executive John P. Malfettone as a director effective the same day, adding him to all key board committees and drawing on his extensive experience at firms including Clayton, Dubilier & Rice, Oak Hill Capital Partners and GE, as well as his existing roles within New Mountain affiliates, signaling continuity and depth in the company’s governance and oversight of its credit investing activities.

The most recent analyst rating on (NMFC) stock is a Sell with a $9.00 price target. To see the full list of analyst forecasts on New Mountain Finance stock, see the NMFC Stock Forecast page.