Oaktree Specialty Lending (OCSL)
NASDAQ:OCSL
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Oaktree Specialty Lending
(NASDAQ:OCSL)
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Rating:58Neutral
Price Target:
$13.00
▲(8.60% Upside)
Action:ReiteratedDate:02/05/26
The score is driven primarily by mixed financial quality (strong recent growth and solid TTM profitability, but declining ROE, meaningful leverage, and volatile free cash flow). The earnings call was a positive offset with dividend coverage, strong deployment, and improving nonaccruals, while technicals remain weak (below key moving averages with negative MACD) and valuation is mixed (very high yield but a high P/E).
Positive Factors
Liquidity & Financial Flexibility
Large available liquidity (>$576M incl. $495M undrawn) provides durable funding optionality to deploy into middle‑market loans, support dividend payouts, and manage maturities. This cushion reduces near‑term refinancing risk and enables opportunistic originations during dislocations over the coming months.
Negative Factors
Meaningful leverage
Leverage is material (debt ≈$1.61B vs equity ≈$1.44B, debt/equity around 1.0–1.1), which amplifies NAV and earnings volatility. In a downturn or with credit mark activity, leverage can quickly erode book value and constrain dividend flexibility, limiting balance‑sheet resilience across cycles.
Read all positive and negative factors
Positive Factors
Negative Factors
Liquidity & Financial Flexibility
Large available liquidity (>$576M incl. $495M undrawn) provides durable funding optionality to deploy into middle‑market loans, support dividend payouts, and manage maturities. This cushion reduces near‑term refinancing risk and enables opportunistic originations during dislocations over the coming months.
Read all positive factors
Oaktree Specialty Lending (OCSL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.05B
Dividend Yield13.37%
Average Volume (3M)944.44K
Price to Earnings (P/E)50.0
Beta (1Y)0.58
Revenue Growth22.17%
EPS Growth-46.78%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength70
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)0.42
Shares Outstanding88,085,526
10 Day Avg. Volume1,121,077
30 Day Avg. Volume944,441
Financial Highlights & Ratios
PEG Ratio-0.72
Price to Book (P/B)0.77
Price to Sales (P/S)3.75
P/FCF Ratio7.89
Enterprise Value/Market Cap2.45
Enterprise Value/Revenue11.95
Enterprise Value/Gross Profit19.21
Enterprise Value/Ebitda30.09
Forecast
1Y Price Target
$12.00Price Target Upside0.25% Upside
Rating ConsensusHold
Number of Analyst Covering3
EPS Forecast (FY)1.51
Revenue Forecast (FY)$298.09M
Oaktree Specialty Lending Business Overview & Revenue Model
Company Description
Oaktree Specialty Lending Corporation is a business development company specializing in investments in middle market, bridge financing, first and second lien debt financing, unsecured and mezzanine loan, mezzanine debt, senior and junior secured d...
How the Company Makes Money
OCSL makes money primarily through interest income generated from its portfolio of debt investments. As a BDC, the company lends capital to middle-market companies, charging interest on these loans, which serves as the main revenue stream. Additio...
Oaktree Specialty Lending Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The call communicated a constructive operational and capital-deployment story: NII modestly increased, the dividend remained covered, originations accelerated meaningfully (up 42% sequentially) and liquidity remained ample. Portfolio positioning (high first-lien concentration, 9%+ yields on new investments) and reductions in nonaccruals year-over-year were clear positives. Offsetting items included a modest NAV decline (~2%), markdowns concentrated in a few names (notably Pluralsight), and a small decrease in adjusted total investment income (~3%) driven by lower reference rates. Overall the positives around disciplined deployment, strong liquidity, first-lien focus, and active credit management outweighed the isolated marks and modest income pressures.Positive Updates
Adjusted Net Investment Income and Dividend Coverage
Adjusted net investment income (NII) of $36.1M or $0.41 per share, up modestly from $35.4M / $0.40 in the prior quarter (approx +2%). The company fully covered its quarterly cash dividend and the board declared a $0.40 per share dividend.
Negative Updates
NAV Decline and Unrealized Depreciation
Net asset value (NAV) per share declined to $16.30 from $16.64 in the prior quarter, a decrease of $0.34 per share (approx -2.0%), driven by unrealized depreciation on certain debt and equity investments.
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Q1-2026 Updates
Positive
Negative
Adjusted Net Investment Income and Dividend Coverage
Adjusted net investment income (NII) of $36.1M or $0.41 per share, up modestly from $35.4M / $0.40 in the prior quarter (approx +2%). The company fully covered its quarterly cash dividend and the board declared a $0.40 per share dividend.
Read all positive updates
Company Guidance
Management's guidance emphasized capital deployment and liability optimization to support earnings and the dividend: Q1 adjusted net investment income was $36.1M ($0.41/share) and fully covered a $0.40/share quarterly cash dividend payable 03/31/2026 (record 03/16/2026); new funded investments totaled $314M (up from $220M), with new private investments averaging a 525 bp all‑in spread and 9% yield (new originations’ weighted spread ~500 bp, 92% first‑lien), growing the portfolio to ~$2.95B while paydowns/exits were $179M (net new investments $135M); liquidity stood at $576M ($81M cash + $495M undrawn) with $247M of unfunded commitments; portfolio metrics included 85% first‑lien senior secured, weighted‑average yield on debt 9.3%, portfolio company leverage 5.2x and interest coverage 2.2x, nonaccruals of 11 positions representing 3.1% of total debt (down ~85 bps YoY), NAV $16.30 (from $16.64), adjusted total investment income $74.5M (vs. $76.9M), total debt $1.6B with leverage 1.07x (up from 0.97x; target 0.9–1.25x), weighted average interest on debt 6.1% (from 6.5%), PIC usage 6.3% of investment income, JVs holding $111M (ROEs 12%, leverage 1.7x); management also said spreads have likely bottomed at SOFR+450–475 bp (direct lending ≈150 bp premium to syndicated loans) and may remain stable or widen, and they will redeploy proceeds from monetizations/nonaccrual recoveries to support earnings.Oaktree Specialty Lending Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
58
Neutral
Cash Flow
55
Neutral
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 216.14M | 299.70M | 186.23M | 236.85M | 86.04M | 278.82M |
| Gross Profit | 134.47M | 261.37M | 57.61M | 125.20M | 39.11M | 248.31M |
| EBITDA | 85.87M | 151.02M | 57.80M | 119.06M | 32.86M | 240.84M |
| Net Income | 32.29M | 33.92M | 57.91M | 117.33M | 29.22M | 237.26M |
Balance Sheet | ||||||
| Total Assets | 3.10B | 3.00B | 3.20B | 3.22B | 2.65B | 2.64B |
| Cash, Cash Equivalents and Short-Term Investments | 80.81M | 79.63M | 63.97M | 136.45M | 23.53M | 29.33M |
| Total Debt | 1.61B | 1.49B | 1.64B | 1.60B | 1.30B | 1.27B |
| Total Liabilities | 1.66B | 1.54B | 1.71B | 1.70B | 1.40B | 1.32B |
| Stockholders Equity | 1.44B | 1.47B | 1.49B | 1.52B | 1.25B | 1.31B |
Cash Flow | ||||||
| Free Cash Flow | 79.37M | 142.40M | 19.08M | 228.76M | 22.39M | -230.52M |
| Operating Cash Flow | 79.37M | 142.40M | 19.08M | 228.76M | 22.39M | -230.52M |
| Investing Cash Flow | -78.40M | 85.98M | 0.00 | 0.00 | 0.00 | 0.00 |
| Financing Cash Flow | -49.31M | -229.35M | -86.77M | -110.41M | -26.82M | 224.19M |
Oaktree Specialty Lending Technical Analysis
Positive
11.97
Price Trends
11.38
Positive
11.93
Positive
12.24
Negative
Market Momentum
0.15
Negative
64.76
Neutral
84.07
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OCSL, the sentiment is Positive. The current price of 11.97 is above the 20-day moving average (MA) of 11.32, above the 50-day MA of 11.38, and below the 200-day MA of 12.24, indicating a neutral trend. The MACD of 0.15 indicates Negative momentum. The RSI at 64.76 is Neutral, neither overbought nor oversold. The STOCH value of 84.07 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OCSL.
Oaktree Specialty Lending Risk Analysis
Oaktree Specialty Lending disclosed 70 risk factors in its most recent earnings report. Oaktree Specialty Lending 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
Oaktree Specialty Lending Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $153.80M | 28.48 | 0.54% | 10.37% | 10.48% | -30.67% | |
72 Outperform | $1.25B | 3.73 | 15.80% | 5.20% | 9.32% | 29.40% | |
69 Neutral | $873.26M | 9.47 | 8.69% | 13.52% | -10.40% | -11.42% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
61 Neutral | $1.70B | 16.10 | 9.47% | ― | 9.68% | 94.85% | |
58 Neutral | $1.05B | 50.03 | 2.21% | 13.37% | 22.17% | -46.78% | |
54 Neutral | $1.69B | 9.24 | 12.81% | 3.40% | 27.36% | 12.55% |
* Financial Sector Average
OCSL
Oaktree Specialty Lending
11.97
-0.24
-1.99%
AGM
Federal Agricultural
158.16
-7.46
-4.51%
BBDC
Barings BDC
8.34
0.92
12.38%
LC
LendingClub
14.77
5.53
59.85%
YRD
Yiren Digital
1.78
-3.63
-67.10%
FINV
FinVolution Group
4.95
-2.74
-35.64%
Oaktree Specialty Lending Corporate Events
Executive/Board Changes
Oaktree Specialty Lending Appoints New Chief Operating Officer
Neutral
Nov 14, 2025
On November 10, 2025, Oaktree Specialty Lending Corporation announced the election of Brett McKeone as Chief Operating Officer, effective December 31, 2025. Mr. McKeone, who has been with Oaktree since 2007, brings extensive experience from his pr...
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.