Oaktree Specialty Lending (OCSL) AI Stock Analysis

• Market Cap: $1.10B
• Dividend Yield: 13.37%
• Average Volume (3M): 626.06K
• Price to Earnings (P/E): 34.1
• Beta (1Y): 0.53
• Revenue Growth: 22.17%
• EPS Growth: -46.78%
• Country: US
• Employees: N/A
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 0.42
• Shares Outstanding: 88,085,526
• 10 Day Avg. Volume: 672,129
• 30 Day Avg. Volume: 626,063
• PEG Ratio: -0.72
• Price to Book (P/B): 0.77
• Price to Sales (P/S): 3.75
• P/FCF Ratio: 7.89
• Enterprise Value/Market Cap: 2.41
• Enterprise Value/Revenue: 12.30
• Enterprise Value/Gross Profit: 19.77
• Enterprise Value/Ebitda: 30.97
• 1Y Price Target: $13.19
• Price Target Upside: 5.18% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): 1.5
• Revenue Forecast (FY): $296.83M

• Rating: 58 Neutral
• Price Target: $13.00 ▲(3.67% Upside)

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.

Senior‑secured, diversified portfolio

High first‑lien senior‑secured exposure (85% of portfolio; 92% of new originations) combined with small position sizes (<1% average, no position >2%) structurally reduces loss severity and idiosyncratic concentration. This positioning supports steadier recovery rates and more predictable interest income across credit cycles.

Attractive deployment yields and accelerating originations

Originations accelerated (quarterly funded ~$314M, net new ~$135M) at attractive all‑in spreads (~525bp) and ~9% yields on new private investments. Consistent deployment at these yields helps rebuild earning assets, supports recurring net investment income, and offsets lower benchmark rates over the medium term.

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.

Volatile cash generation

Cash generation is inconsistent (TTM FCF down ~56%), with prior years showing significant swings including operating outflows. This volatility weakens confidence in sustained dividend coverage and complicates multi‑period capital planning, making payout and reinvestment sensitivity higher during stress periods.

Asset‑quality marks and NAV pressure

Concentrated markdowns (Pluralsight equity marked to zero; accounted for a large share of marks) and a modest NAV decline ($16.64 to $16.30) highlight issuer/sector sensitivity. Residual nonaccruals (11 positions, ~3.1% of debt) signal persistent credit risk that can pressure earnings and NAV if weakness persists.

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 debt, expansions, sponsor-led acquisitions, preferred equity and management buyouts in small and mid-sized companies. It seeks to invest in education services, business services, retail and consumer, healthcare, manufacturing, food and restaurants, construction and engineering, and media and advertising sectors. It invests between $5 million to $75 million principally in the form of one-stop, first lien, and second lien debt investments, which may include an equity co-investment component in companies with enterprise value between $20 million and $150 million and EBITDA between $3 million and $50 million. The fund has a hold size of up to $75 million and may underwrite transactions up to $100 million. It primarily invests in North America. The fund seeks to be a lead investor in its portfolio companies.

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. Additionally, OCSL may realize gains from equity investments, which can contribute to its earnings. The company also benefits from its strategic affiliation with Oaktree Capital Management, L.P., which provides management expertise and access to a broad network of industry contacts. This partnership can enhance deal flow and investment opportunities, ultimately supporting the company's revenue generation and growth.

Oaktree Specialty Lending Financial Statement Overview

Summary

Strong TTM revenue growth (+24.7%) and solid TTM margins, but profitability and returns have cooled year-over-year (notably lower net margin in 2025 and ROE down to ~2–4%). Leverage is meaningful (debt ~1.61B vs. equity ~1.44B), and cash flows are positive but volatile (TTM FCF down ~56%).

Income Statement

TTM (Trailing-Twelve-Months) revenue growth is strong (+24.7%), but profitability is uneven versus prior years. TTM net margin (~30.7%) and operating margin (~25.9%) are solid, yet the annual net margin dropped sharply in 2025 (~11.3%) after exceptionally high profitability in 2021–2023. Overall, earnings power looks positive but less stable year-to-year than the headline growth suggests.

Balance Sheet

Leverage is meaningful for the business model: total debt is large (~$1.61B TTM) versus equity (~$1.44B), and annual debt-to-equity has generally hovered around ~1.0–1.1 in recent years. Returns on equity have cooled materially (mid-to-high single digits in 2023 down to ~2–4% in 2024–2025), which reduces the balance-sheet quality despite a sizable asset base (~$3.10B TTM).

Cash Flow

Cash generation is currently positive (TTM operating cash flow and free cash flow both ~$79.4M), but volatility is a key concern: TTM free cash flow fell sharply (down ~56.3%), and 2021 showed a significant operating cash outflow. While recent years (2023–2025 annual) are positive, the swingy cash profile lowers confidence in consistency through cycles.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	299.70M	186.23M	236.85M	86.04M	278.82M
Gross Profit	261.37M	57.61M	125.20M	39.11M	248.31M
EBITDA	151.02M	57.80M	119.06M	32.86M	240.84M
Net Income	33.92M	57.91M	117.33M	29.22M	237.26M
Balance Sheet
Total Assets	3.00B	3.20B	3.22B	2.65B	2.64B
Cash, Cash Equivalents and Short-Term Investments	79.63M	63.97M	136.45M	23.53M	29.33M
Total Debt	1.49B	1.64B	1.60B	1.30B	1.27B
Total Liabilities	1.54B	1.71B	1.70B	1.40B	1.32B
Stockholders Equity	1.47B	1.49B	1.52B	1.25B	1.31B
Cash Flow
Free Cash Flow	142.40M	19.08M	228.76M	22.39M	-230.52M
Operating Cash Flow	142.40M	19.08M	228.76M	22.39M	-230.52M
Investing Cash Flow	85.98M	0.00	0.00	0.00	0.00
Financing Cash Flow	-229.35M	-86.77M	-110.41M	-26.82M	224.19M

Oaktree Specialty Lending Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 12.54
• 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 OCSL, the sentiment is Negative. The current price of 12.54 is below the 20-day moving average (MA) of 12.65, below the 50-day MA of 12.88, and below the 200-day MA of 12.98, indicating a bearish trend. The MACD of -0.15 indicates Positive momentum. The RSI at 46.69 is Neutral, neither overbought nor oversold. The STOCH value of 32.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OCSL.

Oaktree Specialty Lending Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YRD	73 Outperform	$335.26M	1.92	12.53%	10.37%	10.48%	-30.67%
FINV	71 Outperform	$1.27B	3.42	17.73%	5.20%	9.32%	29.40%
AGM	70 Outperform	$1.84B	9.68	13.72%	3.40%	27.36%	12.55%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
BBDC	63 Neutral	$945.38M	9.19	8.60%	13.52%	-10.40%	-11.42%
LC	63 Neutral	$1.85B	13.88	9.55%	―	9.68%	94.85%
OCSL	58 Neutral	$1.10B	34.08	2.24%	13.37%	22.17%	-46.78%

Oaktree Specialty Lending Corporate Events

Oaktree Specialty Lending Appoints New Chief Operating Officer

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 previous roles at Deloitte Consulting LLP and Exxon Mobil Corporation. His appointment is expected to strengthen the company’s leadership team, although there are no material transactions involving him that require disclosure.

The most recent analyst rating on (OCSL) stock is a Hold with a $13.00 price target. To see the full list of analyst forecasts on Oaktree Specialty Lending stock, see the OCSL Stock Forecast page.