OFS Capital (OFS)
NASDAQ:OFS
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OFS Capital
(NASDAQ:OFS)
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Rating:54Neutral
Price Target:
$3.50
▼(-27.84% Downside)
Action:ReiteratedDate:04/01/26
The score is driven mainly by mixed financial performance: strong cash generation and improved leverage are meaningful positives, but they are outweighed by a sharp TTM swing into heavy losses and unstable profitability. Technicals are also a headwind with the stock below key moving averages and a negative MACD. Valuation is supported by an unusually high dividend yield, while the earnings call points to constructive balance-sheet actions but near-term income/NAV pressure and rate-driven margin compression risk.
Positive Factors
Cash Generation
Sustained positive operating and free cash flow (~$35.1M TTM) provides durable internal funding for distributions, workout costs, and reinvestment without immediate reliance on capital markets. This cash generation cushions earnings volatility and supports capital preservation over the next several quarters.
Negative Factors
Earnings Volatility & Net Losses
Multi‑year swings from profits to losses and a large TTM net loss undermine confidence in recurring investment income. Persistent earnings volatility complicates dividend coverage and planning, heightening the risk that cash distributions and NAV stability will be pressured if credit marks or margin compression continue.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash Generation
Sustained positive operating and free cash flow (~$35.1M TTM) provides durable internal funding for distributions, workout costs, and reinvestment without immediate reliance on capital markets. This cash generation cushions earnings volatility and supports capital preservation over the next several quarters.
Read all positive factors
OFS Capital (OFS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$50.51M
Dividend Yield25.87%
Average Volume (3M)128.89K
Price to Earnings (P/E)―
Beta (1Y)0.43
Revenue Growth-14.76%
EPS GrowthN/A
CountryUS
Employees53
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)0.20
Shares Outstanding13,398,078
10 Day Avg. Volume88,409
30 Day Avg. Volume128,894
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.52
Price to Sales (P/S)2.24
P/FCF Ratio1.46
Enterprise Value/Market Cap1.99
Enterprise Value/Revenue2.58
Enterprise Value/Gross Profit52.74
Enterprise Value/Ebitda-3.49
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.25
Revenue Forecast (FY)$48.65M
OFS Capital Business Overview & Revenue Model
Company Description
OFS Capital Corporation is a business development company specializing in direct and fund investments as well as add-on acquisitions. It provides flexible capital solutions primarily through debt capital and to a lesser extent, minority equity inv...
How the Company Makes Money
OFS makes money primarily from the income it earns on its investment portfolio. The largest revenue driver is interest income from debt investments (e.g., senior secured and subordinated loans) made to portfolio companies; this includes cash-pay i...
OFS Capital Earnings Call Summary
Earnings Call Date:Mar 02, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 01, 2026
Earnings Call Sentiment Neutral
The call presents a mixed but balanced picture: management has taken concrete, constructive steps to strengthen the balance sheet (deleveraging, extending maturities, securing a tighter-cost credit facility) and preserves a high-yield distribution while maintaining a highly senior, diversified, predominantly first-lien loan portfolio. Offsetting these positives are near-term earnings pressures — notably a decline in net investment income, an approximately 10% drop in NAV, mark-to-market volatility in structured credit, and ongoing net interest margin compression risks tied to lower reference rates. Credit issues were limited but contributed to markdowns. Overall the company emphasizes capital preservation, active workout/recovery actions, and potential upside from monetizing a large Fansteel equity position.Positive Updates
Maintained Quarterly Distribution with High Yield
Declared and maintained quarterly distribution of $0.17 per share for 2026, representing a 14.3% annualized yield based on the market price of the common stock at quarter end.
Negative Updates
Net Investment Income Decline
Net investment income was $2.7M, or $0.20 per share, down $0.02 per share from the prior quarter (approximately a 9.1% decline on a per-share basis); top-line investment income decreased by $1.2M QoQ.
Read all updates
Q4-2025 Updates
Positive
Negative
Maintained Quarterly Distribution with High Yield
Declared and maintained quarterly distribution of $0.17 per share for 2026, representing a 14.3% annualized yield based on the market price of the common stock at quarter end.
Read all positive updates
Company Guidance
The company’s guidance reiterated a focus on preserving capital while defending and improving net investment income — it will maintain the quarterly distribution at $0.17 per share (a 14.3% annualized yield at quarter‑end market price) but expects further net interest margin compression as a result of Fed rate cuts (50 bps in 2025; 175 bps cumulative since Sept 2024) that will pressure yields on its predominantly floating‑rate loan book; to bolster flexibility and reduce rollover risk, management has extended debt maturities so the earliest remaining maturity is Feb 2028 (maturities now span 2028–2031), entered an $80.0M Natixis facility (3‑year reinvestment, 5‑year maturity, coupon 30 bps tighter than prior BNP facility), extended a $25.0M Banc of California facility to Feb 2028, repaid $15.0M in December and $16.0M in early February on its 4.75% unsecured notes, and reduced total debt by $18.8M; key portfolio and balance‑sheet metrics to watch include a regulatory asset coverage ratio of 156%, $342.0M portfolio fair value across 57 issuers, 100% senior‑secured loans with 95% in first‑lien positions by fair value, a weighted average performing investment income yield of 13.5% (up 0.2% QoQ), $13.2M of unfunded commitments, and a ~$79.4M fair value minority equity position in Fansteel that management is pursuing to monetize to boost NII and reduce concentration.OFS Capital Financial Statement Overview
Summary
Income Statement
28
Negative
Balance Sheet
62
Positive
Cash Flow
70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 28.53M | 47.96M | 56.94M | 12.70M | 85.75M |
| Gross Profit | 19.45M | 32.88M | 4.79M | -4.33M | 68.23M |
| EBITDA | -16.27M | 28.51M | -57.00K | -7.18M | 57.09M |
| Net Income | -33.09M | 28.44M | -465.00K | -7.59M | 56.86M |
Balance Sheet | |||||
| Total Assets | 346.71M | 428.12M | 469.82M | 520.72M | 569.05M |
| Cash, Cash Equivalents and Short-Term Investments | 3.36M | 6.07M | 45.35M | 14.94M | 43.05M |
| Total Debt | 217.64M | 246.66M | 299.73M | 331.75M | 344.81M |
| Total Liabilities | 223.52M | 255.90M | 307.81M | 340.29M | 365.30M |
| Stockholders Equity | 123.19M | 172.22M | 162.00M | 180.42M | 203.74M |
Cash Flow | |||||
| Free Cash Flow | 43.64M | 33.01M | 21.37M | 2.95M | -12.01M |
| Operating Cash Flow | 43.64M | 33.01M | 21.37M | 2.95M | -12.01M |
| Investing Cash Flow | 23.17M | 0.00 | 60.20M | -107.55M | -216.11M |
| Financing Cash Flow | -46.35M | -72.29M | -51.15M | -31.06M | 17.35M |
OFS Capital Technical Analysis
Negative
4.85
Price Trends
3.70
Negative
4.14
Negative
5.58
Negative
Market Momentum
-0.01
Negative
54.89
Neutral
84.59
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OFS, the sentiment is Negative. The current price of 4.85 is above the 20-day moving average (MA) of 3.25, above the 50-day MA of 3.70, and below the 200-day MA of 5.58, indicating a neutral trend. The MACD of -0.01 indicates Negative momentum. The RSI at 54.89 is Neutral, neither overbought nor oversold. The STOCH value of 84.59 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OFS.
OFS Capital Risk Analysis
OFS Capital disclosed 2 risk factors in its most recent earnings report. OFS Capital 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
OFS Capital Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
63 Neutral | $169.65M | 11.23 | 5.30% | 21.24% | -55.82% | -4.97% | |
59 Neutral | $109.42M | -13.03 | -2.90% | 14.03% | -34.92% | -132.22% | |
55 Neutral | $270.08M | 17.24 | 0.03% | 12.83% | 90.34% | -44.25% | |
54 Neutral | $50.51M | ― | -23.38% | 25.87% | -14.76% | ― | |
49 Neutral | $71.81M | -2.74 | -24.20% | 22.43% | 47.01% | -179.46% | |
46 Neutral | $161.89M | ― | -12.27% | 24.14% | -177.91% | 55.08% |
* Financial Sector Average
OFS
OFS Capital
3.63
-3.33
-47.82%
OXSQ
Oxford Square Capital
1.85
-0.21
-10.15%
WHF
WhiteHorse
7.63
-0.04
-0.55%
SCM
Stellus Capital
9.33
-1.49
-13.76%
MRCC
Monroe Capital
5.05
-1.05
-17.20%
GECC
Great Elm Capital
5.13
-2.84
-35.67%
OFS Capital Corporate Events
Business Operations and StrategyPrivate Placements and Financing
OFS Capital Amends Revolving Credit Facility for Flexibility
Neutral
Mar 27, 2026
On March 27, 2026, OFS Capital Corporation amended its senior secured revolving credit facility with Banc of California, which is used for general corporate purposes including funding new investments. The amendment reduces covenant pressure by low...
Business Operations and StrategyPrivate Placements and Financing
OFS Capital Secures New $80 Million Credit Facility
Positive
Feb 20, 2026
On February 18, 2026, OFSCC-FS, LLC, an indirect wholly owned subsidiary of OFS Capital Corporation, entered into a new revolving credit and security agreement providing for up to $80 million in borrowings, secured by a first-priority interest in ...
Private Placements and Financing
OFS Capital Extends Senior Secured Revolving Credit Facility
Positive
Jan 9, 2026
On January 9, 2026, OFS Capital Corporation amended its senior secured revolving credit facility with Banc of California, which provides financing for the company’s general corporate purposes and investment funding. The amendment primarily e...
Business Operations and StrategyPrivate Placements and Financing
OFS Capital to Fully Redeem Remaining 4.75% Notes
Positive
Jan 8, 2026
On January 8, 2026, OFS Capital Corporation notified holders of its 4.75% Notes due 2026 that it would exercise its option to redeem the remaining $16 million aggregate principal amount of these notes. The company will complete the redemption on F...
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.