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OFS Capital
(NASDAQ:OFS)
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Rating:51Neutral
Price Target:
$3.50
▲(7.03% Upside)
Action:Reiterated
Date:07/31/26
The score is held back primarily by weakened financial performance (recent losses, revenue deterioration, and elevated leverage) and a weak technical trend (price below major moving averages). Partly offsetting these are currently strong cash generation and some positives from the earnings call around distribution coverage and ongoing deleveraging, though these are tempered by the significant NAV decline and unrealized losses discussed on the call.
Positive Factors
Strong cash generation
TTM operating and free cash flow of roughly $64.6M provides a durable internal funding source. Strong cash generation supports ongoing distributions, funds debt reduction and reinvestment into income assets, and supplies a multi‑month buffer against earnings volatility and mark‑to‑market swings.
Negative Factors
NAV decline from CLO marks
A $9.1M unrealized CLO equity depreciation drove an ~11% quarterly NAV decline, highlighting meaningful mark‑to‑market exposure in structured finance. Persistent spread volatility can depress NAV and constrict capital‑raising or redeployment options for several quarters, increasing balance‑sheet and investor‑confidence risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
TTM operating and free cash flow of roughly $64.6M provides a durable internal funding source. Strong cash generation supports ongoing distributions, funds debt reduction and reinvestment into income assets, and supplies a multi‑month buffer against earnings volatility and mark‑to‑market swings.
Read all positive factors
OFS Capital (OFS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$44.08M
Dividend Yield25.3%
Average Volume (3M)62.48K
Price to Earnings (P/E)―
Beta (1Y)0.65
Revenue Growth-43.53%
EPS Growth-316.63%
CountryUS
Employees47
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)-1.65
Shares Outstanding13,398,078
10 Day Avg. Volume38,667
30 Day Avg. Volume62,480
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.52
Price to Sales (P/S)-5.40
P/FCF Ratio1.46
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue>-0.01
Enterprise Value/Gross Profit>-0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.6
Revenue Forecast (FY)$32.27M
OFS Capital Business Overview & Revenue Model
Company Description
OFS Capital Corporation functions as a business development company, delivering adaptable capital solutions, predominantly through debt financing and, to a lesser degree, minority equity investments. The firm concentrates on U.S.-based middle-mark...
How the Company Makes Money
OFS Capital makes money primarily from investment income generated by its portfolio. The core revenue stream is interest income earned on debt investments (most notably senior secured loans) made to portfolio companies; this includes contractual c...
OFS Capital Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Negative
The call highlights meaningful operational and balance-sheet progress — including maintaining and covering the distribution, materially extending debt maturities, reducing leverage by $45.6M, and securing a tighter Natixis facility — as well as a large monetizable equity position in Fansteel. However, these positives are outweighed by notable negative trends: an ~11% quarter-over-quarter NAV decline driven by $9.1M of CLO equity unrealized losses (plus $2.3M on a nonaccrual loan), a decline in net investment income and yields, concentration risk around the Fansteel position (~26% of portfolio fair value), and expectations for further top-line pressure as deleveraging continues. Overall, the negatives appear to outweigh the positives.Positive Updates
Distribution Maintained and Covered
Quarterly distribution maintained at $0.17 per share and fully covered by net investment income of $0.18 per share (NII $2.5M), marking the second consecutive quarter the distribution was covered. Annualized yield on the quarterly distribution was 19.2% based on market price at March 31.
Negative Updates
Net Asset Value Decline
Net asset value (NAV) per share fell to $8.16 from $9.19 in the prior quarter, a decrease of approximately 11% ($1.03), primarily due to unrealized depreciation in CLO equity holdings and declines in loan prices driven by market sentiment.
Read all updates
Q1-2026 Updates
Positive
Negative
Distribution Maintained and Covered
Quarterly distribution maintained at $0.17 per share and fully covered by net investment income of $0.18 per share (NII $2.5M), marking the second consecutive quarter the distribution was covered. Annualized yield on the quarterly distribution was 19.2% based on market price at March 31.
Read all positive updates
Company Guidance
The call reiterated guidance to preserve capital, strengthen the balance sheet, and drive long‑term net investment income growth while monetizing noninterest‑earning equity (notably Fansteel) and maintaining disciplined underwriting; key metrics disclosed included maintained quarterly distribution of $0.17 per share (covering net investment income of $0.18 per share, or $2.5M), a quarterly distribution that implies a 19.2% annualized yield on the market price, total investment income of $8.9M (‑5% QoQ), total expenses of $6.4M (‑3% QoQ), and NAV of $8.16 per share (down $1.03, or ~11%, from $9.19) driven by $9.1M of unrealized depreciation on CLOs and $2.3M on a nonaccrual loan; portfolio and balance‑sheet metrics included $308.1M fair value across 56 issuers, portfolio mix (amortized cost) ~64% senior secured loans/25% structured finance/11% equity, 98% of loan holdings first‑lien, weighted average performing investment income yield ~12.5% (down ~1ppt), $7.8M unfunded commitments, nonaccruals down 0.7pp QoQ, Fansteel fair value ~$80.4M (since 2014 $200k cost has generated ~$5.1M of distributions, ~23x on cost), adviser platform $4.2B AUM (affiliate $32B), regulatory asset coverage ratio 154% (‑2pp QoQ), debt reduced $45.6M YoY with $16M of 4.75% notes repaid and $18M of aggregate repayments QoQ, revolver exposure trimmed $2M, earliest remaining maturity now 2028 after extending Bank of California facility to Feb 2028 and entering a Natixis facility (up to $80M, 3‑year reinvestment/5‑year maturity, matures 2031, 30 bps tighter than prior facility).OFS Capital Financial Statement Overview
Summary
Income Statement
18
Very Negative
Balance Sheet
44
Neutral
Cash Flow
63
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | -919.00K | -11.81M | 49.52M | 24.27M | 12.70M | 85.75M |
| Gross Profit | -17.89M | -28.32M | 32.88M | 4.79M | -4.33M | 68.23M |
| EBITDA | -23.53M | -33.09M | 28.51M | -57.00K | -7.18M | 57.09M |
| Net Income | -27.76M | -33.09M | 28.44M | -465.00K | -7.59M | 56.86M |
Balance Sheet | ||||||
| Total Assets | 304.46M | 346.71M | 428.12M | 469.82M | 520.72M | 569.05M |
| Cash, Cash Equivalents and Short-Term Investments | 3.98M | 3.36M | 6.07M | 45.35M | 14.94M | 43.05M |
| Total Debt | 36.80M | 217.64M | 246.66M | 299.73M | 331.75M | 344.81M |
| Total Liabilities | 191.85M | 223.52M | 255.90M | 307.81M | 340.29M | 365.30M |
| Stockholders Equity | 112.61M | 123.19M | 172.22M | 162.00M | 180.42M | 203.74M |
Cash Flow | ||||||
| Free Cash Flow | 64.55M | 43.64M | 33.01M | 21.37M | 2.95M | -12.01M |
| Operating Cash Flow | 64.55M | 43.64M | 33.01M | 21.37M | 2.95M | -12.01M |
| Investing Cash Flow | 26.26M | 0.00 | 0.00 | 60.20M | -107.55M | -216.11M |
| Financing Cash Flow | -70.81M | -46.35M | -72.29M | -51.15M | -31.06M | 17.35M |
OFS Capital Technical Analysis
Negative
3.27
Price Trends
3.46
Negative
3.45
Negative
3.97
Negative
Market Momentum
-0.03
Positive
36.82
Neutral
11.71
Positive
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 3.27 is below the 20-day moving average (MA) of 3.54, below the 50-day MA of 3.46, and below the 200-day MA of 3.97, indicating a bearish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 36.82 is Neutral, neither overbought nor oversold. The STOCH value of 11.71 is Positive, 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 99 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 1 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 | $137.45M | 15.89 | 3.58% | 17.99% | -58.30% | 2.72% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
57 Neutral | $72.10M | -1.93 | -26.36% | 24.71% | 2.83% | -679.99% | |
56 Neutral | $215.95M | 9.07 | 6.38% | 21.11% | 6.21% | -42.00% | |
55 Neutral | $151.28M | -3.63 | -24.71% | 29.79% | ― | -1756.77% | |
51 Neutral | $44.08M | -2.04 | -29.04% | 25.99% | -43.53% | -316.63% |
* Financial Sector Average
OFS
OFS Capital
3.36
-3.55
-51.38%
OXSQ
Oxford Square Capital
1.55
-0.30
-16.08%
WHF
WhiteHorse
6.39
-1.05
-14.08%
SCM
Stellus Capital
7.50
-4.73
-38.66%
GECC
Great Elm Capital
5.14
-3.99
-43.70%
OFS Capital Corporate Events
Executive/Board ChangesShareholder Meetings
OFS Capital Stockholders Approve Directors and Auditor Slate
Positive
Jun 10, 2026
On June 10, 2026, OFS Capital Corporation held its 2026 annual meeting of stockholders, with 8,728,411 shares represented in person or by proxy out of 13,398,078 eligible to vote. Stockholders elected Romita Shetty and Bilal Rashid as Class II dir...
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.