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Palmer Square Capital BDC Inc. (PSBD)
NYSE:PSBD
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Palmer Square Capital BDC Inc. (PSBD) AI Stock Analysis

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PSBD

Palmer Square Capital BDC Inc.

(NYSE:PSBD)

Rating:53Neutral
Price Target:
$15.00
▲(7.22%Upside)
Palmer Square Capital BDC Inc.'s overall score is influenced primarily by its financial performance challenges, including inconsistent revenue and negative cash flows. While technical analysis and corporate events provide some positive signals, the high P/E ratio and market volatility impact the valuation negatively. Nonetheless, the strong dividend yield offers a counterbalance for income-seeking investors.
Positive Factors
Investment Strategy
PSBD's unique strategy of investing across the liquid and private markets can generate attractive risk-adjusted returns.
Liquidity
Available liquidity was solid at $200M, with no debt maturities until 2028.
Negative Factors
Dividend
Lower base rates plus spread pressure drove PSBD to reduce the quarterly core dividend by 14%.
Financial Performance
Palmer Square Capital BDC lost $0.26/share equating to an ROE of -6.4% as it generated net losses of $21.3M, primarily due to marks driven by spread widening.
Profitability
Palmer Square reported core profitability was weaker than expected, and the core dividend was reset lower.

Palmer Square Capital BDC Inc. (PSBD) vs. SPDR S&P 500 ETF (SPY)

Palmer Square Capital BDC Inc. Business Overview & Revenue Model

Company DescriptionPalmer Square Capital BDC, Inc. engages in the provision of investment funds. It lends and invests in corporate debt securities of companies. The company was founded in 2019 and is headquartered in Mission Woods, KS.
How the Company Makes MoneyPalmer Square Capital BDC Inc. generates revenue primarily through the interest income received from its lending activities to middle-market companies. The company invests in a diversified portfolio of debt and equity securities, earning returns through interest payments on loans and potential capital appreciation from equity investments. Additionally, PSBD may generate income through fees associated with the origination and structuring of loans. Key revenue streams include interest income, dividend income from equity holdings, and fees from advisory and management services. Significant factors contributing to its earnings include the creditworthiness of portfolio companies, prevailing interest rates, and effective portfolio management strategies. The company may also engage in strategic partnerships with other financial institutions to enhance its investment capabilities and broaden its market reach.

Palmer Square Capital BDC Inc. Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 13.37%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive developments and challenges. While the company showcased strong capital deployment, transparency in reporting, and a low level of nonaccruals, it also faced a decrease in NAV and net investment income, along with unrealized losses due to market volatility. The sentiment is balanced between the highlights and lowlights.
Q1-2025 Updates
Positive Updates
Capital Deployment and Investment Income
In the first quarter, the team deployed $104.3 million of capital and generated total and net investment income of $31.2 million and $12.9 million, respectively, with a net investment income of $0.40 per share.
Monthly NAV Disclosure
Palmer Square Capital BDC remains the only public BDC to disclose monthly NAV, providing real-time visibility into the health and value of the portfolio, with the March NAV per share at $15.85.
Dividend Payout
The company paid a $0.39 per share first quarter total dividend, which includes a $0.03 supplemental distribution, and announced a second quarter base dividend of $0.36 per share.
Low Nonaccruals and PIK Income
The portfolio has among the industry's lowest levels of PIK income and nonaccruals, with nonaccruals representing just 0.24% of fair value.
Portfolio Diversity and Quality
The portfolio is 96% senior secured with a fair value of approximately $1.33 billion across 39 industries, and the 10 largest investments account for just 10.19% of the overall portfolio.
Negative Updates
Decrease in NAV and Investment Income
NAV per share decreased from $16.50 at the end of the fourth quarter of 2024 to $15.85 at the end of the first quarter of 2025. Total investment income was $31.2 million, down 10.3% from $34.8 million in the prior year period.
Net Realized and Unrealized Losses
During the first quarter of 2025, the company had total net realized and unrealized losses of $21.3 million compared to total net realized and unrealized gains of $6.6 million in the first quarter of 2024.
Market Volatility Impact
Recent market volatility, particularly in March, led to unrealized mark-to-market losses, with the portfolio experiencing tightened spreads and declines in syndicated loan prices.
Company Guidance
During Palmer Square Capital BDC's First Quarter 2025 Earnings Call, the company provided guidance on several key financial metrics and strategic approaches. The team deployed $104.3 million of capital, reporting total and net investment income of $31.2 million and $12.9 million, respectively, with net investment income per share at $0.40. The company declared a $0.39 per share first-quarter dividend, including a $0.03 supplemental distribution. Palmer Square's NAV per share was announced at $15.85 for March, maintaining a commitment to transparency by being the only public BDC to disclose monthly NAV. The firm emphasized its ability to adapt to volatile market conditions, highlighted by a robust credit management strategy and a diverse portfolio with a fair value of $1.33 billion. Despite recent market turbulence, Palmer Square reiterated its strategic focus on capturing value across corporate and structured credit, supported by a substantial $34 billion in assets under management and a shareholder-friendly fee structure. The company also reported a debt-to-equity ratio of 1.50x and maintained strong liquidity with $229.5 million in available liquidity. The management team noted ongoing market challenges but expressed confidence in navigating future uncertainties through its nimble portfolio and strategic investment approach.

Palmer Square Capital BDC Inc. Financial Statement Overview

Summary
Palmer Square Capital BDC Inc. faces significant challenges with inconsistent revenue and profitability, potentially due to market volatility or operational inefficiencies. The balance sheet remains relatively stable with no debt, reducing financial risk, but changes in stockholders' equity and assets suggest some instability. Negative cash flows are a critical concern, indicating potential liquidity issues. The company must focus on stabilizing revenues and improving operational efficiency to enhance its financial position.
Income Statement
42
Neutral
Palmer Square Capital BDC Inc. has experienced significant volatility in its revenue and profitability. The company showed a negative revenue growth rate from the previous year, indicating a challenging environment. The gross profit margin is stable, but the net profit margin is inconsistent, highlighting volatility in core operations. EBIT and EBITDA margins have been highly negative, which could indicate operational inefficiencies or restructuring costs.
Balance Sheet
55
Neutral
The balance sheet shows a moderate equity ratio, suggesting a balanced capital structure with a manageable level of leverage. The company has eliminated its total debt, significantly reducing financial risk. However, fluctuations in stockholders' equity and total assets over the years highlight potential instability. The return on equity is positive, reflecting some efficiency in generating profits from shareholders' investments.
Cash Flow
37
Negative
The cash flow statement indicates a challenging situation with a significant decline in operating cash flow. Free cash flow has also turned negative, raising concerns about the company's ability to generate cash internally. The operating cash flow to net income ratio is negative, reflecting inefficiencies in converting income into cash. The company has relied on financing to support cash flow, which might not be sustainable in the long term.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue125.74M109.18M-72.84M20.92M24.45M
Gross Profit107.53M101.82M-81.99M13.52M19.49M
EBITDA47.67M152.32M0.0027.68M31.47M
Net Income47.67M107.84M-74.48M19.06M26.73M
Balance Sheet
Total Assets1.43B1.12B1.06B1.22B667.49M
Cash, Cash Equivalents and Short-Term Investments2.77M65.88M1.65M1.09M682.58K
Total Debt804.16M641.83M641.31M649.91M393.15M
Total Liabilities893.20M659.86M694.01M764.49M414.35M
Stockholders Equity537.84M461.96M363.44M452.80M253.14M
Cash Flow
Free Cash Flow-200.60M57.12M25.11M-438.01M16.19M
Operating Cash Flow106.73M57.12M25.11M-438.01M16.19M
Investing Cash Flow-305.05M-26.65M35.40M-519.55M-586.26M
Financing Cash Flow201.25M-30.00M-24.56M438.42M570.75M

Palmer Square Capital BDC Inc. Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price13.99
Price Trends
50DMA
13.76
Positive
100DMA
13.45
Positive
200DMA
14.06
Negative
Market Momentum
MACD
0.09
Positive
RSI
51.33
Neutral
STOCH
22.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PSBD, the sentiment is Neutral. The current price of 13.99 is below the 20-day moving average (MA) of 14.04, above the 50-day MA of 13.76, and below the 200-day MA of 14.06, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 51.33 is Neutral, neither overbought nor oversold. The STOCH value of 22.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PSBD.

Palmer Square Capital BDC Inc. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (56)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
$519.11M7.9913.17%10.67%33.42%-28.30%
68
Neutral
$359.54M10.319.27%14.17%-24.05%28.25%
64
Neutral
$419.42M10.4210.83%10.76%17.67%128.48%
58
Neutral
$533.28M15.47-1.88%15.19%2.30%-63.97%
56
Neutral
$6.14B22.14-28.61%4.89%10.73%-32.66%
53
Neutral
$452.90M27.793.05%12.58%1.13%-86.09%
48
Neutral
$482.54M49.901.95%12.99%-66.59%
* General Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PSBD
Palmer Square Capital BDC Inc.
13.99
-0.74
-5.02%
GAIN
Gladstone Investment
14.02
1.90
15.68%
PNNT
Pennantpark Investment
7.44
1.13
17.91%
SAR
Saratoga Investment
25.19
4.98
24.64%
SCM
Stellus Capital
14.86
2.03
15.82%
CION
CION Investment Corp
10.06
-0.66
-6.16%

Palmer Square Capital BDC Inc. Corporate Events

Financial Disclosures
Palmer Square Capital BDC Announces June NAV Estimate
Neutral
Jul 15, 2025

Palmer Square Capital BDC Inc. announced that the unaudited estimate of its net asset value per share of common stock was $15.68 as of June 30, 2025. This valuation provides stakeholders with insight into the company’s financial standing at that time, reflecting its market position and potential implications for future performance.

The most recent analyst rating on (PSBD) stock is a Buy with a $17.00 price target. To see the full list of analyst forecasts on Palmer Square Capital BDC Inc. stock, see the PSBD Stock Forecast page.

DividendsFinancial Disclosures
Palmer Square Capital Announces Supplemental Dividend
Positive
Jun 23, 2025

On June 23, 2025, Palmer Square Capital BDC Inc. announced a supplemental dividend of $0.06 per share for the second quarter of 2025, payable on July 14, 2025, to shareholders of record as of June 27, 2025. This dividend, derived from the company’s excess quarterly undistributed net investment income, is in addition to the previously declared base dividend of $0.36 per share, reflecting Palmer Square’s strong financial performance and commitment to delivering value to its shareholders.

The most recent analyst rating on (PSBD) stock is a Buy with a $17.00 price target. To see the full list of analyst forecasts on Palmer Square Capital BDC Inc. stock, see the PSBD Stock Forecast page.

Financial Disclosures
Palmer Square Capital BDC Inc. Updates Net Asset Value
Neutral
Jun 13, 2025

Palmer Square Capital BDC Inc. announced that the unaudited estimate of its net asset value per share of common stock was $16.03 as of May 31, 2025. This financial update provides stakeholders with a snapshot of the company’s valuation, which can influence investor perception and market positioning.

The most recent analyst rating on (PSBD) stock is a Buy with a $17.00 price target. To see the full list of analyst forecasts on Palmer Square Capital BDC Inc. stock, see the PSBD Stock Forecast page.

DividendsFinancial Disclosures
Palmer Square Capital BDC Reports Q1 2025 Financial Results
Negative
May 7, 2025

Palmer Square Capital BDC Inc. announced its financial results for the first quarter of 2025, reporting a total investment income of $31.2 million, a decrease from the previous year’s $34.8 million. The company declared a second quarter base dividend of $0.36 per share and plans to announce a supplemental dividend in June. Despite a challenging macroeconomic environment, Palmer Square Capital BDC remains focused on shareholder alignment and transparency, with a portfolio primarily consisting of senior secured debt investments. The company’s net asset value per share decreased to $15.85 from $16.50 at the end of 2024, and it experienced total net realized and unrealized losses of $21.3 million compared to gains in the same period last year.

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.Date of analysis: Jun 24, 2025