Portman Ridge Finance (PTMN) AI Stock Analysis

• Market Cap: $131.99M
• Dividend Yield: 19.23%
• Average Volume (3M): 46.41K
• Price to Earnings (P/E): 41.0
• Beta (1Y): 0.24
• Revenue Growth: -37.27%
• EPS Growth: -153.39%
• Country: US
• Employees: N/A
• Sector: Financial
• Sector Strength: 82
• Industry: Asset Management
• EPS (TTM): -0.65
• Shares Outstanding: 9,198,175
• 10 Day Avg. Volume: 61,247
• 30 Day Avg. Volume: 46,415
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.39
• Price to Cash Flow (P/CF): 1.70
• P/FCF Ratio: 1.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $17.50
• Price Target Upside: 24.03% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Portman Ridge Finance's overall score reflects a stable financial base and positive free cash flow generation. However, declining revenues and net income, coupled with technical indicators pointing to bearish momentum, weigh negatively. The earnings call suggests potential growth through strategic initiatives like the proposed merger, but immediate challenges remain. Valuation concerns due to a high P/E ratio are somewhat offset by an attractive dividend yield.

Portman Ridge Finance Business Overview & Revenue Model

Company Description

Portman Ridge Finance Corporation is a business development company specializing in investments in unitranche loans (including last out), first lien loans, second lien loans, subordinated debt, equity co-investment, buyout in middle market companies. It also makes acquisitions in businesses complementary to the firm's business. It primarily invests in healthcare, cargo transport, manufacturing, industrial & environmental services, logistics & distribution, media & telecommunications, real estate, education, automotive, agriculture, aerospace/defense, packaging, electronics, finance, non-durable consumer, consumer products, business services, utilities, insurance, and food and beverage sectors. The fund typically invests $1 million to $20 million in its portfolio companies. It provides senior secured term loans from $2 million to $20 million maturing in five to seven years; second lien term loans from $5 million to $15 million maturing in six to eight years; senior unsecured loans $5 million to $23 million maturing in six to eight years; mezzanine loans from $5 million to $15 million maturing in seven to ten years; and equity investments from $1 to $5 million. The fund targets the companies with EBITDA between $5 million and $25 million. While investing in debt securities, it invests in those middle market firms with EBITDA between $10 million and $50 million and/or total debt between $25 million and $150 million. It invests in minority, and majority or control equity positions alongside its private equity sponsor partners.

How the Company Makes Money

Portman Ridge Finance makes money through interest income and capital gains derived from its investment portfolio, which includes debt and equity investments in small to medium-sized businesses. The company earns revenue by charging interest on loans and financing agreements, as well as by engaging in equity investments which can yield returns upon successful exits. Additionally, Portman Ridge may receive management fees and performance-based incentives from managing assets and investments, contributing further to its revenue streams. The firm also benefits from strategic partnerships with other financial entities, which can enhance deal flow and investment opportunities.

Portman Ridge Finance Financial Statement Overview

Summary

Portman Ridge Finance exhibits strengths in maintaining a strong equity base and generating positive free cash flow. However, challenges are apparent with declining revenues and net income, suggesting potential operational inefficiencies or market pressures. The elimination of debt reduces financial risk, providing a more stable financial foundation despite recent profitability issues.

Income Statement

The income statement reveals fluctuating revenue trends with a recent decline from $58.4M in 2023 to $46.9M in 2024, indicating a revenue contraction. Gross profit margin remained stable at 100% due to equivalent gross profit and revenue figures. EBIT margin declined slightly from 92.6% in 2023 to 92.2% in 2024, reflecting tighter operational efficiency. Net income has dropped significantly to zero in 2024 from $11.4M in 2023, impacting the net profit margin negatively.

Balance Sheet

The balance sheet shows a strong equity position with stockholders' equity at $178.5M against total assets of $453.6M, resulting in a healthy equity ratio of 39.4%. The company has significantly reduced its debt, leading to a zero debt-to-equity ratio, which minimizes leverage risk. However, the decline in stockholders' equity from $213.5M in 2023 suggests challenges in maintaining asset growth.

Cash Flow

Cash flow analysis indicates stable free cash flow at $56.6M in 2024. The company has managed positive operating cash flow of $56.6M, although it has decreased significantly from $120.9M in 2023. The operating cash flow to net income ratio is not calculable due to zero net income, but the substantial free cash flow to net income in previous years highlights efficient cash generation capabilities.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
46.90M	58.40M	54.24M	38.75M	37.46M
	Gross Profit
46.90M	58.40M	36.40M	20.54M	26.64M
	EBIT
43.24M	54.06M	28.89M	27.47M	31.57M
	EBITDA
0.00	36.69M	46.80M	41.51M	31.57M
	Net Income Common Stockholders
-5.93M	11.38M	-21.00M	26.03M	31.57M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
17.53M	26.91M	488.85M	28.92M	6.99M
	Total Assets
453.63M	549.24M	619.49M	648.30M	600.18M
	Total Debt
0.00	322.41M	373.31M	347.19M	373.31M
	Net Debt
-17.53M	-26.91M	368.16M	318.27M	366.32M
	Total Liabilities
275.14M	335.72M	387.36M	368.18M	383.91M
	Stockholders Equity
178.49M	213.52M	232.12M	280.12M	216.26M
Cash Flow		Free Cash Flow
56.63M	120.90M	-33.10M	61.15M	121.68M
	Operating Cash Flow
56.63M	120.90M	-33.10M	61.15M	121.68M
	Investing Cash Flow
0.00	98.76M	-61.24M	48.90M	97.06B
	Financing Cash Flow
-88.25M	-82.47M	-2.11M	-75.71M	-43.88M

Portman Ridge Finance Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 14.11
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PTMN, the sentiment is Negative. The current price of 14.11 is below the 20-day moving average (MA) of 15.27, below the 50-day MA of 15.99, and below the 200-day MA of 16.63, indicating a bearish trend. The MACD of -0.53 indicates Positive momentum. The RSI at 19.95 is Positive, neither overbought nor oversold. The STOCH value of 7.66 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PTMN.

Portman Ridge Finance Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARCC	76 Outperform	$15.13B	9.06	12.40%	8.68%	19.95%	-10.57%
MAIN	74 Outperform	$5.02B	9.68	19.26%	5.25%	51.80%	12.05%
GSBD	72 Outperform	$1.36B	21.21	3.96%	15.48%	-28.04%	-69.52%
HTGC	67 Neutral	$3.33B	11.93	13.71%	8.31%	-1.49%	-29.48%
Sector *	63 Neutral	$14.20B	10.11	9.01%	4.34%	16.34%	-11.27%
PSEC	63 Neutral	$1.83B	―	0.78%	16.83%	-31.63%	-0.75%
PTMN	49 Neutral	$131.99M	41.01	-3.03%	19.23%	-37.27%	-153.39%