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Portman Ridge Finance Corporation (PTMN)
NASDAQ:PTMN
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Portman Ridge Finance
(NASDAQ:PTMN)
Rating:48Neutral
Price Target:―
Portman Ridge Finance (PTMN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$106.39M
Dividend Yield16.26%
Average Volume (3M)41.16K
Price to Earnings (P/E)41.0
Beta (1Y)0.34
Revenue Growth-37.27%
EPS Growth-153.39%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength73
IndustryAsset Management
Share Statistics
EPS (TTM)0.47
Shares Outstanding9,202,870
10 Day Avg. Volume37,230
30 Day Avg. Volume41,157
Financial Highlights & Ratios
PEG Ratio0.10
Price to Book (P/B)0.62
Price to Sales (P/S)0.00
P/FCF Ratio3.66
Enterprise Value/Market Cap0.93
Enterprise Value/Revenue1.53
Enterprise Value/Gross Profit-25.21
Enterprise Value/Ebitda2.84
Forecast
1Y Price Target
$14.00Price Target Upside21.11% Upside
Rating ConsensusHold
Number of Analyst Covering1
Portman Ridge Finance Business Overview & Revenue Model
Company DescriptionPortman 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 MoneyPortman 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 Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: -2.78%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
The earnings call highlights strategic progress, such as the proposed merger with Logan Ridge and a disciplined investment strategy. However, the company faces challenges with decreased investment income, unrealized portfolio depreciation, and a high proportion of income being PIK. The balance between strategic opportunities and current financial setbacks results in a mixed outlook.Q1-2025 Updates
Positive Updates
Strategic Merger with Logan Ridge
The merger with Logan Ridge is seen as a meaningful step forward for the company, potentially providing increased scale, improved liquidity, and greater operational efficiency.
Net Suppliers of Capital
Portman Ridge reported $17.5 million in new investments and $15.7 million in repayments and sales, resulting in a net supplier of capital position.
Base Distribution Policy
The company has set a stable base distribution of $0.47 per share, anticipated to be sustainable across market cycles.
High Yield on New Investments
Overall yield on par value of new investments during the quarter was 10.6%, which is slightly below the current portfolio yield of 11%.
Strong Balance Sheet and Pipeline
The company reported a healthy pipeline, fortified balance sheet, and prudent investment strategy, with $52.6 million of available borrowing capacity.
Negative Updates
Decrease in Investment Income
Investment income decreased by $2.3 million compared to the previous quarter, primarily due to lower non-recurring paydown and fee income.
Unrealized Depreciation
The decline in net asset value was driven by unrealized depreciation on the portfolio, with a $5 million decrease in net asset value compared to the last quarter.
Non-Accrual Investments
The company had six investments on non-accrual status, representing 2.6% of the investment portfolio at fair value.
Lower Income from CLOs
There was a decrease of $1 million in income from CLOs, contributing to the lower overall investment income.
High Proportion of PIK Income
PIK income has increased, making up about 24% of total income, indicating some portfolio companies are underperforming.
Company Guidance
During the first quarter of 2025, Portman Ridge Finance Corporation provided guidance on several key metrics, illustrating both challenges and strategic initiatives. The company executed its investment strategy by deploying approximately $17.5 million into defensively positioned opportunities, while also experiencing $15.7 million in repayments and sales, thus becoming net suppliers of capital. The Board approved a base distribution of $0.47 per share, maintaining a sustainable dividend policy. The company reported a net investment income of $4.3 million, or $0.47 per share, representing a decrease from the prior quarter. Total expenses were reduced to $7.8 million, mainly due to lower interest expenses and management fees. Portman Ridge's debt portfolio, largely composed of first lien loans, reflected an upside potential of $32.8 million in incremental net value. The merger with Logan Ridge is anticipated to enhance scale, liquidity, and operational efficiency, aiming to drive long-term shareholder value amidst an uncertain macroeconomic environment.Portman Ridge Finance Financial Statement Overview
Summary
Portman Ridge Finance shows strengths in maintaining a strong equity base and generating positive free cash flow. However, it faces challenges with declining revenues and net income, reflecting 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.45
Neutral
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.52
Neutral
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.60
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 11.06M | 46.90M | 58.40M | 54.24M | 38.75M | 37.46M | Gross Profit |
| -3.93M | 17.91M | 58.40M | 36.40M | 20.54M | 26.64M | EBIT |
| -6.67M | 43.24M | 54.06M | 28.89M | 27.47M | 31.57M | EBITDA |
| -3.43M | 15.50M | 36.69M | 46.80M | 41.51M | 31.57M | Net Income Common Stockholders |
| -14.67M | -5.93M | 11.38M | -21.00M | 26.03M | 31.57M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 9.23M | 17.53M | 26.91M | 488.85M | 28.92M | 6.99M | Total Assets |
| 438.78M | 453.63M | 549.24M | 619.49M | 648.30M | 600.18M | Total Debt |
| 0.00 | 265.14M | 322.41M | 373.31M | 347.19M | 373.31M | Net Debt |
| -9.23M | -17.53M | -26.91M | 368.16M | 318.27M | 366.32M | Total Liabilities |
| 265.27M | 275.14M | 335.72M | 387.36M | 368.18M | 383.91M | Stockholders Equity |
| 173.51M | 178.49M | 213.52M | 232.12M | 280.12M | 216.26M |
| Cash Flow | Free Cash Flow | ||||
| 29.61M | 56.63M | 120.90M | -33.10M | 61.15M | 121.68M | Operating Cash Flow |
| 29.61M | 56.63M | 120.90M | -33.10M | 61.15M | 121.68M | Investing Cash Flow |
| 16.35M | 0.00 | 98.76M | -61.24M | 48.90M | 97.06B | Financing Cash Flow |
| -63.89M | -88.25M | -82.47M | -2.11M | -75.71M | -43.88M |
Portman Ridge Finance Technical Analysis
Negative
11.56
Price Trends
11.85
Negative
13.61
Negative
14.79
Negative
Market Momentum
-0.13
Positive
39.42
Neutral
21.72
Neutral
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 11.56 is below the 20-day moving average (MA) of 11.91, below the 50-day MA of 11.85, and below the 200-day MA of 14.79, indicating a bearish trend. The MACD of -0.13 indicates Positive momentum. The RSI at 39.42 is Neutral, neither overbought nor oversold. The STOCH value of 21.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PTMN.
Portman Ridge Finance Risk Analysis
Portman Ridge Finance disclosed 72 risk factors in its most recent earnings report. Portman Ridge Finance 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
Portman Ridge Finance Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $120.45M | 3.99 | 19.56% | 15.13% | -49.04% | ― | |
69 Neutral | $144.95M | 20.58 | 3.63% | 14.95% | 127.09% | 2519.30% | |
64 Neutral | $12.77B | 9.71 | 7.85% | 78.06% | 12.07% | -7.97% | |
59 Neutral | $296.52M | 7.79 | 10.68% | 16.64% | 22.53% | ― | |
51 Neutral | $162.73M | 584.62 | -0.32% | 18.42% | -338.17% | -97.99% | |
48 Neutral | $106.39M | 41.01 | -5.47% | 16.26% | -37.27% | -153.39% | |
48 Neutral | $127.57M | 26.77 | 3.56% | 13.39% | 32.38% | -90.38% |
* Financial Sector Average
Performance Comparison
PTMN
Portman Ridge Finance
11.56
-5.10
-30.61%
OXSQ
Oxford Square Capital
2.28
-0.33
-12.64%
OFS
OFS Capital
8.99
0.50
5.89%
TPVG
TriplePoint Venture Growth
7.21
-0.55
-7.09%
MRCC
Monroe Capital
6.69
-0.27
-3.88%
GECC
Great Elm Capital
11.05
1.79
19.33%
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.