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SLR Investment Corp. (SLRC)
NASDAQ:SLRC
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SLR Investment Corp.
(NASDAQ:SLRC)
Rating:71Outperform
Price Target:―
Positive Factors
Credit Quality
SLRC maintains strong credit quality with only one non-accrual investment, attributed to risk-averse credit management.
Dividends
Control company dividends grew approximately $2 million quarter-over-quarter, led by Kingsbridge and SLR Business Credit.
Investment Pipeline
SLRC has an attractive investment pipeline and is well-positioned to benefit from low leverage.
Negative Factors
Joint Venture
Lower assets, base rates, and spread compression in the Joint Venture will likely result in lower dividends.
Rating
The analyst maintains an Underweight rating on the stock.
SLR Equipment Finance
SLR Equipment Finance was written down by approximately $6 million, resulting in net losses in most quarters since 3Q22.
SLR Investment Corp. (SLRC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$895.79M
Dividend Yield9.99%
Average Volume (3M)196.04K
Price to Earnings (P/E)10.2
Beta (1Y)0.50
Revenue Growth14.33%
EPS Growth25.35%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength80
IndustryAsset Management
Share Statistics
EPS (TTM)0.41
Shares Outstanding54,554,634
10 Day Avg. Volume186,739
30 Day Avg. Volume196,041
Financial Highlights & Ratios
PEG Ratio-1.26
Price to Book (P/B)0.89
Price to Sales (P/S)0.00
P/FCF Ratio2.38
Enterprise Value/Market Cap1.62
Enterprise Value/Revenue2.01
Enterprise Value/Gross Profit15.00
Enterprise Value/Ebitda3.68
Forecast
1Y Price Target
$16.21Price Target Upside-1.28% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering7
SLR Investment Corp. Business Overview & Revenue Model
Company DescriptionSLR Investment Corp. (SLRC) is a business development company that primarily focuses on investing in U.S. middle-market companies. The firm targets a diverse range of sectors, including healthcare, technology, manufacturing, and energy. SLRC provides a variety of financial solutions such as senior secured loans, junior loans, and equity investments, aiming to support the growth and expansion of its portfolio companies.
How the Company Makes MoneySLR Investment Corp. makes money primarily through interest and fee income generated from its lending activities. By extending senior and junior secured loans to middle-market companies, SLRC earns interest payments that form a significant portion of its revenue. Additionally, the company may generate income through equity investments, where it takes ownership stakes in companies and benefits from capital appreciation and dividends. SLRC's earnings are also influenced by strategic partnerships with financial institutions, which may provide co-investment opportunities and enhance its investment capabilities. The company's performance is closely tied to the credit quality of its portfolio and the broader economic environment, as these factors impact the repayment capacity of its borrowers.
SLR Investment Corp. Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 8.89%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Positive
The earnings call reflects a solid start to 2025 for SLR Investment Corp., with strong portfolio performance and strategic shifts towards specialty finance providing downside protection. However, there were minor setbacks such as a slight decrease in net asset value and increased realized and unrealized losses. The overall sentiment is slightly positive due to the company's strong liquidity and diversified strategy.Q1-2025 Updates
Positive Updates
Solid Start to 2025
SLR Investment Corp. reported net investment income of $0.41 per share in Q1 2025, matching the base dividend, and a return on equity of approximately 9%.
Strong Portfolio Composition
Approximately 96.4% of the investment portfolio consists of first lien senior secured loans, with only one investment on non-accrual, representing just 0.6% of the portfolio on a cost basis.
Increase in New Originations
Originations were up approximately 38% year-over-year and 7% compared to a seasonally strong fourth quarter, with $361 million of new investments.
Diversified Investment Strategy
SLR's multi-strategy approach with a focus on specialty finance and asset-based lending strategies provides downside protection and attractive risk-adjusted returns.
Strong Liquidity Position
SLR Investment Corp. had over $800 million of available capital to deploy as of March 31, 2025.
Negative Updates
Slight Decrease in Net Asset Value
The net asset value per share decreased to $18.16 from $18.20 at the end of the previous quarter.
Net Realized and Unrealized Losses
The company reported net realized and unrealized losses totaling $2.2 million for the first quarter, up from $1.2 million in Q4 2024.
Impact of Competitive Market Conditions
The continuation of competitive market conditions in sponsor finance led to a compression in illiquidity premiums on new investments.
Company Guidance
During the Q1 2025 earnings call for SLR Investment Corp., several key financial metrics and strategic insights were shared. The company reported net investment income of $0.41 per share, matching its base dividend, and achieved a return on equity of approximately 9%. The net asset value (NAV) at the end of the quarter was $18.16 per share, a slight decrease from $18.20 at the previous year-end. The company's investment portfolio totaled $3.1 billion, with a notable 80% derived from social finance investments. Originations increased by 38% year-over-year, amounting to $361 million, while repayments totaled $391 million. The portfolio yield was reported at 12.2%, a 10 basis point increase from the prior quarter. The comprehensive portfolio was predominantly comprised of first lien senior secured loans, representing 96.4% of total investments, with only 0.6% of investments on non-accrual status. The company maintained a net debt-to-equity ratio of 1.04 times, with over $800 million in available capital for future deployments. Additionally, SLRC declared a Q2 2025 quarterly distribution of $0.41 per share, reflecting continued confidence in its multi-strategy approach amidst economic uncertainties.SLR Investment Corp. Financial Statement Overview
Summary
SLR Investment Corp. has shown substantial revenue growth and effective cost management, leading to improved EBIT margins. The balance sheet reflects strong equity and no debt, suggesting low financial risk. However, the volatility in cash flows over the years raises concerns about cash management consistency. The lack of reported net income in the latest period limits a full assessment of profitability.Income Statement
SLR Investment Corp. shows a strong revenue growth trajectory, with a significant increase from $28.32M in 2022 to $232.43M in 2024. The EBIT margin improved considerably from 26.43% in 2021 to 98.34% in 2024, indicating efficient cost management. However, the net income for 2024 is not reported, which limits a comprehensive profitability analysis.75
Positive
Balance Sheet
The company maintains a strong equity position, with a consistent stockholders' equity over the years, peaking at $992.93M in 2024. The equity ratio remained stable, reflecting financial stability. The debt-to-equity ratio was zero in 2024, showing no reliance on debt, but the absence of total debt might suggest underutilization of leverage.70
Positive
Cash Flow
SLR Investment Corp. demonstrated a positive shift in operating cash flow from -$76.88M in 2023 to $309.32M in 2024, indicating improved cash generation capabilities. Free cash flow also turned positive, supporting potential reinvestment and shareholder returns. However, the volatility in cash flows over the years suggests potential instability in cash management.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 166.13M | 176.45M | 201.33M | 28.32M | 69.53M | 23.60M |
| Gross Profit | 97.01M | 104.99M | 141.37M | 22.91M | 25.37M | -8.84M |
| EBITDA | 87.81M | 95.76M | 148.90M | 64.43M | 89.44M | 42.61M |
| Net Income | 87.81M | 95.76M | 76.39M | 65.96M | 59.57M | 15.45M |
Balance Sheet | ||||||
| Total Assets | 2.50B | 2.45B | 2.52B | 2.54B | 2.01B | 1.94B |
| Cash, Cash Equivalents and Short-Term Investments | 467.00M | 414.27M | 344.15M | 19.11M | 322.94M | 388.78M |
| Total Debt | 1.04B | 1.03B | 1.18B | 1.09B | 812.04M | 671.45M |
| Total Liabilities | 1.51B | 1.46B | 1.54B | 1.54B | 1.17B | 1.08B |
| Stockholders Equity | 990.49M | 992.93M | 986.64M | 999.73M | 842.28M | 852.02M |
Cash Flow | ||||||
| Free Cash Flow | 370.12M | 309.31M | -76.88M | 91.06M | -135.10M | -62.60M |
| Operating Cash Flow | 370.12M | 309.31M | -76.88M | 91.06M | -135.10M | -62.60M |
| Investing Cash Flow | 0.00 | 0.00 | -61.24M | -78.26M | -127.72M | -43.68M |
| Financing Cash Flow | -211.24M | -239.20M | -7.30M | 14.34M | 69.26M | 15.03M |
SLR Investment Corp. Technical Analysis
Positive
16.42
Price Trends
16.04
Positive
16.02
Positive
15.56
Positive
Market Momentum
0.06
Negative
58.63
Neutral
78.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SLRC, the sentiment is Positive. The current price of 16.42 is above the 20-day moving average (MA) of 16.20, above the 50-day MA of 16.04, and above the 200-day MA of 15.56, indicating a bullish trend. The MACD of 0.06 indicates Negative momentum. The RSI at 58.63 is Neutral, neither overbought nor oversold. The STOCH value of 78.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SLRC.
SLR Investment Corp. Risk Analysis
SLR Investment Corp. disclosed 60 risk factors in its most recent earnings report. SLR Investment Corp. 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
SLR Investment Corp. Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $931.62M | 6.58 | 17.56% | 14.16% | 46.14% | 34.91% | |
75 Outperform | $859.31M | 9.10 | 10.56% | 10.53% | 37.08% | -2.29% | |
71 Outperform | $895.79M | 10.20 | 8.86% | 9.99% | 14.33% | 25.35% | |
70 Outperform | $1.07B | 11.97 | 7.59% | 11.45% | 93.63% | 24.41% | |
67 Neutral | $1.03B | 10.89 | 6.92% | 11.28% | -11.85% | -3.73% | |
66 Neutral | $1.00B | 8.86 | 9.87% | 11.62% | 12.24% | -3.21% | |
64 Neutral | $6.51B | 11.13 | 7.19% | 5.05% | 23.75% | 4.96% |
* Financial Sector Average
Performance Comparison
SLRC
SLR Investment Corp.
16.42
1.72
11.70%
PFLT
Pennantpark $
10.74
0.12
1.13%
CGBD
TCG BDC
14.18
-2.17
-13.27%
BCSF
Bain Capital Specialty Finance
15.49
0.61
4.10%
TRIN
Trinity Capital
14.41
2.13
17.35%
NCDL
Nuveen Churchill Direct Lending Corp.
17.09
1.41
8.99%
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.