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SLR Investment Corp. (SLRC)
NASDAQ:SLRC
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SLR Investment Corp.
(NASDAQ:SLRC)
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Rating:58Neutral
Price Target:
$15.00
â–¼(-1.25% Downside)
Action:ReiteratedDate:02/25/26
The score is held back primarily by inconsistent/uncertain recent financial statement signals—especially volatile, frequently negative cash flow and the latest-period break in reported profitability—along with weak technical momentum. Offsetting these are attractive valuation metrics (low P/E and high dividend yield) and a generally constructive earnings call emphasizing strong portfolio credit quality, liquidity, and continued origination activity despite yield compression and competitive pressures.
Positive Factors
Origination Momentum
Sustained high origination volume and portfolio growth indicate a durable deal pipeline and distribution capacity. Over 2–6 months this supports recurring interest income, deployment optionality, and revenue resilience as the firm converts available capital into yielding assets.
High Credit Quality
A portfolio skewed to first‑lien, senior secured loans with no non‑accruals and minimal PIK provides structural downside protection. This collateralized bias supports loss mitigation, steadier cash yields, and a more stable base for distributions through credit cycles.
Liquidity & Funding Flexibility
Ample available capital, manageable leverage and staggered maturities give the company durable financial flexibility. Investment‑grade ratings and recent liability improvements expand access to markets and allow opportunistic deployment without immediate refinancing pressure.
Negative Factors
Volatile Cash Generation
Repeated swings in operating and free cash flow, including a large 2025 outflow, imply inconsistent internal cash generation. Over the medium term this raises questions about dividend coverage stability and increases reliance on external funding in tighter markets.
Yield Compression
A measurable decline in portfolio yields reduces net investment income and compresses economic spreads. If lower base rates or tighter pricing persist, returns on new originations and reinvested capital could be structurally lower, pressuring medium‑term profitability.
Competitive Pressure/Tight Spreads
Intense competition and tighter spreads in sponsor and cash‑flow lending force selectivity, shrinkable addressable markets, and potential margin erosion. Over several quarters this can limit high‑margin deployment and reduce portfolio yield expansion opportunities.
SLR Investment Corp. (SLRC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$799.23M
Dividend Yield10.8%
Average Volume (3M)273.48K
Price to Earnings (P/E)8.7
Beta (1Y)0.58
Revenue Growth-6.30%
EPS Growth-6.92%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)0.40
Shares Outstanding54,554,634
10 Day Avg. Volume316,274
30 Day Avg. Volume273,483
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue4.84
Enterprise Value/Gross Profit8.11
Enterprise Value/Ebitda9.00
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
SLR Investment Corp. Business Overview & Revenue Model
Company DescriptionSLR Investment Corp. is a business development company specializing in secured debt (first lien unitranche and second lien), subordinated (unsecured) debt, minority equity, leveraged buyouts, acquisitions, recapitalizations, general refinancing, growth capital and strategic income-oriented control equity investments in leveraged middle market companies. The fund invests in aerospace and defense; air freight & logistics; asset management; automotive; banking; beverage, food and tobacco; building products; buildings and real estate; broadcasting and entertainment; cargo transport; commercial services and supplies; communications equipment; chemicals, plastics and rubber; containers, packaging and glass; construction & engineering; diversified/conglomerate manufacturing; consumer Finance; distributors; diversified/conglomerate services; diversified financial services; diversified real estate activities; food products; Footwear; Education Services; diversified telecommunications services; electronics; farming and agriculture; finance; grocery; health care equipment and supplies; health care facilities; education and childcare; home and office furnishing, durable consumer products; hotels, motels, inns and gaming; insurance; restaurants, leisure, amusement, and entertainment; leisure equipment tolls and services, media, multiline retail, multi sector holdings; paper and forest products; personal products; professional services, research and consulting services, software; specialty retail; textiles apparel and luxury goods, thrifts and mortgage finance, trading companies and distributors, utilities, and wireless telecommunication services; industrial conglomerates; internet software and services, IT services, machinery; mining, steel, iron, and non-precious metals; oil and gas; personal, food and miscellaneous services; printing and publishing; retail stores; telecommunications; textiles and leather; and utilities. It also invests in life sciences with focus on specialty pharmaceuticals, medical devices, biotech, health Care Providers and services; health Care technology, enabling technologies and tools. The fund primarily invests in United States. The fund's investments generally range between $5 million and $100 million. The fund invests in companies with revenues between $50 million and $1 billion and EBITDA between $15 million and $100 million. It invests in the form of senior secured loans, mezzanine loans, and equity securities. It may also seek investments in thinly traded public companies and also make secondary investments. The fund makes non-control equity investments. It primarily exits within three years of the initial capital commitment.
How the Company Makes MoneySLR Investment Corp. generates revenue through interest income from its debt investments, which typically represent the largest portion of its earnings. The company invests in senior secured loans, subordinated debt, and equity in private companies, which yield interest payments and potential capital gains. Additionally, SLRC may earn fee income from transaction fees, management fees, and other service-related revenues associated with its investment activities. The company also benefits from strategic partnerships with financial institutions and other investment firms, allowing it to access a broader range of investment opportunities and enhance its overall portfolio performance.
SLR Investment Corp. Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The call emphasizes strong portfolio quality, disciplined underwriting, robust origination momentum (notably in ABL), solid liquidity, and attractive returns relative to peers. Key weaknesses include yield compression due to lower base rates, tight spreads in sponsor finance, and elevated repayments that created timing variability. Management presents confidence in their defensive positioning, available capital to act on opportunities, and ongoing pipeline activity.Q4-2025 Updates
Positive Updates
Steady Earnings and Returns
Q4 net investment income (NII) of $0.40 per share (flat QoQ) and net income of $0.46 per share; Q4 net income annualized return on average equity of 10.1%. Full-year 2025 net income of $1.70 per share representing a 9.3% return on average equity.
Portfolio Growth and Scale
Comprehensive portfolio of $3.3 billion at year-end with annual growth of 7.2% and average exposure per borrower of $3.8 million.
Strong Origination Momentum
Q4 originations of $462 million (second-highest on record), up 36% year-over-year and 3% quarter-over-quarter; full-year originations of $1.84 billion.
Shift to Asset-Based Specialty Finance
More than 83% of portfolio in senior secured specialty finance loans (highest percentage in 20-year history); ABL originations of $247 million in Q4 (almost double prior-year period) and $1.1 billion for the year (nearly double 2024).
High Credit Quality and Low Problem Loans
Approximately 95% of comprehensive portfolio in first lien senior secured loans; 100% of investments at cost performing with zero non-accruals; PIK income de minimis (~1–2% of total income depending on metric cited).
Attractive Yields Across Key Verticals
Weighted average portfolio yield of 11.6% (Q4); ABL asset-level weighted average yield 12.6%; life science first-lien weighted average yield 12.3%; equipment finance weighted average yield ~11%.
Strong Liquidity and Funding Profile
Over $850 million of available capital to deploy (including credit facility capacity and specialty finance capacity); approximately $1.2 billion of debt outstanding with net debt-to-equity of 1.14x (within target range); next unsecured note maturity in December 2026; investment-grade ratings from Fitch, Moody's and DBRS.
Successful Liability Management
Refinanced SSLP revolving facility reducing spread by 75 basis points (from SOFR+2.90% to SOFR+2.15%); improved borrowing flexibility, advance rates and extended maturities.
Shareholder-Friendly Actions and Alignment
Board declared Q1 2026 quarterly base distribution of $0.41 per share; management and SLR team own over 8% of the company and significant incentive compensation is invested in SLR stock; dividend yield ~11.2% at recent market close.
Diversification and Defensive Positioning
Very low direct exposure to software (~2% of portfolio) and concentrated emphasis on asset-backed strategies (ABL, equipment finance, life sciences) designed for downside protection and active collateral monitoring.
Negative Updates
Yield Compression and Rate Sensitivity
Weighted average portfolio yield declined to 11.6% from 12.2% in Q3 2025 and from 12.1% at year-end 2024 (down ~0.6 and ~0.5 percentage points respectively), driven in part by lower base rates and late-quarter timing effects.
Tight Spreads and Competitive Pressure in Sponsor Finance
Management cited an oversupply of capital and fierce competition in sponsor/cash-flow lending markets leading to tight spreads; the company has intentionally passed on refinancing opportunities, causing cash flow loans to shrink to ~14.5% of the comprehensive portfolio (at lower bounds of historical mix).
Portfolio Contraction in Some Verticals
Life science portfolio has contracted (team noted allowing life science exposure to shrink across platform), with 2025 repayments (~$400M+) outpacing new life science ABL originations ($60M) despite ~$500M in late-stage term loan commitments, indicating net shrinkage and high repayment activity.
Pressure on Cash-Flow Yields
Weighted average yield on cash flow portfolio declined to just under 10% in Q4 from just over 10% in the prior quarter; company sees intense competition for quality cash-flow assets.
Repayment/Deployment Timing Uncertainty
Elevated repayments (Q4 repayments ~$445M) caused late-quarter timing effects and modest net funding ($70M), creating some uncertainty around ability to deploy capital immediately and variability in reported yields.
Industry-Wide Risk and Market Maturation
Management highlighted a broader private credit industry maturation risk (potential for wider dispersion in manager performance and recalibrated expectations for defaults/returns) which could pressure forward returns despite the firm's defensive positioning.
Company Guidance
Management's guidance was to remain disciplined yet opportunistic in 2026: the Board declared a Q1 2026 base distribution of $0.41 per share (payable 03/27/2026, record 03/13/2026), and the company has >$850M of available capital (including SSLP capacity) with roughly $55M undrawn at SSLP; debt outstanding is ~$1.2B with net debt-to-equity of 1.14x, no near-term unsecured note maturities until December 2026, and room to increase leverage toward the high end of its target (1.25x) if attractive opportunities arise. They expect to deploy into specialty finance where origination momentum persists (Q4 originations $462M, FY originations $1.84B, net funding in Q4 $70M, comprehensive portfolio $3.3B, annual growth 7.2%), with continued emphasis on ABL (Q4 ABL originations ~$247M, FY ABL ~$1.1B; ABL all‑in ~SOFR+600, ABL yield 12.6%), equipment finance (~$1.1B, yield ~11%), life sciences (first‑lien commitments ~$500M in 2025; portfolio ~$180M, yield 12.3%), and selective cash‑flow lending (~$475M, ~15% of portfolio, yield just under 10%, borrower EBITDA ~$100M, LTV ~40%, interest coverage 2.3x). Key credit and capital metrics underpinning the guidance: NAV $18.26/share, Q4 NII $0.40/share, Q4 net income $0.46/share (10.1% annualized ROE), FY net income $1.70/share (9.3% ROE), weighted average portfolio yield 11.6% (down from 12.2% Q3), ~95% first‑lien and ~98% senior secured by fair value, 100% performing, ~2% software exposure, and PIK income de minimis (~1–2%); management reiterated low sensitivity to base‑rate declines and a plan to prudently access unsecured debt markets.SLR Investment Corp. Financial Statement Overview
Summary
Strong revenue momentum and historically high profitability through 2024 are positives, but results are clouded by a sharp break in 2025 reported earnings (profits shown as zero) and volatile, frequently negative operating/free cash flow including a sizable 2025 outflow. Balance sheet leverage appears manageable, but latest-period metrics look potentially distorted, reducing confidence in current run-rate performance.Income Statement
Revenue growth has improved meaningfully in recent years (2023: ~114%, 2024: ~11%, 2025: ~31%), showing solid top-line momentum. Profitability looked very strong in 2021–2024 with high net margins (roughly ~25% to ~60%), but the latest annual period (2025) shows net income and operating profit recorded as zero, which creates a sharp break in earnings visibility and reduces confidence in current-period performance.58
Neutral
Balance Sheet
The company carries meaningful leverage, with debt-to-equity around ~1.0–1.2 in 2022–2024, which is manageable but leaves less flexibility in a downturn. Equity has been relatively stable around ~$0.99B, and assets have remained in a steady range (~$2.45B in 2024 to ~$2.57B in 2025). Return on equity improved into 2024 (~9.6%) but is shown as 0% in 2025 alongside zero debt, suggesting the latest-period balance sheet metrics may be distorted or incomplete.62
Positive
Cash Flow
Cash generation has been volatile and frequently negative, with operating and free cash flow negative in 2020, 2021, 2023, and 2025, including a sizable outflow in 2025 (~-$72M). While 2022 and 2024 showed strong positive operating/free cash flow (2024: ~$156M) and strong growth in 2024, the repeated swings raise questions about consistency of cash earnings and funding needs during weaker periods.36
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 167.35M | 218.54M | 176.45M | 159.05M | 74.40M | 99.41M |
| Gross Profit | 99.90M | 0.00 | 104.99M | 86.54M | 28.32M | 69.53M |
| EBITDA | 90.07M | 3.14M | 95.76M | 76.39M | 18.34M | 59.57M |
| Net Income | 90.07M | 0.00 | 95.76M | 76.39M | 18.34M | 59.57M |
Balance Sheet | ||||||
| Total Assets | 2.53B | 2.57B | 2.45B | 2.52B | 2.54B | 2.01B |
| Cash, Cash Equivalents and Short-Term Investments | 394.45M | 15.72M | 414.27M | 344.15M | 428.33M | 322.94M |
| Total Debt | 1.14B | 0.00 | 1.03B | 1.18B | 1.09B | 812.04M |
| Total Liabilities | 1.54B | 1.58B | 1.46B | 1.54B | 1.54B | 1.17B |
| Stockholders Equity | 993.29M | 995.99M | 992.93M | 986.64M | 999.73M | 842.28M |
Cash Flow | ||||||
| Free Cash Flow | 197.46M | -72.02M | 156.13M | -3.71M | 91.06M | -135.10M |
| Operating Cash Flow | 197.46M | -72.02M | 156.13M | -3.71M | 91.06M | -135.10M |
| Investing Cash Flow | -93.09M | -99.32M | 153.18M | -73.18M | -78.26M | -127.72M |
| Financing Cash Flow | -55.55M | 22.05M | -239.20M | -7.30M | 14.34M | 69.26M |
SLR Investment Corp. Technical Analysis
Negative
15.19
Price Trends
15.21
Negative
15.00
Negative
15.23
Negative
Market Momentum
-0.13
Positive
39.97
Neutral
24.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SLRC, the sentiment is Negative. The current price of 15.19 is above the 20-day moving average (MA) of 14.96, below the 50-day MA of 15.21, and below the 200-day MA of 15.23, indicating a bearish trend. The MACD of -0.13 indicates Positive momentum. The RSI at 39.97 is Neutral, neither overbought nor oversold. The STOCH value of 24.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SLRC.
SLR Investment Corp. Risk Analysis
SLR Investment Corp. disclosed 3 risk factors in its most recent earnings report. SLR Investment Corp. reported the most risks in the "Legal & Regulatory" 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $666.62M | 7.75 | 11.92% | 11.47% | -12.17% | -14.93% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
62 Neutral | $852.37M | 8.92 | 8.18% | 13.18% | -26.08% | -27.65% | |
61 Neutral | $841.75M | 12.40 | 5.43% | 14.17% | 36.15% | -38.59% | |
60 Neutral | $818.55M | 23.47 | 3.44% | 13.64% | 36.91% | -48.79% | |
60 Neutral | $834.74M | 9.65 | 7.03% | 13.63% | -8.23% | -35.72% | |
58 Neutral | $799.23M | 8.73 | 9.07% | 10.80% | -6.30% | -6.92% |
* Financial Sector Average
SLRC
SLR Investment Corp.
15.14
-0.42
-2.70%
FDUS
Fidus Investment
18.53
-1.93
-9.43%
NMFC
New Mountain Finance
7.83
-2.52
-24.35%
PFLT
Pennantpark
8.44
-1.42
-14.36%
CGBD
Carlyle Secured Lending Inc
11.37
-5.00
-30.54%
BCSF
Bain Capital Specialty Finance
13.27
-3.27
-19.77%
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.