Sound Point Meridian Capital, Inc. (SPMC)
NYSE:SPMC
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Sound Point Meridian Capital, Inc.
(NYSE:SPMC)
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Rating:53Neutral
Price Target:
$10.00
▲(2.88% Upside)
Action:ReiteratedDate:02/11/26
The score is held back primarily by weak cash conversion (large negative operating/free cash flow versus reported earnings) and a bearish technical setup with the stock below key moving averages. Earnings call takeaways add further pressure due to the distribution cut, significant NAV decline, and limited liquidity. High reported profitability and a debt-free profile are supportive, but valuation is mixed given the high P/E despite a very high (potentially risk-signaling) dividend yield.
Positive Factors
Balance-sheet strength (no debt)
A debt-free balance sheet with a large equity base gives the firm material solvency and financial flexibility over multiple quarters. This structure reduces refinancing risk, supports opportunistic CLO refinancings or deployments, and improves downside resilience during spread volatility.
Negative Factors
Very weak cash generation
Large negative operating and free cash flows despite strong reported net income indicate earnings are not converting into cash. This undermines dividend sustainability, limits the firm's ability to fund refinancings or opportunistic purchases with internal cash, and strains liquidity over coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance-sheet strength (no debt)
A debt-free balance sheet with a large equity base gives the firm material solvency and financial flexibility over multiple quarters. This structure reduces refinancing risk, supports opportunistic CLO refinancings or deployments, and improves downside resilience during spread volatility.
Read all positive factors
Sound Point Meridian Capital, Inc. (SPMC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
N/A
Dividend Yield22.11%
Average Volume (3M)46.08K
Price to Earnings (P/E)―
Beta (1Y)0.89
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)0.44
Shares Outstanding20,537,140
10 Day Avg. Volume60,214
30 Day Avg. Volume46,079
Financial Highlights & Ratios
PEG Ratio-0.06
Price to Book (P/B)1.38
Price to Sales (P/S)6.28
P/FCF Ratio-3.81
Enterprise Value/Market Cap10.00T>
Enterprise Value/Revenue2.76
Enterprise Value/Gross Profit5.79
Enterprise Value/Ebitda19.93
Forecast
1Y Price Target
$11.67Price Target Upside20.03% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)2.15
Revenue Forecast (FY)$71.90M
Sound Point Meridian Capital, Inc. Business Overview & Revenue Model
Company Description
Sound Point Meridian Capital, LLC operates as a closed-end management investment company in the United States. It focuses on investing primarily in equity and mezzanine tranches of collateralized loan obligations, which are collateralized by portf...
How the Company Makes Money
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Sound Point Meridian Capital, Inc. Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 28, 2026
Earnings Call Sentiment Negative
The call highlighted clear operational actions and strategic responses — active deployments, 10 refinancings completed, Jan yield uptick to ~11.4%, and a highly diversified portfolio — but was dominated by sizeable mark-to-market losses, a large NAV decline (-17.1% q/q), a GAAP net loss of $43.9M, a distribution cut (20%), and very limited cash liquidity. Management emphasized refinancing optionality and potential for improving equity arbitrage if liability spreads stabilize, but near-term technical weakness and spread compression materially pressured earnings and NAV.Positive Updates
Net Investment Income and Quarterly Distributions
Generated net investment income (NII) of $9.0M or $0.44 per share for the quarter and paid distributions of $0.75 per share during the quarter; company reaffirmed commitment to distribute required taxable income and set monthly distributions for calendar Q2 2026 at $0.20 per share.
Negative Updates
Distribution Reduction and Coverage Risk
Board reduced monthly distributions to $0.20 per share for calendar Q2 2026 from $0.25 previously (20% cut). Management acknowledged a shortfall in NII relative to common distributions during the quarter driven by loan spread compression, elevated CLO liability costs, and reduced excess credit, and stated distributions are not fully covered today but the board expects coverage may improve over time.
Read all updates
Q3-2026 Updates
Positive
Negative
Net Investment Income and Quarterly Distributions
Generated net investment income (NII) of $9.0M or $0.44 per share for the quarter and paid distributions of $0.75 per share during the quarter; company reaffirmed commitment to distribute required taxable income and set monthly distributions for calendar Q2 2026 at $0.20 per share.
Read all positive updates
Company Guidance
Management guided that, given persistent loan spread compression, elevated CLO liability costs and reduced excess credit, the board set calendar Q2 2026 monthly distributions at $0.20 (down from Q1’s $0.25) after paying $0.75 per share in Q3 and declaring $0.25/month in January and March; Q3 (ended Dec 31, 2025) results included net investment income of $9.0M ($0.44/share), a net realized loss of $0.05/share (~$1.1M) and an unrealized loss of $51.8M, total expenses of $9M and a GAAP net loss of $43.9M (−$2.14/share), with NAV falling to $14.02 from $16.91 (estimated NAV $13.40 as of Jan 31, 2026). The firm’s balance sheet showed total assets $474.7M, investment portfolio fair value $473.5M, net assets $287.9M, cash liquidity ≈$0.525M and debt at 39% of assets. CLO-equity portfolio metrics: weighted average gap yield 11% (vs 12% prior quarter; 11.4% in January), ~7 bps weighted average spread loss, and management expects meaningful refinancing optionality in 2026. Activity metrics: deployed ~$6.8M in two warehouses, bought three new-issue equities (amortized cost $11.29M, wtd avg cap yield 9.31%) and one secondary (cost $5.23M, yield 15.6%), sold two positions (cost $8.1M, avg yield 15.6%), refinanced 10 investments and deployed $4.48M for refinancings; portfolio comprises 97 CLOs across 30 managers covering ~1,500 issuers in 30+ industries.Sound Point Meridian Capital, Inc. Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
88
Very Positive
Cash Flow
18
Very Negative
| Breakdown | TTM | Mar 2025 | Dec 2023 |
|---|---|---|---|
Income Statement | |||
| Total Revenue | 100.88M | 64.51M | 64.51M |
| Gross Profit | 48.11M | 64.39M | 64.39M |
| EBITDA | 13.98M | 63.60M | 63.60M |
| Net Income | 119.59K | 63.60M | 63.60M |
Balance Sheet | |||
| Total Assets | 541.29M | 303.21M | 303.21K |
| Cash, Cash Equivalents and Short-Term Investments | 3.71M | 4.99M | 4.99K |
| Total Debt | 77.50M | 0.00 | 0.00 |
| Total Liabilities | 195.07M | 9.05M | 9.05K |
| Stockholders Equity | 346.22M | 294.17M | 294.17K |
Cash Flow | |||
| Free Cash Flow | -20.74B | -106.38M | -106.38M |
| Operating Cash Flow | -20.74B | -106.38M | -106.38M |
| Investing Cash Flow | -186.75M | 0.00 | 0.00 |
| Financing Cash Flow | 17.81B | 85.46M | 85.46M |
Sound Point Meridian Capital, Inc. Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
58 Neutral | $311.46M | 10.64 | 5.42% | 16.61% | 84.11% | 56.99% | |
55 Neutral | $284.55M | 13.30 | 0.03% | 12.83% | 16.48% | -46.87% | |
53 Neutral | ― | -11.74 | 0.03% | 22.11% | ― | ― | |
53 Neutral | $369.77M | -5.23 | -12.44% | 21.13% | -139.70% | -46.02% | |
49 Neutral | $77.24M | -2.74 | -24.20% | 22.43% | 7.98% | -817.71% |
* Financial Sector Average
SPMC
Sound Point Meridian Capital, Inc.
10.45
-5.30
-33.64%
PNNT
Pennantpark Investment
4.77
-0.70
-12.77%
SCM
Stellus Capital
9.83
-1.44
-12.75%
TCPC
BlackRock TCP Capital
4.39
-1.17
-21.10%
GECC
Great Elm Capital
5.56
-2.86
-33.94%
Sound Point Meridian Capital, Inc. Corporate Events
Financial Disclosures
Sound Point Meridian Announces Updated February 2026 NAV Estimate
Neutral
Mar 11, 2026
Sound Point Meridian Capital, Inc. reported an unaudited estimate that its net asset value per share of common stock as of February 28, 2026, ranged between $10.43 and $10.53. This estimated NAV range provides investors with an updated gauge of th...
DividendsFinancial Disclosures
Sound Point Meridian Declares Q1 2027 Monthly Distributions
Negative
Feb 11, 2026
On February 11, 2026, Sound Point Meridian Capital, Inc. declared monthly common stock distributions of $0.20 per share for April 30, May 29, and June 30, 2026, for its first fiscal quarter 2027. It also set monthly preferred distributions of $0.1...
Financial Disclosures
Sound Point Meridian Updates January 2026 NAV Estimate
Neutral
Feb 9, 2026
Sound Point Meridian Capital, Inc. reported management’s unaudited estimate of its net asset value per share as of January 31, 2026, indicating a range between $13.35 and $13.45. This updated valuation provides investors with a snapshot of t...
Financial Disclosures
Sound Point Meridian Capital Announces Preliminary Year-End NAV
Neutral
Jan 9, 2026
Sound Point Meridian Capital, Inc. reported that its management’s unaudited estimate of net asset value per share of common stock as of December 31, 2025, ranged between $13.97 and $14.07. For the quarter ended December 31, 2025, the company...
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.