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Sound Point Meridian Capital, Inc.
(NYSE:SPMC)
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Rating:53Neutral
Price Target:
$10.00
â–²(2.88% Upside)
Action:Reiterated
Date: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
$204.76M
Dividend Yield22.11%
Average Volume (3M)32.68K
Price to Earnings (P/E)―
Beta (1Y)0.88
Revenue Growth15.28%
EPS Growth-805.67%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)-6.30
Shares Outstanding20,537,140
10 Day Avg. Volume47,579
30 Day Avg. Volume32,682
Financial Highlights & Ratios
PEG Ratio-0.23
Price to Book (P/B)1.38
Price to Sales (P/S)6.28
P/FCF Ratio-3.81
Enterprise Value/Market Cap1.27
Enterprise Value/Revenue3.02
Enterprise Value/Gross Profit3.85
Enterprise Value/Ebitda-2.64
Forecast
1Y Price Target
$11.00Price Target Upside13.17% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)1.44
Revenue Forecast (FY)$61.85M
Sound Point Meridian Capital, Inc. Business Overview & Revenue Model
Company Description
Sound Point Meridian Capital, LLC functions as a closed-end investment firm based in the United States. The company's primary investment strategy involves allocating capital to the equity and mezzanine layers of collateralized loan obligations (CL...
How the Company Makes Money
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Sound Point Meridian Capital, Inc. Earnings Call Summary
Earnings Call Date:May 27, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Aug 18, 2026
Earnings Call Sentiment Negative
The call highlighted active, constructive portfolio management actions (re-underwrites, secondary purchases with attractive yields, refinancings that saved 34 bps, and a post-quarter NAV rebound of ~9.8%) and a well-diversified CLO equity portfolio across many managers and loans. However, these positives were overshadowed by material mark-to-market losses: a ~31.3% QoQ NAV decline to $9.63, an unrealized loss of $77.6M, a GAAP net loss of $74.7M, NII that does not cover distributions, compressed WA GAAP yields (11.0% to 9.1%), and constrained liquidity. Market-wide credit weakness (issuance down ~32%, B-spread widening ~100 bps, LSTA index -55 bps YTD) further pressured valuations. While management’s repositioning and early April/May recovery are constructive, the magnitude of the quarter’s losses and coverage shortfall indicate the challenges outweigh the positives in this period.Positive Updates
Net Investment Income and Per-Share Earnings
Generated net investment income (NII) of $7.0 million, or $0.34 per share for the quarter ended 03/31/2026.
Negative Updates
Large NAV Decline During Quarter
Net asset value (NAV) per share fell to $9.63 at 03/31/2026 from $14.02 at 12/31/2025, a decline of approximately 31.3% quarter-over-quarter, driven by weaker valuations of CLO equity and underlying leveraged loans and lower projected CLO equity cash flows.
Read all updates
Q4-2026 Updates
Positive
Negative
Net Investment Income and Per-Share Earnings
Generated net investment income (NII) of $7.0 million, or $0.34 per share for the quarter ended 03/31/2026.
Read all positive updates
Company Guidance
Management reiterated calendar‑2026 monthly distributions of $0.20 per share (unchanged from the prior guidance) and said it will continue to evaluate distribution levels and reassess its distribution strategy over the coming months as earnings, market conditions and portfolio positioning evolve; they also signaled they will pursue refinancing optionality as liability costs have tightened (liability cost widened to ~$1.68 at 3/31 from ~$1.55 in Dec and have since reverted toward ~$1.55, with two refinancings this quarter saving ~34 bps). Key metrics cited in support of that guidance: Q4 net investment income was $7.0M ($0.34/sh), GAAP net loss was $74.7M (‑$3.63/sh) driven by $4.1M realized and $77.6M unrealized losses, NAV was $9.63 at 3/31 (down from $14.02 at 12/31/25) and estimated $10.57 at 4/30, total assets $375M, net assets $199M, investment fair value $368M, cash ~$5.8M, leverage 46.8% of assets, CLO equity Wtd. avg. GAAP 9.1% (vs 11% prior), portfolio spans 98 CLOs / 29 managers / >1.5k loans across >30 industries, recent activity included $4.5M new‑issue (10.65% GAAP), $7.4M secondary buys (31.37% avg yield), $8.4M sales (7% avg yield) and $14.9M in redemptions; outlook remains contingent on loan market stabilization (Q1 US institutional loan issuance ~$241B, ~‑32% YoY; CLO issuance cited at ~$47M; B‑rated spreads widened ~100 bps; LSTA YTD return ‑55 bps).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 | 86.00M | 64.51M | 64.51M |
| Gross Profit | 67.46M | 64.39M | 64.39M |
| EBITDA | -98.27M | 63.60M | 63.60M |
| Net Income | -130.01M | 63.60M | 63.60M |
Balance Sheet | |||
| Total Assets | 374.53M | 303.21M | 303.21K |
| Cash, Cash Equivalents and Short-Term Investments | 5.81M | 4.99M | 4.99K |
| Total Debt | 60.00M | 0.00 | 0.00 |
| Total Liabilities | 175.83M | 9.05M | 9.05K |
| Stockholders Equity | 198.70M | 294.17M | 294.17K |
Cash Flow | |||
| Free Cash Flow | -20.75B | -106.38M | -106.38M |
| Operating Cash Flow | -20.75B | -106.38M | -106.38M |
| Investing Cash Flow | -78.69M | 0.00 | 0.00 |
| Financing Cash Flow | 17.71B | 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% | |
57 Neutral | $73.77M | -2.00 | -26.36% | 22.43% | 2.83% | -679.99% | |
56 Neutral | $244.31M | 10.20 | 6.38% | 12.83% | 6.21% | -42.00% | |
54 Neutral | $281.91M | -2.27 | -19.08% | 21.13% | -153.69% | -168.78% | |
53 Neutral | $204.76M | -1.18 | -37.26% | 22.11% | 15.28% | -805.67% | |
49 Neutral | $225.27M | 16.47 | 0.01% | 16.61% | 122.81% | 43.00% |
* Financial Sector Average
SPMC
Sound Point Meridian Capital, Inc.
9.97
-4.48
-30.99%
PNNT
Pennantpark Investment
3.45
-2.41
-41.10%
SCM
Stellus Capital
8.44
-4.22
-33.34%
TCPC
BlackRock TCP Capital
3.36
-3.16
-48.50%
GECC
Great Elm Capital
5.31
-3.81
-41.79%
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.