Sound Point Meridian Capital, Inc. (SPMC) AI Stock Analysis

• Market Cap: N/A
• Dividend Yield: 22.11%
• Average Volume (3M): 29.72K
• Price to Earnings (P/E): 54.1
• Beta (1Y): 0.93
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: N/A
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 0.44
• Shares Outstanding: 20,537,140
• 10 Day Avg. Volume: 47,140
• 30 Day Avg. Volume: 29,720
• 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 Cap: 10.00T>
• Enterprise Value/Revenue: 2.77
• Enterprise Value/Gross Profit: 5.81
• Enterprise Value/Ebitda: 20.02
• 1Y Price Target: $13.00
• Price Target Upside: 27.70% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 53 Neutral
• Price Target: $13.50 ▲(32.61% Upside)
• Action: Reiterated Date: 02/11/26
• Date: Action: Reiterated 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

Debt-free balance sheet

A debt-free balance sheet and a large equity base provide structural solvency and financial flexibility through credit cycles. This reduces refinancing risk, supports ability to absorb mark-to-market losses, and gives management optionality to pursue refinancings or opportunistic deployments over the next several quarters.

Very high reported profitability

Exceptionally high reported operating and net margins indicate the firm can generate substantial accounting profits from its business model. If repeatable, such margins support retained capital generation and distribution capacity, underpinning medium-term earnings power assuming cash conversion and mark adjustments normalize.

Diversified CLO equity portfolio & active refinancings

Broad manager and issuer diversification reduces single-manager and obligor concentration risk, improving resilience to idiosyncratic credit events. Active refinancings and recent deployments show management can tactically capture arbitrage and liability savings when markets permit, supporting medium-term recovery of equity returns.

Negative Factors

Weak cash generation

Material negative operating and free cash flow versus reported net income signals earnings do not convert to cash, raising questions about sustainability of distributions and the quality of reported profits. Over months this can force asset sales, heighten liquidity strain, and limit strategic flexibility.

Large NAV volatility and mark-to-market losses

Significant quarter-to-quarter NAV declines and large unrealized losses highlight structural sensitivity of reported equity to market liquidity and spread moves. Persistent mark-to-market volatility can erode investor capital, pressure distributions, and require longer recovery windows even if underlying credit remains stable.

Distribution coverage risk and limited liquidity

A distribution cut and explicit lack of coverage reveal a structural mismatch between cash earned and payouts. Coupled with very limited stated cash on hand, this raises sustainable payout risk and means near-term distributions depend on portfolio monetizations or improved liability spreads, constraining durable shareholder return predictability.

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 portfolios consisting primarily of below-investment grade U.S. senior secured loans. The company was founded in 2022 and is based in New York, New York.

How the Company Makes Money

Sound Point Meridian Capital, Inc. Financial Statement Overview

Summary

Income statement and balance sheet scores are strong (very high reported margins and no debt), but the cash flow profile is a major concern: operating/free cash flow are deeply negative despite strong net income, undermining earnings quality and sustainability. Some period-to-period balance sheet inconsistencies further reduce confidence in the reported strength.

Income Statement

Profitability is exceptionally strong, with near break-even cost structure and very high operating and net margins (both ~99%) in the latest annual period. Revenue growth is also extremely high in 2025-03-31 (annual) versus the prior period, indicating a sharp step-up in top-line scale. The main weakness is that the results look unusually “perfect” for an asset manager (margins and earnings essentially tracking revenue), which can signal one-time items, classification effects, or a business mix that may be less repeatable.

Balance Sheet

The balance sheet shows no debt and a large equity base relative to assets, which is a strong solvency profile and provides flexibility through cycles. Return on equity is solid in the latest annual period (~22%), supporting the quality of earnings. A key concern is data consistency: the 2023-12-31 equity and assets values appear dramatically smaller than 2025-03-31, and the implied return on equity for 2023 is extraordinarily high, which makes year-to-year comparability less reliable based on the provided figures.

Cash Flow

Cash generation is the clear weakness: operating cash flow and free cash flow are deeply negative (about -$106M) in both periods despite very strong reported net income. This suggests earnings are not converting into cash in the periods shown, raising questions about working-capital movements, timing, or other cash uses that are overwhelming operating profitability. While free cash flow growth is shown as strongly positive in 2025-03-31 (annual), it is still negative in absolute terms, so the underlying cash profile remains pressured.

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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SCM	60 Neutral	$325.95M	10.34	8.20%	12.83%	90.34%	-44.25%
PNNT	59 Neutral	$336.27M	13.14	5.38%	16.61%	-3.09%	200.66%
MRCC	55 Neutral	$135.85M	-31.90	-2.25%	14.03%	-34.92%	-132.22%
SPMC	53 Neutral	―	54.06	1.05%	22.11%	―	―
TCPC	50 Neutral	$406.39M	-44.24	-1.15%	21.13%	-91.81%	78.46%
GECC	45 Neutral	$95.05M	-11.94	-5.98%	22.43%	47.01%	-179.46%

Sound Point Meridian Capital, Inc. Corporate Events

Sound Point Meridian Declares Q1 2027 Monthly Distributions

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 $0.16667 for its 8.00% Series A Term Preferred Stock due 2029 and $0.1640625 for its 7.875% Series B Term Preferred Stock due 2030, all on matching April, May, and June record and payment dates.

For the third fiscal quarter ended December 31, 2025, the company reported net asset value of $14.02 per common share and net investment income of $9.0 million, or $0.44 per share. However, sizable unrealized investment losses of $51.8 million and realized losses of $1.1 million resulted in a GAAP net loss of $43.9 million, or $2.14 per share, and management’s unaudited NAV estimate fell further to $13.40 as of January 31, 2026.

Despite these losses, Sound Point Meridian highlighted portfolio cash distributions of $29.6 million from its CLO equity investments and maintained diversified exposure across about 1,596 underlying loans. The continued declaration of steady common and preferred distributions signals management’s confidence in the portfolio’s income-generating capacity, even as unrealized marks pressure book value and may concern income-focused and preferred shareholders.

The most recent analyst rating on (SPMC) stock is a Hold with a $15.50 price target. To see the full list of analyst forecasts on Sound Point Meridian Capital, Inc. stock, see the SPMC Stock Forecast page.

Sound Point Meridian Updates January 2026 NAV Estimate

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 the company’s estimated underlying asset value at that date, helping stakeholders assess performance and inform portfolio decisions.

The disclosed range underscores the company’s current assessment of its financial standing, although the figures remain subject to change once audited results are available. For market participants, the estimate serves as a key reference point for evaluating the pricing and relative attractiveness of the company’s shares within the broader investment landscape.

The most recent analyst rating on (SPMC) stock is a Hold with a $15.50 price target. To see the full list of analyst forecasts on Sound Point Meridian Capital, Inc. stock, see the SPMC Stock Forecast page.

Sound Point Meridian Capital Announces Preliminary Year-End NAV

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 estimated unaudited net investment income between $0.40 and $0.48 per share and an unaudited realized loss between $0.01 and $0.09 per share, offering investors an early view of its fourth-quarter and year-end financial position.

The most recent analyst rating on (SPMC) stock is a Hold with a $14.00 price target. To see the full list of analyst forecasts on Sound Point Meridian Capital, Inc. stock, see the SPMC Stock Forecast page.

Sound Point Meridian Capital Updates NAV Estimate

On November 30, 2025, Sound Point Meridian Capital, Inc. estimated the net asset value per share of its common stock to be between $14.66 and $14.76. This estimation provides stakeholders with a financial benchmark, reflecting the company’s current valuation and potentially influencing investor decisions.

The most recent analyst rating on (SPMC) stock is a Buy with a $18.00 price target. To see the full list of analyst forecasts on Sound Point Meridian Capital, Inc. stock, see the SPMC Stock Forecast page.

Sound Point Meridian Reports Q2 2025 Financial Results

On November 13, 2025, Sound Point Meridian Capital, Inc. announced its financial results for the second fiscal quarter ending September 30, 2025. The company reported a net asset value per share of $16.91 and a net investment income of $11.0 million. However, it faced a GAAP net loss of $17.2 million due to realized and unrealized losses on investments. The company also declared monthly distributions for its common and preferred stock to be paid in early 2026. These results reflect the company’s ongoing challenges in managing its investment portfolio, particularly in the CLO market, impacting its financial performance and stakeholder returns.

The most recent analyst rating on (SPMC) stock is a Buy with a $20.00 price target. To see the full list of analyst forecasts on Sound Point Meridian Capital, Inc. stock, see the SPMC Stock Forecast page.

Sound Point Meridian Releases October NAV Estimate

Sound Point Meridian Capital, Inc. announced an unaudited estimate of their net asset value per share for October 31, 2025, ranging between $16.12 and $16.22. This estimation provides stakeholders with an insight into the company’s financial standing as of that date, potentially impacting investor confidence and market perception.

The most recent analyst rating on (SPMC) stock is a Buy with a $20.00 price target. To see the full list of analyst forecasts on Sound Point Meridian Capital, Inc. stock, see the SPMC Stock Forecast page.