BlackRock TCP Capital (TCPC) AI Stock Analysis

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BlackRock TCP Capital

(NASDAQ:TCPC)

Rating:58Neutral

Price Target:―

BlackRock TCP Capital's overall stock score of 58 reflects a mixed outlook. The company's solid financial performance and robust cash flow are positive factors, while technical analysis indicates bearish momentum. The valuation is challenging with a negative P/E ratio, though the high dividend yield is attractive. Earnings call insights reveal operational challenges, offset by management's shareholder-friendly actions.

Positive Factors

Portfolio Gains

Major portfolio marks included a $4.2 million gain on Securus and a $3.6 million gain on Domo.

Price Target

Analyst's price target improves to $8 from $7.50, representing a 0.80x NAV valuation.

Negative Factors

Analyst Recommendation

Analysts' recommendation remains Underweight due to prolonged credit patch and challenges posed by spreads and funding costs.

Dividend Challenges

The reset dividend still demands a 10.8% return on NAV, which may be challenged by spreads and funding costs.

Earnings Pressure

Given the forward curve, leverage, and credit challenges, TCPC is expected to underearn its base dividend.

BlackRock TCP Capital (TCPC) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$642.04M

Dividend Yield16.82%

Average Volume (3M)634.90K

Price to Earnings (P/E)―

Beta (1Y)0.60

Revenue Growth8.24%

EPS Growth-207.60%

CountryUS

Employees19,800

SectorFinancial

Sector Strength82

IndustryAsset Management

Share Statistics

EPS (TTM)0.38

Shares Outstanding85,037,796

10 Day Avg. Volume658,128

30 Day Avg. Volume634,899

Financial Highlights & Ratios

PEG Ratio-0.43

Price to Book (P/B)0.84

Price to Sales (P/S)0.00

P/FCF Ratio2.60

Enterprise Value/Market Cap0.87

Enterprise Value/Revenue2.28

Enterprise Value/Gross Profit-16.72

Enterprise Value/Ebitda-3.11

Forecast

1Y Price Target

$7.00

Price Target Upside-8.97% Downside

Rating ConsensusModerate Sell

Number of Analyst Covering2

BlackRock TCP Capital Business Overview & Revenue Model

Company DescriptionBlackRock TCP Capital Corp. (TCPC) is a specialty finance company that primarily invests in senior secured loans to middle-market companies. It operates as a business development company (BDC) and is managed by Tennenbaum Capital Partners, LLC, a subsidiary of BlackRock, Inc. The company focuses on providing a stable and attractive yield to its investors through a diversified portfolio of debt instruments, with an emphasis on maintaining a high level of credit quality.

How the Company Makes MoneyBlackRock TCP Capital makes money by earning interest income on the loans it provides to middle-market companies. As a business development company, it raises capital from investors and deploys it into debt investments, primarily senior secured loans. The company generates revenue from the interest payments made by its borrowers, and it also seeks capital appreciation from the equity investments it occasionally makes. TCPC's earnings are driven by the spread between the interest income it receives and the cost of funds, as well as by the fees it earns for managing its portfolio. In addition, the company benefits from its affiliation with BlackRock, which provides access to extensive resources and expertise in asset management.

BlackRock TCP Capital Financial Statement Overview

Summary

BlackRock TCP Capital exhibits strong financial growth with solid revenue and profit margins, backed by a robust cash flow position. The transition to a debt-free balance sheet enhances financial stability, though historical leverage issues suggest caution. The company's financial health is improving, supported by effective cash management and revenue growth.

Income Statement

Positive

The income statement shows a robust revenue growth rate of 23.96% from 2023 to 2024, indicating strong top-line expansion. The gross and net profit margins are healthy, reflecting effective cost management. However, the decline in EBIT margin from previous years suggests potential operational challenges.

Balance Sheet

Positive

The balance sheet reveals strong equity growth, with a debt-free position in 2024 significantly improving financial stability. The equity ratio has improved, indicating a solid asset base. However, the previous years' high debt-to-equity ratio highlights historical leverage concerns.

Cash Flow

Positive

The cash flow statement indicates impressive free cash flow growth, alongside a strong operating cash flow to net income ratio, emphasizing efficient cash generation. The high free cash flow to net income ratio further supports the company's financial health.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
39.04M	20.76M	209.33M	181.00M	165.11M	172.10M
	Gross Profit
-33.49M	-45.40M	209.33M	181.00M	165.11M	172.10M
	EBIT
-46.78M	-62.61M	154.61M	127.80M	113.53M	124.46M
	EBITDA
-46.78M	-62.61M	0.00	0.00	0.00	0.00
	Net Income Common Stockholders
-47.30M	-63.14M	38.47M	-9.23M	133.79M	71.37M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
99.11M	91.59M	112.24M	82.44M	19.55M	20.01M
	Total Assets
1.90B	1.92B	1.70B	1.72B	1.89B	1.67B
	Total Debt
1.10B	1.12B	985.20M	944.01M	1.01B	850.02M
	Net Debt
999.79M	1.03B	872.96M	861.57M	992.91M	830.01M
	Total Liabilities
1.12B	1.14B	1.01B	972.60M	1.06B	907.00M
	Stockholders Equity
781.32M	785.12M	687.60M	746.75M	829.46M	764.99M
Cash Flow		Free Cash Flow
312.21M	293.12M	92.45M	203.95M	-82.61M	122.33M
	Operating Cash Flow
312.21M	293.12M	92.45M	203.95M	-82.61M	122.33M
	Investing Cash Flow
26.23M	0.00	0.00	151.05M	31.88M	31.88M
	Financing Cash Flow
-333.67M	-313.77M	-62.65M	-141.07M	82.15M	-147.17M

BlackRock TCP Capital Technical Analysis

Technical Analysis Sentiment

Positive

Last Price7.69

Price Trends

50DMA

7.30

Positive

100DMA

7.92

Negative

200DMA

7.94

Negative

Market Momentum

MACD

0.16

Negative

RSI

61.03

Neutral

STOCH

65.42

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TCPC, the sentiment is Positive. The current price of 7.69 is above the 20-day moving average (MA) of 7.26, above the 50-day MA of 7.30, and below the 200-day MA of 7.94, indicating a neutral trend. The MACD of 0.16 indicates Negative momentum. The RSI at 61.03 is Neutral, neither overbought nor oversold. The STOCH value of 65.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TCPC.

BlackRock TCP Capital Risk Analysis

BlackRock TCP Capital disclosed 66 risk factors in its most recent earnings report. BlackRock TCP Capital 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 1 New Risks

We are subject to risks related to inflation. Q2, 2022

BlackRock TCP Capital Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GAIN	71 Outperform	$540.77M	8.26	13.17%	6.57%	-8.68%	-3.76%
GLAD	70 Neutral	$583.48M	6.68	18.92%	7.56%	69.53%	60.29%
Sector *	64 Neutral	$12.64B	9.78	7.67%	17015.08%	12.23%	-6.02%
FDUS	61 Neutral	$704.79M	8.62	12.10%	8.59%	2.31%	-15.06%
CCAP	61 Neutral	$570.38M	11.51	6.70%	10.96%	12.83%	-13.29%
TCPC	58 Neutral	$642.04M	―	-5.45%	16.82%	8.24%	-207.60%
CION	58 Neutral	$504.75M	15.47	-1.88%	15.09%	2.30%	-63.97%

* Financial Sector Average

Performance Comparison

TCPC

BlackRock TCP Capital

7.69

-1.64

-17.58%

FDUS

Fidus Investment

20.13

2.34

13.15%

GLAD

Gladstone Capital

26.13

5.85

28.85%

GAIN

Gladstone Investment

14.68

2.35

19.06%

CCAP

Crescent Capital BDC

15.39

-0.82

-5.06%

CION

CION Investment Corp

9.58

-1.30

-11.95%

BlackRock TCP Capital Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 16.34%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Neutral

The earnings call reflected both progress and ongoing challenges. Highlights included portfolio stabilization and strong liquidity, while lowlights focused on significant realized losses and persistent issues with aggregators. The sentiment is balanced with both positive and negative elements.

Q1-2025 Updates

Positive Updates

Portfolio Stabilization

The number of portfolio companies on nonaccrual status declined significantly to eight from 12 in the prior quarter, reducing the nonaccrual percentage at fair value to 4.4%, down from 5.6%.

Dividend Announcement

Declared a second quarter dividend of $0.25 and a special dividend of $0.04 per share, indicating a return of value to shareholders.

Growth in Job and Talent Investment

Provided growth capital to Job and Talent, which is delivering year-over-year revenue growth and higher profitability, resulting in a meaningful markup this quarter.

Strong Liquidity Position

Total liquidity increased to $629 million, with $530 million of available leverage and $99 million of cash.

Net Leverage in Target Range

Net leverage at the end of the quarter was 1.13 times, well within the target range of 0.9 times to 1.2 times.

Negative Updates

Net Realized Losses

Net realized losses for the quarter were approximately $41 million or $0.48 per share, driven by the disposition of investments in several companies.

Challenges with Aggregators

Continued restructuring challenges with Amazon aggregators, with significant nonaccruals remaining in this segment.

Markdowns in Key Investments

Largest markdowns were in Razor Group, Gordon Brothers, and Alpine (4840), indicating ongoing challenges in these investments.

Slight Decrease in Net Asset Value

Net asset value per share slightly decreased to $9.18 from $9.23 in the previous quarter.

Company Guidance

During BlackRock TCP Capital Corp.'s Q1 2025 earnings call, guidance was provided on various financial metrics and strategic directions. The company reported an adjusted net investment income of $0.36 per share, maintaining consistency with the previous quarter, and an annualized net investment income return on equity (ROE) of 15.4%. The net asset value per share slightly decreased to $9.18 from $9.23 in the prior quarter. The portfolio showed signs of stabilization, with the number of companies on nonaccrual status decreasing significantly from 12 to 8, reducing nonaccruals from 5.6% to 4.4% of the portfolio at fair value. Furthermore, BlackRock TCP Capital exited nonaccrual positions in several companies, leading to a decrease in the pro-forma nonaccrual percentage to 4.1% at fair value. The company declared a second quarter dividend of $0.25 and a special dividend of $0.04 per share. Additionally, BlackRock TCP Capital emphasized its focus on investing in first lien loans and maintaining a diversified portfolio, with 90% of the portfolio in senior secured debt and 94% of that amount as floating rate. The weighted average annual effective yield of the portfolio was reported at 12.2%. The call also highlighted the company's ongoing efforts to optimize outcomes for challenged investments and the strategic benefits of leveraging BlackRock's extensive resources.

BlackRock TCP Capital Corporate Events

DividendsFinancial Disclosures

BlackRock TCP Capital Announces Q4 2024 Financial Results

Positive

Feb 27, 2025

On February 27, 2025, BlackRock TCP Capital Corp. announced its financial results for the fourth quarter and year ended December 31, 2024, reporting a net investment income of $0.40 per share for the quarter. The company declared a regular dividend of $0.25 per share and a special dividend of $0.04 per share, payable on March 31, 2025. Additionally, the Adviser agreed to waive one-third of its base management fee for three quarters in 2025. Despite challenges such as higher non-accruals and lower base rates, the company remains optimistic about future prospects and plans to continue declaring special dividends in the upcoming quarters.

DividendsFinancial Disclosures

BlackRock TCP Capital Announces Q4 2024 Financial Results

Positive

Feb 27, 2025

On February 27, 2025, BlackRock TCP Capital Corp. announced its financial results for the fourth quarter and year ended December 31, 2024, reporting a net investment income of $0.40 per share for the quarter. The company declared a first quarter regular dividend of $0.25 per share and a special dividend of $0.04 per share, payable on March 31, 2025. Additionally, the Adviser agreed to waive one-third of its base management fee for three quarters starting January 1, 2025. Despite challenges such as higher non-accruals and lower base rates, the company remains optimistic about its future prospects and plans to declare further special dividends in 2025, subject to board approval.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.