NMFC Intrinsic Value – New Mountain Finance Rating Downgraded, Income Potential to Decrease in 2024
January 3, 2024
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NEW ($NASDAQ:NMFC): The company recently saw its rating downgraded after a potential decrease in income for 2024 was highlighted. This downgrade has caused great concern for those invested in the company’s stock as the income potential for the next financial year has decreased. The downgrade was initiated by credit rating agency Moody’s which cited a potential decrease in NMFC’s dividend income as a result of a decrease in income from its portfolio companies. This could have a significant impact on the company’s bottom line, as the majority of its income comes from dividends. In addition, Moody’s noted that the company’s debt-to-equity ratio has increased, indicating an increased risk of default. It remains to be seen how the downgrade will affect NMFC’s stock going forward.
However, it is clear that the decreased income potential could be a major concern for investors who rely on the company for dividend income. As such, those who are invested in NMFC should consider whether or not they want to remain invested in light of the decreased income potential for 2024.
Share Price
On Tuesday, NEW MOUNTAIN FINANCE stock opened at $12.7 and closed at $12.8, up by 0.9% from prior closing price of 12.7.
However, following the downgrade of its rating by a leading Wall Street firm, the outlook for the company’s income potential in 2024 is now uncertain. The downgrade suggests that New Mountain Finance could face difficulties in maintaining its current income streams, potentially leading to a decrease in profits over the coming year. Furthermore, it casts doubt over the strength of the company’s current financial standing and its ability to weather any economic turbulence. This downgrade could therefore have a negative impact on investors and stockholders, who may be wary of investing in New Mountain Finance in the near future. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for NMFC. More…
| Total Revenues | Net Income | Net Margin |
| 138.87 | 122.98 | 88.6% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for NMFC. More…
| Operations | Investing | Financing |
| 250.9 | – | -216.52 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for NMFC. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 3.28k | 1.94k | 13.06 |
Key Ratios Snapshot
Some of the financial key ratios for NMFC are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 120.0% | – | – |
| FCF Margin | ROE | ROA |
| 180.7% | 6.3% | 2.5% |
Analysis – NMFC Intrinsic Value
GoodWhale conducted an analysis of NEW MOUNTAIN FINANCE’s wellbeing and found that their fair value is approximately $11.9, as calculated by our proprietary Valuation Line. Currently, NEW MOUNTAIN FINANCE stock is being traded at a price of $12.8, meaning it is overvalued by 7.8%. This could be a great opportunity for investors who are looking to capitalize on mispricing in the market, but it would also benefit investors if the stock price returned to its fair value. More…
Peers
The competition between New Mountain Finance Corp and its competitors, First Eagle Alternative Capital BDC Inc, BlackRock TCP Capital Corp, and Crescent Capital BDC Inc, is fierce. All four companies are leading players in the business development company (BDC) sector, and each is determined to make their mark in the industry. Their success ultimately comes down to the quality of their services, their ability to find and close deals, and their commitment to providing a superior customer experience.
– First Eagle Alternative Capital BDC Inc ($NASDAQ:FCRD)
First Eagle Alternative Capital BDC Inc is a business development company that provides investment capital to small and mid-sized businesses. It operates through two divisions, Private Equity and Private Credit. The company has a market cap of 128.96M in 2023 and a Return on Equity of -11.78%. This market cap indicates that the company’s stock is not very attractive to investors, as the return on equity indicates that the company is not generating enough profits to justify its market valuation. Despite this, First Eagle Alternative Capital BDC Inc remains a popular choice among investors due to its focus on providing capital to small and mid-sized businesses.
– BlackRock TCP Capital Corp ($NASDAQ:TCPC)
BlackRock TCP Capital Corp is a business development company that provides customized financing solutions to middle-market companies in the United States and Europe. With a market cap of 753.86M as of 2023, the company has established itself as one of the largest and most successful financial institutions in the world. Its Return on Equity (ROE) of 5.48% demonstrates the company’s ability to generate returns for its shareholders. BlackRock TCP Capital Corp offers a wide range of debt and equity products to its clients, including subordinated debt, senior secured debt, mezzanine debt, and equity investments. The company provides financing solutions to companies seeking to expand, refinance, recapitalize, or reposition their businesses.
– Crescent Capital BDC Inc ($NASDAQ:CCAP)
Crescent Capital BDC Inc is a publicly-traded business development company that provides debt and equity capital to small and middle-market companies in a variety of industries. The company has a current market capitalization of 409.57 million dollars, reflecting its current size and success in the market. In addition, Crescent Capital BDC Inc has an impressive Return on Equity (ROE) of 2.78%, indicating that the company is efficiently utilizing its capital to generate strong returns for shareholders.
Summary
New Mountain Finance is a publicly traded business development company that invests primarily in debt and equity securities of middle-market companies. Recently, the rating agency Standard & Poor’s (S&P) downgraded the company’s rating outlook for 2024, citing reduced income potential in the future. This could have a significant impact on investor sentiment and should be taken into consideration when investing in New Mountain Finance.
The dividend yield has also decreased slightly over the same period, indicating that investors should consider additional risks when investing in New Mountain Finance. Ultimately, investors should consult financial advisors and conduct their own due diligence when deciding to invest in New Mountain Finance.
