New Mountain Finance Corporation (NMFC, Financial) reported a net asset value of $12.45 per share, a slight decrease from the previous $12.55 as of December 31, 2024. The firm emphasizes its investment focus on defensive sectors, which it believes will help navigate the current turbulent market conditions. NMFC asserts that its positioning is advantageous compared to other credit funds, especially concerning tariffs and political uncertainties.
Throughout the first quarter, NMFC demonstrated strong credit performance, with over 96% of its portfolio maintaining a solid status. The company expresses confidence in its capability to consistently provide yield with a greater margin of safety. Furthermore, NMFC highlights significant advancements in its strategic priorities, such as reducing payment-in-kind (PIK) income, diversifying its top investments, and decreasing liability costs.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for New Mountain Finance Corp (NMFC, Financial) is $11.92 with a high estimate of $13.00 and a low estimate of $10.00. The average target implies an upside of 22.10% from the current price of $9.76. More detailed estimate data can be found on the New Mountain Finance Corp (NMFC) Forecast page.
Based on the consensus recommendation from 7 brokerage firms, New Mountain Finance Corp's (NMFC, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for New Mountain Finance Corp (NMFC, Financial) in one year is $8.81, suggesting a downside of 9.73% from the current price of $9.76. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the New Mountain Finance Corp (NMFC) Summary page.
NMFC Key Business Developments
Release Date: February 27, 2025
- Adjusted Net Investment Income: $0.32 per share for Q4 2024.
- Net Asset Value (NAV) per Share: $12.55, a decline of $0.07 or 0.6% from the previous quarter.
- Dividend: $0.32 per share, payable on March 31, 2025.
- Investment Income: $91 million for Q4 2024, a 2% decrease from the prior year.
- Total Assets: $3.2 billion as of December 31, 2024.
- Total Liabilities: $2 billion, with statutory debt outstanding at $1.6 billion.
- Portfolio Investments: Over $3 billion at fair value as of December 31, 2024.
- Debt to Equity Ratio: 1.15 to 1, net of available cash.
- Recurring Investment Income: 96% of total investment income in Q4 2024.
- Floating Rate Loan Portfolio: 86% floating rate, 14% fixed rate.
- Portfolio Yield: Increased to 11% for Q4 2024.
- Leverage Maturity Schedule: Over 60% of debt matures in or after 2028.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- New Mountain Finance Corp (NMFC, Financial) reported adjusted net investment income of $0.32 per share, covering their regular dividend.
- The company announced a $0.32 dividend payable on March 31, supported by strong recurring earnings.
- NMFC successfully sold a stake in Unitec Global Services, resulting in a $42 million return and retaining a 31% ownership stake.
- The portfolio is well-positioned in defensive growth industries, with 97% of assets rated green, indicating strong credit quality.
- NMFC's loans are primarily in senior-oriented assets, with a focus on high-quality industries and strong free cash flow conversion.
Negative Points
- Net asset value per share declined by $0.07 or 0.6%, indicating a slight decrease in portfolio value.
- The company experienced a slower start to 2025 than expected, potentially impacting future activity levels.
- There are concerns about the cybersecurity market affecting Health Systems, a significant portfolio company.
- Spreads have tightened, leading to challenges in finding attractive pricing for new deals.
- The market environment remains uncertain, with potential headwinds from political and regulatory volatility.
