FS KKR Capital (FSK) AI Stock Analysis

• Market Cap: $5.24B
• Dividend Yield: 14.96%
• Average Volume (3M): 2.89M
• Price to Earnings (P/E): 9.0
• Beta (1Y): 0.47
• Revenue Growth: -16.13%
• EPS Growth: -15.88%
• Country: US
• Employees: 1,383
• Sector: Financial
• Sector Strength: 86
• Industry: Asset Management
• EPS (TTM): 2.09
• Shares Outstanding: 280,066,440
• 10 Day Avg. Volume: 3,743,752
• 30 Day Avg. Volume: 2,890,425
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.38
• Price to Cash Flow (P/CF): 1.50
• P/FCF Ratio: 1.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $21.00
• Price Target Upside: 12.18% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

FS KKR Capital's overall score is weighed down by operational challenges, particularly the zero revenue in the latest year. Strong cash flow and a solid balance sheet provide stability, while the low P/E ratio and high dividend yield enhance its valuation appeal. The balanced sentiment from the earnings call, with notable strengths and challenges, rounds out the company's current outlook.

Positive Factors

Financial Performance

FSK reported adjusted NOI of $0.74, ahead of the $0.71 estimate, driven by higher fees and dividend income.

Management Strategy

Management maintained its positive view toward carrying a full spillover balance, citing the payout protection.

Portfolio Positioning

FSK's deep discount compared to the index may be well positioned to tighten as the portfolio turns.

Negative Factors

Credit Impacts

Net credit impacts totaled -$0.17, with deeper marks on some new challenged credits.

Joint Venture Performance

The COP JV delivered lower dividends, with a decrease to $48.6 million from $53.9 million sequentially.

Non-Accruals

Non-accruals were managed down, but two new names, Accuride and Tangoe, were added to the list.

FS KKR Capital Business Overview & Revenue Model

Company Description

FS KKR Capital Corp. (FSK) is a leading business development company (BDC) that provides customized credit solutions to private middle-market companies in the United States. The company operates across various sectors, focusing on industries such as healthcare, manufacturing, and energy. FSK primarily invests in senior secured debt, subordinated debt, and equity-related securities, offering flexible financing solutions to its clients.

How the Company Makes Money

FS KKR Capital makes money primarily through interest income and capital gains from its investment portfolio, which consists of debt and equity securities. The company earns interest income by providing loans to middle-market companies at various interest rates. These loans are typically structured as senior secured debt, offering FSK a higher claim on the borrower's assets in case of default. Additionally, FSK generates revenue from capital gains realized on the sale of equity investments. The company may also earn fee income through structuring fees, commitment fees, and other transaction-related fees associated with the origination and management of its investment portfolio. FSK benefits from its strategic partnership with KKR, a leading global investment firm, which provides access to extensive industry expertise, deal flow, and operational support.

FS KKR Capital Financial Statement Overview

Summary

FS KKR Capital's financial performance is mixed. Strong cash flow generation and a debt-free balance sheet in the latest year are positives. However, a significant concern is the income statement, showing zero revenue in the latest year, indicating major operational challenges and instability in profitability.

Income Statement

The income statement shows a volatile revenue trajectory with an alarming drop to zero revenue in the most recent year. Gross profit margin cannot be assessed due to zero gross profit and revenue. Previous years showed declining net profit margin and significant fluctuations in EBIT and EBITDA margins, indicating instability in profitability.

Balance Sheet

FS KKR Capital's balance sheet reveals a strong equity base with a debt-free position in the latest year, which is beneficial for stability. The equity ratio has improved, reflecting a solid financial structure. However, previous years exhibited substantial debt levels, which could have posed risks if not managed properly.

Cash Flow

Cash flow analysis shows robust operating cash flows, particularly in the latest year, indicating strong cash generation capabilities. The free cash flow to net income ratio is favorable, but the operating cash flow to net income ratio is uncalculable due to zero net income in the latest year. Historical free cash flow growth is solid, enhancing the liquidity position.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
664.00M	1.83B	1.64B	1.08B	639.00M
	Gross Profit
664.00M	1.07B	1.27B	846.00M	524.00M
	EBIT
2.09M	1.38B	481.00M	1.53B	-395.00M
	EBITDA
2.09M	1.18B	1.87B	7.16M	149.00M
	Net Income Common Stockholders
585.00M	696.00M	92.00M	1.51B	-405.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
278.00M	231.00M	251.00M	377.00M	191.00M
	Total Assets
14.22B	15.47B	16.12B	17.23B	7.24B
	Total Debt
0.00	8.19B	8.69B	9.14B	4.00B
	Net Debt
-278.00M	7.96B	8.44B	8.77B	3.81B
	Total Liabilities
7.60B	8.62B	9.11B	9.50B	4.14B
	Stockholders Equity
6.62B	6.85B	7.01B	7.73B	3.10B
Cash Flow		Free Cash Flow
1.90B	1.38B	1.11B	-639.00M	675.00M
	Operating Cash Flow
1.90B	1.38B	1.11B	-639.00M	675.00M
	Investing Cash Flow
0.00	0.00	99.00M	-1.02B	-35.00M
	Financing Cash Flow
-1.84B	-1.40B	-1.23B	825.00M	-590.00M

FS KKR Capital Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 18.72
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FSK, the sentiment is Negative. The current price of 18.72 is below the 20-day moving average (MA) of 20.28, below the 50-day MA of 21.45, and below the 200-day MA of 19.80, indicating a bearish trend. The MACD of -0.22 indicates Negative momentum. The RSI at 50.81 is Neutral, neither overbought nor oversold. The STOCH value of 67.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FSK.

FS KKR Capital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GBDC	76 Outperform	$3.63B	9.94	9.40%	12.13%	16.10%	-24.30%
MAIN	74 Outperform	$4.59B	8.85	19.26%	5.79%	51.80%	12.05%
BXSL	74 Outperform	$6.23B	7.93	12.59%	11.10%	15.77%	-4.88%
HTGC	67 Neutral	$2.91B	10.45	13.71%	9.51%	-1.49%	-29.48%
NMFC	66 Neutral	$996.55M	8.98	8.49%	13.85%	-3.55%	-20.43%
Sector *	64 Neutral	$13.37B	9.30	9.39%	4.85%	16.11%	-8.85%
FSK	57 Neutral	$5.24B	8.96	8.69%	14.96%	-16.13%	-15.88%

FS KKR Capital Corporate Events

FS KKR Capital Reports Q4 2024 Financial Results

FS KKR Capital Corp. announced its financial results for the fourth quarter and full year of 2024, highlighting a net investment income of $0.61 per share for the quarter and $2.90 per share for the year. The company declared a first quarter 2025 distribution of $0.70 per share, to be paid in April 2025. Despite a decrease in net asset value and earnings per share compared to previous quarters, the company maintains a strong liquidity position with $4.8 billion available, which is expected to support continued private market activity.

FS KKR Capital’s Co-President Takes Leave of Absence

On February 3, 2025, FS KKR Capital Corp. announced that Co-President Brian Gerson is taking a leave of absence. His responsibilities will be temporarily assumed by Co-President Daniel Pietrzak, who is also the Chief Investment Officer and a board member, along with other company officers, ensuring continuity in leadership and operations.