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Main Street Capital Corp. (MAIN)
NYSE:MAIN
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Main Street Capital
(NYSE:MAIN)77Outperform
Main Street Capital (MAIN) vs. S&P 500 (SPY)
Market Cap
$5.11B
Dividend Yield5.06%
Average Volume (3M)563.39K
Price to Earnings (P/E)10.0
Beta (1Y)0.69
Revenue Growth51.80%
EPS Growth12.05%
CountryUS
Employees100
SectorFinancial
Sector Strength93
IndustryAsset Management Services
Share Statistics
EPS (TTM)5.84
Shares Outstanding88,557,560
10 Day Avg. Volume681,927
30 Day Avg. Volume563,392
Financial Highlights & Ratios
PEG Ratio0.83
Price to Book (P/B)N/A
Price to Sales (P/S)12.96
Price to Cash Flow (P/CF)9.00
P/FCF Ratio7.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$57.33Price Target Upside-0.56% Downside
Rating ConsensusHold
Number of Analyst Covering3
Main Street Capital Business Overview & Revenue Model
Company DescriptionMain Street Capital Corporation (MAIN) is a principal investment firm that primarily focuses on providing long-term debt and equity capital to lower middle market companies and debt capital to middle market companies. The firm invests in a variety of sectors including manufacturing, distribution, and business services, among others. Main Street Capital aims to partner with entrepreneurs, business owners, and management teams to support the growth and success of their companies.
How the Company Makes MoneyMain Street Capital makes money primarily through interest income and capital gains from its investment portfolio. The company generates revenue by providing debt financing solutions, such as first lien, second lien, and mezzanine loans, to lower middle market companies. Additionally, Main Street Capital takes equity positions in these companies, allowing it to benefit from capital appreciation and dividends. The firm also earns income from its asset management operations, which include management fees and performance-based incentives from managing investment funds or separate accounts for third parties. Key factors contributing to its earnings include the performance of its portfolio companies, interest rates, and the broader economic environment affecting small and medium-sized businesses.
Main Street Capital Financial Statement Overview
Summary
Main Street Capital displays robust revenue growth and strong profitability through its income statement metrics. The balance sheet is solid with a strong equity position and reduced leverage, enhancing financial stability. However, cash flow analysis highlights potential operational cash flow challenges that need to be addressed. Overall, the company is on a positive growth trajectory but should focus on improving cash flow operations.Income Statement
The company has shown strong revenue growth over the years, with a significant increase from $50.1 million in 2020 to $541 million in 2024. The gross profit margin is consistently at 100%, which is typical for asset management firms due to the nature of their revenue recognition. However, the net profit margin is not calculable for 2024 due to missing net income data. EBIT margins are robust, reflecting efficient cost management, but the lack of EBITDA data limits full profitability analysis.75
Positive
Balance Sheet
The balance sheet is solid, with a strong equity base and a debt-free status in 2024, reflecting reduced leverage from previous years. The equity ratio has improved, indicating financial stability and a strong asset base. There is a significant increase in cash reserves, contributing to a healthier liquidity position. However, the absence of debt-to-equity calculations for 2024 limits full leverage analysis.80
Positive
Cash Flow
The cash flow statement shows fluctuations with negative operating cash flows in recent years, which could indicate potential cash management issues. Despite this, the company has a strong investing cash flow, likely from asset sales or investments. The free cash flow turned negative in 2024 compared to previous positive figures, suggesting potential operational cash strains.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 541.03M | 500.38M | 331.15M | 411.17M | 51.00M | Gross Profit |
| 541.03M | 500.38M | 331.15M | 411.17M | 51.00M | EBIT |
| 474.19M | 441.59M | 343.21M | 363.63M | 15.84M | EBITDA |
| 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | Net Income Common Stockholders |
| 508.08M | 428.45M | 241.61M | 330.76M | 29.38M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 78.25M | 60.08M | 49.12M | 32.63M | 31.92M | Total Assets |
| 5.12B | 4.44B | 4.24B | 3.69B | 2.77B | Total Debt |
| 0.00 | 1.81B | 2.00B | 1.80B | 1.21B | Net Debt |
| -78.25M | 1.75B | 1.95B | 1.76B | 1.18B | Total Liabilities |
| 2.32B | 1.97B | 2.13B | 1.90B | 1.25B | Stockholders Equity |
| 2.80B | 2.48B | 2.11B | 1.79B | 1.51B |
| Cash Flow | Free Cash Flow | |||
| -87.12M | 285.32M | -246.94M | -515.37M | -54.08M | Operating Cash Flow |
| -87.12M | 285.32M | -246.94M | -515.37M | -54.08M | Investing Cash Flow |
| 0.00 | 0.00 | 680.02M | 1.05B | 478.01M | Financing Cash Flow |
| 105.29M | -274.36M | 263.43M | 516.08M | 30.76M |
Main Street Capital Technical Analysis
Neutral
57.65
Price Trends
59.54
Negative
55.82
Positive
51.69
Positive
Market Momentum
-0.50
Positive
41.50
Neutral
17.88
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MAIN, the sentiment is Neutral. The current price of 57.65 is below the 20-day moving average (MA) of 59.99, below the 50-day MA of 59.54, and above the 200-day MA of 51.69, indicating a neutral trend. The MACD of -0.50 indicates Positive momentum. The RSI at 41.50 is Neutral, neither overbought nor oversold. The STOCH value of 17.88 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MAIN.
Main Street Capital Risk Analysis
Main Street Capital disclosed 63 risk factors in its most recent earnings report. Main Street 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 0 New Risks
Main Street 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $5.11B | 10.02 | 19.26% | 5.06% | 51.80% | 12.05% | |
76 Outperform | $15.07B | 9.43 | 12.40% | 8.34% | 19.95% | -10.57% | |
67 Neutral | $620.10M | 6.03 | 22.43% | 7.13% | 69.53% | 60.29% | |
67 Neutral | $3.22B | 11.74 | 13.71% | 8.46% | -1.49% | -29.48% | |
65 Neutral | $1.93B | ― | 0.78% | 15.75% | -31.63% | -0.75% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
53 Neutral | $468.17M | 28.87 | 3.28% | 12.62% | ― | -66.59% |
* Financial Sector Average
Performance Comparison
MAIN
Main Street Capital
57.65
15.06
35.36%
GLAD
Gladstone Capital
27.32
8.27
43.41%
HTGC
Hercules Capital
18.60
2.06
12.45%
PNNT
Pennantpark Investment
7.17
1.19
19.90%
PSEC
Prospect Capital
4.35
-0.53
-10.86%
ARCC
Ares Capital
22.45
3.54
18.72%
Main Street Capital Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -1.76% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
Main Street Capital demonstrated strong overall performance with record return on equity, increased dividends, and successful investment exits. However, challenges such as increased non-accrual investments and impacts from floating rate debt investments were noted.Highlights
Record Annualized Return on Equity
Achieved a record annualized return on equity of 25.4% for the quarter and 19.4% for the full year.
Increase in Shareholder Dividends
Increased total dividends paid to shareholders by 6% in the fourth quarter over the prior year, resulting in an 11% increase for the full year.
Successful Exit of Pearl Meyer Investment
Exited investment in Pearl Meyer with a $54 million realized gain, achieving a 69% annual IRR and a 7.7x money invested return on equity.
Expansion of Private Loan Portfolio
Invested approximately $900 million in the private loan strategy in 2024, growing the portfolio by $449 million.
Strong Liquidity Position
Entered 2025 with liquidity including cash and availability under credit facilities in excess of $1.4 billion.
Lowlights
Increase in Non-Accrual Status Investments
Investments on non-accrual status comprised approximately 1.9% of the total investment portfolio at fair value and 3.5% at cost.
Floating Rate Debt Investment Challenges
Experienced a decrease in interest income from floating rate debt investments, primarily due to decreases in benchmark index rates.
Limited Exposure to Government Efficiency Initiatives
Some portfolio companies have limited exposure to potential impacts from government efficiency initiatives.
Company Guidance
During the Main Street Capital Fourth Quarter Earnings Conference Call, the company reported a record annualized return on equity (ROE) of 25.4% for the quarter and 19.4% for the full year 2024. They achieved strong net investment income (NII) per share and distributable net investment income (DNII) per share, which funded record annual shareholder dividends and marked the tenth consecutive quarter of record net asset value (NAV) per share. The company increased total dividends paid to shareholders by 6% in the fourth quarter and 11% for the full year. Main Street also highlighted a $54 million realized gain from exiting their equity investment in Pearl Meyer, contributing significantly to their performance. The investment activities for the fourth quarter included $168 million in the lower middle market and $108 million in private loans, resulting in net increases of $11 million and $7 million, respectively. The company remains optimistic about future performance, supported by significant liquidity, a cost-efficient operating structure, and robust asset management business results. Management expects continued favorable performance in 2025, with plans to recommend additional supplemental dividends.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.