Capitala Finance Corp. is a Business Development Company specializing in investments in traditional mezzanine, senior subordinated and unitranche debt, second-lien loans, equity investments in sponsored and non-sponsored lower and traditional middle market companies. The fund targets companies in the business services, manufacturing, consumer and retail, energy, and health-care industries. It typically considers investments in the United States. The fund invests $5-$50 million per transaction in companies with greater than $4.5 million of TTM EBITDA. It may also invest in first-lien, senior secured positions in "stretch" senior secured loans. The company is based in Charlotte, North Carolina.
CPTA Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Capitala Finance Corp. To summarize, we found that Capitala Finance Corp ranked in the 61th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. The most interesting components of our discounted cash flow analysis for Capitala Finance Corp ended up being:
The company's debt burden, as measured by earnings divided by interest payments, is -0.58; that's higher than only 7.52% of US stocks in the Financial Services sector that have positive free cash flow.
Its compound free cash flow growth rate, as measured over the past 3.32 years, is -0.07% -- higher than merely 19.22% of stocks in our DCF forecasting set.
16% of the company's capital comes from equity, which is greater than only 8.8% of stocks in our cash flow based forecasting set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Financial Services that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as CPTA, try OPY, FSAM, MMAC, SAMG, and AMP.