Oaktree Specialty Lending Corporation (OCSL) Company Bio
OakStreet Specialty Lending Corporation, formerly known as Fifth Street Finance, is a specialty finance company that lends to and invests in small and mid-sized companies, primarily in connection with investments by private equity sponsors. The company was founded in 1998 and is based in Greenwich, Connecticut.
OCSL Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Oaktree Specialty Lending Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Oaktree Specialty Lending Corp ranked in the 39th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 40%. As for the metrics that stood out in our discounted cash flow analysis of Oaktree Specialty Lending Corp, consider:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 58. Its equity weight surpasses that of only 23.01% of free cash flow generating stocks in the Financial Services sector.
Oaktree Specialty Lending Corp's weighted average cost of capital (WACC) is 7%; for context, that number is higher than only 6.4% of tickers in our DCF set.
Oaktree Specialty Lending Corp's effective tax rate, as measured by taxes paid relative to net income, is at 0 -- greater than just 22.88% of US stocks with positive free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
SAFT, WU, NDAQ, TRUP, and MORN can be thought of as valuation peers to OCSL, in the sense that they are in the Financial Services sector and have a similar price forecast based on DCF valuation.