Solar Capital Ltd. invests primarily in leveraged middle markets companies in the form of senior secured loans, mezzanine loans and equity securities. The company was founded in 2007 and is based in New York, New York.
SLRC 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 Solar Capital Ltd. To summarize, we found that Solar Capital Ltd ranked in the 48th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 2.5% on a DCF basis. In terms of the factors that were most noteworthy in this DCF analysis for SLRC, they are:
The company's compound free cash flow growth rate over the past 5.76 years comes in at -0.15%; that's greater than only 12.74% of US stocks we're applying DCF forecasting to.
Solar Capital Ltd's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -0.55. This coverage rate is greater than that of only 18.71% of stocks we're observing for the purpose of forecasting via discounted cash flows.
As a business, Solar Capital Ltd experienced a tax rate of about 0% over the past twelve months; relative to its sector (Financial Services), this tax rate is higher than just 0% of stocks generating free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
FRFHF, BRO, CNA, BGCP, and SPGI can be thought of as valuation peers to SLRC, in the sense that they are in the Financial Services sector and have a similar price forecast based on DCF valuation.
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