OFS Capital (NASDAQ:OFS) Releases Quarterly Earnings Results, Misses Expectations By $0.03 EPS

Key Points

• OFS Capital reported Q earnings of $0.18 EPS, missing the consensus by $0.03, with revenue of $3.57M versus an expected $9.45M and a negative net margin of 81.33%.
• The firm recently paid a quarterly dividend of $0.17 (annualized yield ~16.8%), but its dividend payout ratio is negative (-27.53%), raising questions about sustainability.
• Analyst sentiment has weakened—Weiss Ratings downgraded OFS to a "sell" and the MarketBeat consensus is "Reduce" with an average price target of $7.00; the company has a small market cap (~$54M) and a negative P/E.

OFS Capital (NASDAQ:OFS - Get Free Report) posted its quarterly earnings results on Thursday. The investment management company reported $0.18 earnings per share for the quarter, missing the consensus estimate of $0.21 by ($0.03), Zacks reports. The company had revenue of $3.57 million for the quarter, compared to the consensus estimate of $9.45 million. OFS Capital had a negative net margin of 81.33% and a positive return on equity of 8.75%.

OFS Capital Stock Up 0.2%

Shares of OFS Capital stock opened at $4.05 on Friday. The company has a debt-to-equity ratio of 0.45, a current ratio of 0.02 and a quick ratio of 0.02. The stock has a market cap of $54.27 million, a price-to-earnings ratio of -1.64 and a beta of 0.86. The firm's 50-day moving average is $3.72 and its two-hundred day moving average is $4.68. OFS Capital has a 1 year low of $2.72 and a 1 year high of $9.31.

OFS Capital Dividend Announcement

The firm also recently announced a quarterly dividend, which was paid on Tuesday, March 31st. Shareholders of record on Friday, March 20th were issued a dividend of $0.17 per share. This represents a $0.68 annualized dividend and a yield of 16.8%. The ex-dividend date was Friday, March 20th. OFS Capital's dividend payout ratio is presently -27.53%.

Hedge Funds Weigh In On OFS Capital

A number of hedge funds and other institutional investors have recently modified their holdings of the business. Royal Bank of Canada lifted its holdings in shares of OFS Capital by 53.3% during the 4th quarter. Royal Bank of Canada now owns 11,500 shares of the investment management company's stock valued at $55,000 after purchasing an additional 4,000 shares during the last quarter. Bank of America Corp DE grew its stake in OFS Capital by 245.3% during the 4th quarter. Bank of America Corp DE now owns 7,079 shares of the investment management company's stock worth $57,000 after buying an additional 5,029 shares during the last quarter. Jane Street Group LLC acquired a new position in OFS Capital during the 4th quarter valued at about $66,000. Squarepoint Ops LLC acquired a new position in OFS Capital during the 4th quarter valued at about $202,000. Finally, Marshall Wace LLP purchased a new stake in OFS Capital in the fourth quarter valued at about $377,000. 10.81% of the stock is currently owned by institutional investors.

Analyst Ratings Changes

Separately, Weiss Ratings downgraded OFS Capital from a "hold (c-)" rating to a "sell (d+)" rating in a report on Wednesday, January 7th. One analyst has rated the stock with a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, the company currently has a consensus rating of "Reduce" and an average price target of $7.00.

OFS Capital Company Profile

OFS Capital Corporation NASDAQ: OFS is a business development company (BDC) that provides customized debt and equity financing solutions to U.S. middle-market companies. As an externally managed BDC, OFS Capital focuses on sponsoring capital structures that support growth initiatives, recapitalizations, acquisitions and other strategic transactions. The firm targets companies that demonstrate strong cash flow potential and scalable business models across a range of industries.

The company's investment portfolio typically includes senior secured loans, unitranche facilities, mezzanine debt and equity co-investments.