New Mountain Finance (NMFC) Misses Q3 Earnings Estimates

New Mountain Finance (NMFC) has reported its quarterly earnings, revealing a significant performance update. The company announced earnings of $0.34 per share for the quarter ending September 2024. This result fell short of the Zacks Consensus Estimate, which expected earnings of $0.35 per share. For comparison, the company reported $0.40 per share a year ago, indicating a decline in profitability. It's important to note that these figures are adjusted for non-recurring items.

This recent report represents an earnings surprise of -2.86%. Just a quarter ago, analysts expected NMFC to achieve earnings of $0.36 per share, and the company managed to meet this expectation, resulting in no surprise at that time.

Over the past year, New Mountain has only surpassed consensus earnings expectations in one of the last four quarters. On the revenue front, the company achieved revenues of $95.33 million for the same quarter, which modestly exceeded the Zacks Consensus Estimate by 0.71%. This is an improvement from the $94.35 million generated in the same quarter of the previous year. Overall, NMFC has managed to exceed revenue estimates two times during the past four quarters.

The immediate future of NMFC's stock price may be influenced heavily by the insights shared during the upcoming earnings call. It will be crucial to listen for any management commentary that could shape investor expectations.

Looking at stock performance year-to-date, shares of New Mountain Finance have fell by approximately 10.5%, in contrast to the S&P 500, which has seen a gain of 22.3%.

Future Prospects for New Mountain

Given NMFC's underperformance thus far in 2024, many investors are left questioning what lies ahead for the stock. While definitive answers may be elusive, one method to gauge potential movement is by examining the company's earnings outlook. This outlook encompasses not just consensus expectations for upcoming quarters but also any notable changes in these expectations.

Research indicates a strong link between stock movements and the trends in earnings estimate revisions. Investors have the option to track these revisions independently or utilize tools like the Zacks Rank, known for effectively capturing the significance of earnings estimate changes.

Before this earnings announcement, the trend for NMFC's estimate revisions was unfavorable. Although revisions may shift following the latest earnings report, the current situation has resulted in a Zacks Rank #4 (Sell) rating for the stock, indicating a prediction of underperformance in the near term. Investors can view a full list of Zacks #1 Rank (Strong Buy) stocks.

It will be intriguing to see how the earnings estimates for subsequent quarters and the current fiscal year evolve in the near future. Presently, the consensus EPS estimate for the next quarter stands at $0.34, anticipated alongside revenues of $93.27 million. For the ongoing fiscal year, the consensus indicates an EPS estimate of $1.41 on total revenues of $372.07 million.

Furthermore, investors should keep in mind that broader industry trends can significantly impact stock performance. Currently, the Financial - SBIC & Commercial Industry falls within the lowest 20% of the Zacks Industry Rankings out of over 250 industries. Historical data shows that the top 50% of Zacks-ranked industries outperform those in the bottom 50% by a factor of greater than 2 to 1.

Additionally, another player in the industry, Golub Capital BDC, has yet to report its results for the quarter ending September 2024, with its earnings release scheduled for November 19. Golub's anticipated quarterly earnings are approximately $0.45 per share, reflecting a -10% year-over-year change. The consensus estimate for its revenue stands at $236.62 million, representing an increase of 43.8% from the previous year.

Earnings, Finance, Stocks