Value
8.5/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 8.8 |
| Fwd P/E | 9.8 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 6.6x
- ▸PEG: 0.04
- ▸Attractively valued
NMFC · Why this verdict
Why New Mountain Finance Corporatio (NMFC) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. People who build TrendMatrix, or entities they control, may hold positions, long or short, in securities it covers, and may trade them at any time. Positions are not disclosed individually. Verdicts are generated by an automated model applied by the same rules to every covered stock, and are not adjusted for any position held by the people who build TrendMatrix. We do not accept payment from issuers for coverage.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.6/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
New Mountain Finance trades at a low forward multiple with an 11.2% free-cash-flow yield and earnings back in line, but a confirmed downtrend, declining revenue, a dividend yield-trap warning and only 8.2% upside to the target limit the case.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company is free-cash-flow positive despite a GAAP loss, with a 24% FCF margin and an 11.2% FCF yield. Quality breakdown | FCF yield should stay above 8% as the portfolio income recovers. | →Stable |
| CounterThe Rule of 40 reads -2 (fail), there is no competitive moat and net margin scores 0.0, so cash flow may not be durable. | ||
Valuation is attractive, with a forward P/E of 6.3x and a PEG of 0.04, and the value rank is 9.1 out of 10 versus peers. Valuation breakdown | The forward P/E should stay below 9x while earnings hold. | ↓Deteriorating |
| CounterPeer quality and growth ranks are near zero (0.4 and 0.7), so the low multiple may fairly reflect weak fundamentals. | ||
EPS of $0.26 in the August 2026 quarter matched the $0.26 estimate, after a -$0.51 loss in May 2026, suggesting earnings are stabilizing. Last 4 quarters | Quarterly EPS should stay at about $0.26 and match estimates at the 2 November 2026 report. | ↑Improving |
| CounterThe company has no beats in the last four quarters (2 misses and 2 in line), and EPS has fallen from $0.32 to $0.26 over the same period. | ||
The dividend can be maintained despite a yield-trap warning that flags a high yield with a dividend safety score of 4.0. Catalyst breakdown | The dividend safety score should recover to 5.0 or above as earnings stabilize. | ↑Improving |
| CounterThe revenue line is declining 26% and one quarter showed negative revenue of -$54.5M, which raises the risk of a dividend cut. | ||
Price of $6.67 sits 8.2% below the $7.21 analyst target, against 5.0% downside to the $6.35 stop, a reward-to-risk of 1.6. Upside pct | Price should reach the analyst target if earnings and the dividend hold. | ↓Deteriorating |
| CounterPrice is below a falling 200-day average (down 2.8% over 30 days) with falling on-balance volume and an elevated put/call ratio of 5.00. | ||
The company is free-cash-flow positive despite a GAAP loss, with a 24% FCF margin and an 11.2% FCF yield.
→StableQuality breakdown
- Expectation
- FCF yield should stay above 8% as the portfolio income recovers.
CounterThe Rule of 40 reads -2 (fail), there is no competitive moat and net margin scores 0.0, so cash flow may not be durable.
Valuation is attractive, with a forward P/E of 6.3x and a PEG of 0.04, and the value rank is 9.1 out of 10 versus peers.
↓DeterioratingValuation breakdown
- Expectation
- The forward P/E should stay below 9x while earnings hold.
CounterPeer quality and growth ranks are near zero (0.4 and 0.7), so the low multiple may fairly reflect weak fundamentals.
EPS of $0.26 in the August 2026 quarter matched the $0.26 estimate, after a -$0.51 loss in May 2026, suggesting earnings are stabilizing.
↑ImprovingLast 4 quarters
- Expectation
- Quarterly EPS should stay at about $0.26 and match estimates at the 2 November 2026 report.
CounterThe company has no beats in the last four quarters (2 misses and 2 in line), and EPS has fallen from $0.32 to $0.26 over the same period.
The dividend can be maintained despite a yield-trap warning that flags a high yield with a dividend safety score of 4.0.
↑ImprovingCatalyst breakdown
- Expectation
- The dividend safety score should recover to 5.0 or above as earnings stabilize.
CounterThe revenue line is declining 26% and one quarter showed negative revenue of -$54.5M, which raises the risk of a dividend cut.
Price of $6.67 sits 8.2% below the $7.21 analyst target, against 5.0% downside to the $6.35 stop, a reward-to-risk of 1.6.
↓DeterioratingUpside pct
- Expectation
- Price should reach the analyst target if earnings and the dividend hold.
CounterPrice is below a falling 200-day average (down 2.8% over 30 days) with falling on-balance volume and an elevated put/call ratio of 5.00.
Per-dimension breakdown
Quality
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 3.5 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 0.0 |
| Current ratio | 6.0 |
| FCF quality | 8.9 |
| Moat | 4.0 |
| Rule of 40 | 3.0 |
| Piotroski F | 6.7 |
- ▸FCF-positive despite GAAP loss (FCF margin 24%, FCF yield 10.8%)
- ▸No competitive moat
- ▸Rule of 40: -2 (fail)
Growth
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
| EPS growth | 10.0 |
- ▸Declining revenue: -26%
Momentum
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 6.6 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 1.9 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -2.9%/30d — confirmed downtrend
Sentiment
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 8.0 |
| Analyst rating | 5.0 |
| Price target | 7.7 |
- ▸LLM news sentiment: +0.60 (n=2)
Insider
6.6/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 7.9 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
2.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.8 |
| quality rank | 0.4 |
| growth rank | 0.7 |
Technical
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.1 |
| support resistance | 2.5 |
| 52w position | 6.2 |
Risk (lower is worse)
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.9 |
| days to cover | 5.2 |
| volatility | 6.6 |
| put call | 0.0 |
| implied vol | 5.5 |
| beta | 9.1 |
| debt equity | 4.4 |
- ▸Elevated put/call: 10.00
Catalyst
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 4.0 |
| news activity | 7.0 |
- ▸Earnings concerns: 0B/2M
- ▸Earnings in 4 days
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- MOMENTUM:5.4>=4.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:0.7<1.5@spot
- EARNINGS_PROXIMITY:4d<=7d
Warning (3)
- MOMENTUM:5.4<5.5 (soft — BUY_NOW allowed but watch)
- DEATH_CROSS:momentum=5.4>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.69
Upside
+4.4%
Downside
6.4%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 53
EdgeInst Constrain — Small cap ($0.7B) below institutional reach
SuitabilityAggressive — MCap $0.7B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.6 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 8.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.7<1.5@spot, EARNINGS_PROXIMITY:4d<=7d) reinforce the read. Current asymmetry R:R is 0.69 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 8.5, Sentiment at 6.8, and Insider at 6.6; the weakest are Peer rank at 2.7, Catalyst at 3.5, and Technical at 3.6. The V9 engine flagged 2 failed gates with 3 warnings, producing an asymmetric reward-to-risk of 0.69 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Fcf Yield
Trip ifFCF yield falls below 6% from the current 11.2%.
- P2Low Forward Multiple
Trip ifForward P/E exceeds 9x from the current 6.3x.
- P3Earnings Back In Line
Trip ifQuarterly EPS falls below $0.20 from the current $0.26.
- P4Dividend Sustainability
Trip ifDividend safety score falls below 3.0 from the current 4.0.
- P5Limited Upside In Downtrend
Trip ifPrice falls below the $6.35 stop, a drop of more than 4.8% from $6.67.