Value
8.7/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 8.8 |
| Fwd P/E | 9.7 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 6.8x
- ▸PEG: 0.02
- ▸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.
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. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
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 score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
NMFC trades at a cheap 6.8x forward P/E with a near-zero PEG ratio of 0.02, screening as attractively valued relative to its earnings power. Valuation breakdown | The forward P/E should stay compressed or the stock should re-rate higher toward peer multiples if the valuation gap is real over the next 12 months. | →Stable |
| CounterA single-digit forward multiple with a near-zero PEG can also signal the market correctly pricing in structural earnings decay rather than a genuine bargain. | ||
Revenue is declining sharply, down 20% based on the growth data, undermining the case that the cheap valuation reflects a healthy underlying business. Growth breakdown | Revenue growth should turn positive or at least stabilize meaningfully above the current -20% pace over the next several quarters. | →Stable |
| CounterBusiness development companies can see lumpy top-line figures tied to portfolio marks and realizations rather than a genuine operating decline. | ||
The stock is in a confirmed technical downtrend, trading below its 200-day moving average with a negative moving-average slope of -2.8% over 30 days. Momentum breakdown | Price should reclaim and hold above the 200-day moving average if the downtrend is set to reverse over the next several months. | →Stable |
| CounterA confirmed downtrend can persist well beyond typical mean-reversion windows for income-oriented small caps with thin institutional sponsorship. | ||
The company has missed earnings in 2 of its last 4 quarters with a deeply negative average surprise, raising doubts about estimate reliability. Earnings | The beat rate should improve back above 50% over the next few reporting quarters if execution stabilizes. | →Stable |
| CounterTwo misses in four quarters is a modest sample and can reflect one-off items rather than a durable deterioration in execution. | ||
The engine's risk/reward gate failed, with the asymmetry ratio at 0.7, below the 1.5 threshold required to clear the setup as favorable. Engine gate (failed) | The asymmetry ratio should climb back above the 1.5 threshold if downside risk shrinks or upside potential expands over the next few months. | →Stable |
| CounterA gate failure at 0.7 versus a 1.5 threshold is a relatively narrow miss and could flip with only modest improvement in either upside modeling or downside containment. | ||
NMFC trades at a cheap 6.8x forward P/E with a near-zero PEG ratio of 0.02, screening as attractively valued relative to its earnings power.
→StableValuation breakdown
- Expectation
- The forward P/E should stay compressed or the stock should re-rate higher toward peer multiples if the valuation gap is real over the next 12 months.
CounterA single-digit forward multiple with a near-zero PEG can also signal the market correctly pricing in structural earnings decay rather than a genuine bargain.
Revenue is declining sharply, down 20% based on the growth data, undermining the case that the cheap valuation reflects a healthy underlying business.
→StableGrowth breakdown
- Expectation
- Revenue growth should turn positive or at least stabilize meaningfully above the current -20% pace over the next several quarters.
CounterBusiness development companies can see lumpy top-line figures tied to portfolio marks and realizations rather than a genuine operating decline.
The stock is in a confirmed technical downtrend, trading below its 200-day moving average with a negative moving-average slope of -2.8% over 30 days.
→StableMomentum breakdown
- Expectation
- Price should reclaim and hold above the 200-day moving average if the downtrend is set to reverse over the next several months.
CounterA confirmed downtrend can persist well beyond typical mean-reversion windows for income-oriented small caps with thin institutional sponsorship.
The company has missed earnings in 2 of its last 4 quarters with a deeply negative average surprise, raising doubts about estimate reliability.
→StableEarnings
- Expectation
- The beat rate should improve back above 50% over the next few reporting quarters if execution stabilizes.
CounterTwo misses in four quarters is a modest sample and can reflect one-off items rather than a durable deterioration in execution.
The engine's risk/reward gate failed, with the asymmetry ratio at 0.7, below the 1.5 threshold required to clear the setup as favorable.
→StableEngine gate (failed)
- Expectation
- The asymmetry ratio should climb back above the 1.5 threshold if downside risk shrinks or upside potential expands over the next few months.
CounterA gate failure at 0.7 versus a 1.5 threshold is a relatively narrow miss and could flip with only modest improvement in either upside modeling or downside containment.
TrendMatrix Research · core thesis
Engine thesis — one sentence
NMFC screens as attractively valued on forward earnings multiples, but a confirmed technical downtrend, declining revenue, consecutive earnings misses, and a failed asymmetry gate all argue for caution despite the cheap headline valuation.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 3.7 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 0.0 |
| Current ratio | 6.4 |
| FCF quality | 10.0 |
| Moat | 4.0 |
| Rule of 40 | 3.0 |
| Piotroski F | 6.7 |
- ▸FCF-positive despite GAAP loss (FCF margin 30%, FCF yield 14.0%)
- ▸No competitive moat
- ▸Rule of 40: 11 (fail)
Growth
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
| EPS growth | 10.0 |
- ▸Declining revenue: -20%
Momentum
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 6.1 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 1.2 |
- ▸Capitulation risk (RSI 30, below 200MA)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -2.9%/30d — confirmed downtrend
Sentiment
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 7.8 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 21%
Insider
7.1/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| holder change | 9.7 |
- ▸Modest insider selling — $611,684 (0.091% of mkt cap)
- ▸Institutions accumulating
Peer rank
2.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.0 |
| quality rank | 0.5 |
| growth rank | 0.8 |
Technical
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.1 |
| support resistance | 7.7 |
| 52w position | 4.9 |
Risk (lower is worse)
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.5 |
| days to cover | 2.0 |
| volatility | 5.6 |
| put call | 0.0 |
| max pain risk | 3.0 |
| beta | 9.3 |
| debt equity | 4.5 |
- ▸Elevated put/call: 2.27
- ▸Above max pain $2
Catalyst
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 5.5 |
- ▸Earnings concerns: 0B/2M
- ▸Dividend: 16.9%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:27d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:2.5<4.5
- ASYMMETRY:1.0<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.00
Upside
+5.6%
Downside
5.5%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
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 4.9 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 8.7) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:2.5<4.5, ASYMMETRY:1.0<1.5@spot, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 1.00 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 8.7, Insider at 7.1, and Technical at 6.6; the weakest are Momentum at 2.5, Peer rank at 2.8, and Catalyst at 3.1. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of 1.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Valuation Vs Earnings Power
Trip ifForward P/E rises above 12x from the current 6.8x, eroding the valuation discount.
- P2Declining Revenue Growth Concern
Trip ifRevenue growth rises above 0% YoY for 2 consecutive quarters, from the current -20% decline.
- P3Confirmed Technical Downtrend
Trip ifPrice rises above the 200-day moving average and stays above it for 2 consecutive weeks, reversing the confirmed downtrend.
- P4Consecutive Earnings Misses
Trip ifQuarterly EPS beat rate rises above 50% for 2 consecutive quarters, versus the current 0-of-2 beat streak.
- P5Negative Asymmetry Gate Failure
Trip ifAsymmetry ratio rises above 1.5 from the current 0.7, clearing the engine's gate threshold.