Blue Owl Capital (OBDC) AI Stock Analysis

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Blue Owl Capital

(NYSE:OBDC)

69Neutral

Blue Owl Capital's robust financial performance and valuation are key strengths, supported by a successful merger and increased scale. However, recent revenue declines and cash flow fluctuations, along with mixed technical signals, temper the overall positive outlook.

Positive Factors

Dividend stability

The dividend is secure even in a macro downturn, which is a key benefit for income-oriented investors.

Merger impact

The merger completed with OBDE positions OBDC as the second largest publicly traded BDC, with total assets exceeding $18.5 billion.

Valuation

The stock is still trading at sub-1x book value, making OBDC a top pick in the BDC coverage.

Negative Factors

Portfolio yield

The portfolio yield declined due to lower base rates.

Trading value

OBDC is trading below book value, presenting an attractive risk/reward opportunity and potential for healthy revaluation.

Blue Owl Capital (OBDC) vs. S&P 500 (SPY)

Market Cap

$7.52B

Dividend Yield10.06%

Average Volume (3M)3.97M

Price to Earnings (P/E)9.5

Beta (1Y)0.68

Revenue Growth-1.29%

EPS Growth-24.99%

CountryUS

EmployeesN/A

SectorFinancial

Sector Strength87

IndustryFinancial - Credit Services

Share Statistics

EPS (TTM)0.41

Shares Outstanding511,048,250

10 Day Avg. Volume2,959,715

30 Day Avg. Volume3,969,190

Financial Highlights & Ratios

PEG Ratio7.15

Price to Book (P/B)0.74

Price to Sales (P/S)0.00

P/FCF Ratio-30.68

Enterprise Value/Market Cap2.29

Enterprise Value/Revenue4.00

Enterprise Value/Gross Profit23.78

Enterprise Value/Ebitda8.36

Forecast

1Y Price Target

$15.67

Price Target Upside6.45% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering9

Blue Owl Capital Business Overview & Revenue Model

Company DescriptionBlue Owl Capital (OBDC) is a leading alternative asset management firm that specializes in providing capital solutions and investment strategies across various sectors, including direct lending, GP capital solutions, and real estate. The firm is renowned for its ability to deliver tailored financial services and investment products designed to meet the needs of institutional and individual investors. With a focus on long-term value creation, Blue Owl Capital leverages its deep industry expertise and extensive network to optimize investment opportunities and drive sustainable growth.

How the Company Makes MoneyBlue Owl Capital makes money through a diversified revenue model that primarily includes management fees, performance-based fees, and investment income. The firm generates management fees by overseeing and managing assets for its clients across its various funds and investment vehicles. Performance-based fees are earned when the investments outperform certain benchmarks, aligning the firm's interests with those of its investors. Additionally, Blue Owl Capital earns investment income through the appreciation and returns on its proprietary investments and portfolio holdings. The firm's revenue is further supported by strategic partnerships and collaborations with financial institutions, enhancing its ability to access capital and investment opportunities.

Blue Owl Capital Financial Statement Overview

Summary

Blue Owl Capital displays a robust financial structure with strong profitability and a debt-free balance sheet in 2024. Revenue growth has been significant historically, but recent revenue decline and cash flow fluctuations highlight areas for potential improvement.

Income Statement

Positive

Blue Owl Capital demonstrates a solid gross profit margin, consistently high EBIT margins, and positive net profit margins over the years. However, there was a decline in Total Revenue from 2023 to 2024, indicating a potential concern in revenue growth. Despite this, the company has achieved significant revenue growth from 2020 to 2023.

Balance Sheet

Positive

The balance sheet reflects a strong equity position with zero debt in 2024, enhancing the stability of the company. The equity ratio is healthy, and the return on equity is positive, showing efficient use of equity. However, the company previously had a high debt-to-equity ratio, which has been resolved by eliminating debt.

Cash Flow

Neutral

The cash flow analysis shows fluctuating operating cash flows, with a significant positive free cash flow in 2023 turning to a much lower free cash flow in 2024. The company has managed to maintain positive operating cash flow relative to net income, indicating operational efficiency, but the inconsistency over the recent years poses a risk to cash flow stability.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.19B	1.10B	1.58B	501.22M	663.18M	285.98M
	Gross Profit
725.01M	665.75M	1.18B	194.37M	380.74M	178.54M
	EBIT
667.51M	607.34M	1.20B	783.67M	856.63M	546.38M
	EBITDA
667.51M	607.34M	0.00	543.44M	830.15M	539.77M
	Net Income Common Stockholders
655.10M	594.98M	793.31M	466.36M	624.88M	387.74M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
652.97M	431.77M	572.59M	348.67M	425.66M	349.07M
	Total Assets
13.33B	13.87B	13.51B	13.58B	13.30B	11.30B
	Total Debt
6.89B	7.46B	7.08B	7.28B	7.08B	5.29B
	Net Debt
6.23B	7.03B	6.50B	6.93B	6.65B	4.94B
	Total Liabilities
7.30B	7.91B	7.49B	7.70B	7.36B	5.56B
	Stockholders Equity
6.03B	5.95B	6.02B	5.88B	5.94B	5.75B
Cash Flow		Free Cash Flow
-245.01M	160.22M	1.14B	217.27M	-1.23B	-1.56B
	Operating Cash Flow
-245.01M	160.22M	1.14B	217.27M	-1.23B	-1.56B
	Investing Cash Flow
-958.47M	0.00	0.00	-206.52M	-1.62B	-2.07B
	Financing Cash Flow
16.41M	-305.72M	-921.04M	-219.33M	1.32B	1.60B

Blue Owl Capital Technical Analysis

Technical Analysis Sentiment

Positive

Last Price14.72

Price Trends

50DMA

14.12

Positive

100DMA

14.39

Positive

200DMA

14.18

Positive

Market Momentum

MACD

0.17

Negative

RSI

61.65

Neutral

STOCH

94.56

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OBDC, the sentiment is Positive. The current price of 14.72 is above the 20-day moving average (MA) of 14.17, above the 50-day MA of 14.12, and above the 200-day MA of 14.18, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 61.65 is Neutral, neither overbought nor oversold. The STOCH value of 94.56 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OBDC.

Blue Owl Capital Risk Analysis

Blue Owl Capital disclosed 105 risk factors in its most recent earnings report. Blue Owl Capital reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Blue Owl Capital Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FCFS	73 Outperform	$5.69B	20.28	13.70%	1.18%	5.06%	21.62%
CACC	72 Outperform	$5.83B	21.45	17.24%	―	13.77%	20.95%
OBDC	69 Neutral	$7.52B	9.51	9.52%	10.06%	-1.29%	-24.99%
OMF	68 Neutral	$6.16B	10.97	17.46%	8.03%	9.07%	―
SLM	66 Neutral	$7.07B	12.13	27.60%	1.42%	-0.70%	-12.72%
ALLY	66 Neutral	$11.09B	26.48	3.84%	3.33%	-2.99%	-43.64%
Sector *	64 Neutral	$12.82B	9.87	7.67%	17000.34%	12.39%	-5.85%

* Financial Sector Average

Performance Comparison

OBDC

Blue Owl Capital

14.72

-0.12

-0.81%

CACC

Credit Acceptance

502.63

9.15

1.85%

FCFS

FirstCash

128.15

10.34

8.78%

SLM

33.80

13.19

64.00%

ALLY

Ally Financial

35.66

-2.81

-7.30%

OMF

OneMain Holdings

51.20

6.15

13.65%

Blue Owl Capital Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 7.37%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong portfolio performance, successful merger benefits, and a solid financial position. However, there are challenges due to economic uncertainties and slight declines in net asset value and nonrecurring income. Despite these challenges, the overall position and proactive measures suggest resilience.

Q1-2025 Updates

Positive Updates

Strong Portfolio Performance

Generated an ROE of 10.2%, marking the 11th consecutive double-digit ROE. The portfolio's credit quality remains solid with a low nonaccrual rate well below the industry average.

Successful Merger Completion

Successfully completed the merger between OBDC and OBDE on January 13, which has led to operational efficiencies and a combined strong financial position.

Increased First Lien Investments

Over 90% of first quarter direct loan originations were first lien investments. First lien investments have grown from 73% to 77% of the portfolio over the last year.

Supplemental Dividend Declared

Declared a $0.01 supplemental dividend based on first quarter results, with a second quarter base dividend of $0.37, supported by adjusted earnings with 106% dividend coverage.

Strong Balance Sheet and Liquidity

Ended the quarter with over $3 billion of total cash and facility capacity, providing more than ample unfunded capacity to meet near-term funding needs.

Negative Updates

Slight Decline in NAV

Net asset value per share was $15.14, down $0.12 from the last quarter, primarily due to changes in credit spreads and write-downs on a small number of investments.

Reduction in Nonrecurring Income

Experienced a lower level of one-time nonrecurring income compared to the fourth quarter and a small amount of spread compression of approximately 10 basis points.

Challenging Economic Environment

Uncertainty around tariff policy and a muted M&A environment are causing concerns. The economic outlook remains unclear with potential recessionary pressures.

Company Guidance

During Blue Owl Capital Corporation's first quarter 2025 earnings call, the company provided guidance emphasizing its strong portfolio performance despite a more normalized earnings environment. The company reported a return on equity (ROE) of 10.2% and adjusted net investment income (NII) of $0.39 per share. The net asset value (NAV) per share was $15.14, slightly down from the previous quarter. Blue Owl noted a decrease in nonrecurring income and the impact of previous interest rate cuts. The nonaccrual rate remained low at 0.8% at fair value and 1.4% at cost, reflecting solid credit quality. The portfolio is largely composed of first lien investments, which increased from 73% to 77% over the past year. Blue Owl's leverage at the end of the quarter was 1.26x, slightly above its target range, with expectations to return within target in the second quarter. The company declared a $0.01 supplemental dividend and a second quarter base dividend of $0.37 per share, supported by a healthy spillover income of approximately $0.34. Management highlighted its cautious approach amidst economic uncertainties, focusing on resilient sectors and maintaining a strong balance sheet to navigate potential market volatility.

Blue Owl Capital Corporate Events

M&A TransactionsBusiness Operations and Strategy

Blue Owl Capital Strengthens Position with Major Merger

Positive

Jan 13, 2025

Blue Owl Capital Corporation has completed its merger with Blue Owl Capital Corporation III, resulting in OBDC becoming the second largest publicly traded business development company by total assets. The merger, which increases OBDC’s total assets to $18.6 billion and diversifies its portfolio across 232 companies, is expected to strengthen OBDC’s market position and enhance its ability to deliver attractive risk-adjusted returns. The merger terms included an exchange of OBDE shares for OBDC shares and cash in lieu of fractional shares, with legacy OBDC shareholders owning 76% of the combined entity. This strategic move aims to leverage enhanced scale and operational efficiencies while maintaining strong credit quality.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.