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Sound Point Meridian Capital, Inc.
(NYSE:SPMC)
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Rating:53Neutral
Price Target:
$10.00
â–¼(-0.99% Downside)
Action:Reiterated
Date:02/11/26
The score is held back primarily by weak cash conversion (large negative operating/free cash flow versus reported earnings) and a bearish technical setup with the stock below key moving averages. Earnings call takeaways add further pressure due to the distribution cut, significant NAV decline, and limited liquidity. High reported profitability and a debt-free profile are supportive, but valuation is mixed given the high P/E despite a very high (potentially risk-signaling) dividend yield.
Positive Factors
Balance-sheet strength (no debt)
A debt-free balance sheet with a large equity base gives the firm material solvency and financial flexibility over multiple quarters. This structure reduces refinancing risk, supports opportunistic CLO refinancings or deployments, and improves downside resilience during spread volatility.
Negative Factors
Very weak cash generation
Large negative operating and free cash flows despite strong reported net income indicate earnings are not converting into cash. This undermines dividend sustainability, limits the firm's ability to fund refinancings or opportunistic purchases with internal cash, and strains liquidity over coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance-sheet strength (no debt)
A debt-free balance sheet with a large equity base gives the firm material solvency and financial flexibility over multiple quarters. This structure reduces refinancing risk, supports opportunistic CLO refinancings or deployments, and improves downside resilience during spread volatility.
Read all positive factors
Sound Point Meridian Capital, Inc. (SPMC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$201.88M
Dividend Yield28.48%
Average Volume (3M)20.15K
Price to Earnings (P/E)―
Beta (1Y)0.91
Revenue Growth15.28%
EPS Growth-805.67%
CountryUS
EmployeesN/A
SectorGeneral
Sector StrengthN/A
IndustryAsset Management
Share Statistics
EPS (TTM)-6.30
Shares Outstanding20,537,140
10 Day Avg. Volume23,984
30 Day Avg. Volume20,148
Financial Highlights & Ratios
PEG Ratio-0.23
Price to Book (P/B)1.38
Price to Sales (P/S)6.28
P/FCF Ratio-3.81
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price Target
$10.50Price Target Upside3.96% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)1.36
Revenue Forecast (FY)$59.10M
Sound Point Meridian Capital, Inc. Business Overview & Revenue Model
Company Description
Sound Point Meridian Capital, LLC functions as a closed-end investment firm based in the United States. The company's primary investment strategy involves allocating capital to the equity and mezzanine layers of collateralized loan obligations (CL...
How the Company Makes Money
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Sound Point Meridian Capital, Inc. Earnings Call Summary
Earnings Call Date:May 27, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Nov 12, 2026
Earnings Call Sentiment Neutral
The call presented a mixed picture: the company reported GAAP profitability, unrealized gains and executed accretive portfolio rotations and liability refinancings, and management implemented cost-reduction steps (fee waiver). However, cash earnings (NII) remain below distributions, realized losses were material, and market headwinds—particularly AI-driven software stress, spread compression, reduced CLO issuance and a slowdown in private equity activity—are prominent and have driven a distribution cut. Management emphasized active portfolio management and tactical rotation into higher-yielding secondary positions as mitigation.Positive Updates
Net Investment Income and GAAP Net Income
Reported net investment income (NII) of $5.0 million, or $0.24 per share for the quarter ended 06/30/2026; GAAP net income of $17.5 million, or $0.83 per share.
Negative Updates
NII Below Cash Distributions and Distribution Cut
NII of $0.24 per share was below distributions paid during the quarter; subsequent to quarter end the board set monthly distributions for calendar Q4 2026 at $0.13 per share, down from the prior monthly rate of $0.20 per share (a ~35% reduction).
Read all updates
Q1-2027 Updates
Positive
Negative
Net Investment Income and GAAP Net Income
Reported net investment income (NII) of $5.0 million, or $0.24 per share for the quarter ended 06/30/2026; GAAP net income of $17.5 million, or $0.83 per share.
Read all positive updates
Company Guidance
Management guided to a lower dividend and temporary fee relief while outlining steps to restore NII: they set calendar Q4 2026 monthly distributions at $0.13/share (down from $0.20 in Q3) after reporting Q1 NII of $5.0M ($0.24/share) and $0.60/share of distributions during the quarter; NAV rose to $9.88 from $9.63 (estimated post‑quarter NAV $9.56–$9.66 as of 7/31/26). The adviser proposed a six‑month fee waiver (7/1/26–12/31/26) reducing the base fee from 1.75% to 1.5% and the incentive fee from 20% to 15% of pre‑incentive NII to help offset income compression; portfolio yield improved to 9.8% from 9.1% (management sees go‑forward yield ~10.1%), leverage was 45.7% of assets, total assets $384.7M, net assets $208.1M, portfolio fair value $363.2M, liquidity ~$21M. They emphasized active rotation and liability management (Q1 purchases: 13 investments cost $16.1M at 20.2% weighted yield; sales: 7 investments generated $23.3M at 8.5% yield; YTD rotation roughly $50M buys/$35M sells adding ~100 bps of yield), 13 CLO refis saving ~37 bps, Q1 realized loss $12.8M/unrealized gain $25.2M, total expenses $7.4M, GAAP net income $17.5M ($0.83/share), and a preference to deploy capital into secondary CLO equity (mid–high teens yields) versus primary (estimated 8–9%).Sound Point Meridian Capital, Inc. Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
88
Very Positive
Cash Flow
18
Very Negative
| Breakdown | TTM | Mar 2025 | Dec 2023 |
|---|---|---|---|
Income Statement | |||
| Total Revenue | 86.00M | 64.51M | 64.51M |
| Gross Profit | 67.46M | 64.39M | 64.39M |
| EBITDA | -98.27M | 63.60M | 63.60M |
| Net Income | -130.01M | 63.60M | 63.60M |
Balance Sheet | |||
| Total Assets | 374.53M | 303.21M | 303.21K |
| Cash, Cash Equivalents and Short-Term Investments | 5.81M | 4.99M | 4.99K |
| Total Debt | 60.00M | 0.00 | 0.00 |
| Total Liabilities | 175.83M | 9.05M | 9.05K |
| Stockholders Equity | 198.70M | 294.17M | 294.17K |
Cash Flow | |||
| Free Cash Flow | -20.75B | -106.38M | -106.38M |
| Operating Cash Flow | -20.75B | -106.38M | -106.38M |
| Investing Cash Flow | -78.69M | 0.00 | 0.00 |
| Financing Cash Flow | 17.71B | 85.46M | 85.46M |
Sound Point Meridian Capital, Inc. Technical Analysis
Positive
10.10
Price Trends
10.33
Positive
9.94
Positive
10.84
Negative
Market Momentum
0.14
Negative
65.04
Neutral
82.46
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPMC, the sentiment is Positive. The current price of 10.1 is below the 20-day moving average (MA) of 10.32, below the 50-day MA of 10.33, and below the 200-day MA of 10.84, indicating a neutral trend. The MACD of 0.14 indicates Negative momentum. The RSI at 65.04 is Neutral, neither overbought nor oversold. The STOCH value of 82.46 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SPMC.
Sound Point Meridian Capital, Inc. Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
60 Neutral | $244.21M | 36.59 | <0.01% | 29.18% | 138.32% | -27.91% | |
60 Neutral | $250.62M | 12.05 | 6.38% | 21.11% | 0.37% | -28.29% | |
60 Neutral | $327.22M | -3.15 | -17.68% | 27.85% | -141.00% | -809.18% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
54 Neutral | $78.20M | -1.83 | -32.53% | 24.71% | -11.06% | -288.02% | |
53 Neutral | $201.88M | -1.16 | -54.67% | 27.72% | 15.28% | -805.67% |
* General Sector Average
SPMC
Sound Point Meridian Capital, Inc.
9.83
-4.89
-33.22%
PNNT
Pennantpark Investment
3.82
-2.26
-37.17%
SCM
Stellus Capital
8.76
-4.18
-32.28%
TCPC
BlackRock TCP Capital
4.00
-2.01
-33.50%
GECC
Great Elm Capital
5.89
-3.39
-36.56%
Sound Point Meridian Capital, Inc. Corporate Events
Financial Disclosures
Sound Point Meridian Capital Reports Q2 NAV and Income
Negative
Jul 15, 2026
As of June 30, 2026, Sound Point Meridian Capital, Inc. reported management’s unaudited estimate of net asset value per share in a range between $9.83 and $9.93, providing investors with an indication of the firm’s underlying portfolio...
Financial Disclosures
Sound Point Meridian Updates Estimated Net Asset Value Range
Neutral
Jun 8, 2026
As of May 31, 2026, Sound Point Meridian Capital, Inc. reported an unaudited estimated range for the net asset value of its common stock between $10.57 and $10.67 per share. This valuation update offers investors a snapshot of the company’s ...
DividendsFinancial Disclosures
Sound Point Meridian Capital Reports Quarterly Loss, Declares Distributions
Negative
May 27, 2026
On May 27, 2026, Sound Point Meridian Capital reported results for its fourth fiscal quarter ended March 31, 2026, posting a GAAP net loss of $74.7 million, or $3.63 per share, driven largely by $77.6 million in unrealized losses on investments an...
Dividends
Sound Point Meridian Declares Q2 2027 Monthly Distributions
Positive
May 20, 2026
On May 20, 2026, Sound Point Meridian Capital, Inc. declared monthly common stock distributions of $0.20 per share for its second fiscal quarter of 2027, covering the calendar months ending July 31, August 31, and September 30, 2026. These payment...
Financial Disclosures
Sound Point Meridian Announces April 2026 NAV Estimate
Neutral
May 11, 2026
Sound Point Meridian Capital, Inc. reported that its management’s unaudited estimate of the net asset value per share of its common stock as of April 30, 2026, ranged between $10.53 and $10.63. The disclosure provides investors with a point-...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.