New Mountain Finance (NMFC) Misses Q3 Earnings Estimates

New Mountain Finance (NMFC) reported quarterly earnings of $0.34 per share for the period ending September 2024. This result fell short of the Zacks Consensus Estimate of $0.35 per share. In comparison, the company earned $0.40 per share during the same quarter last year, with these figures adjusted for non-recurring items.

This report indicates an earnings surprise of -2.86%. In the previous quarter, New Mountain was anticipated to produce earnings of $0.36 per share, and it met this expectation precisely, resulting in no surprise.

Over the last four quarters, New Mountain has only exceeded consensus earnings-per-share (EPS) estimates once.

Operating within the Zacks Financial - SBIC & Commercial Industry sector, New Mountain generated revenues of $95.33 million for the quarter ended September 2024. This revenue was above the Zacks Consensus Estimate by 0.71% and is an increase when compared to $94.35 million recorded in the same quarter last year. The company has achieved revenue estimates above consensus two times over the last four quarters.

The immediate future of NMFC's stock performance will largely depend on both the released financial figures and management's insights during the earnings call.

Since the start of 2024, New Mountain shares have declined approximately 10.5%, contrasting with the S&P 500's gain of 22.3%.

What's Next for New Mountain?

Given New Mountain's underperformance this year, many investors wonder what the future holds for the stock.

While there are no straightforward answers, a reliable approach to assess the situation involves looking at the company's earnings outlook. This includes current consensus earnings estimates for upcoming quarters as well as any recent changes to those expectations.

Research indicates that there is a strong correlation between short-term stock movements and trends in earnings estimate revisions. Investors can monitor these revisions independently or use reputable rating tools like the Zacks Rank, known for effectively utilizing earnings estimate revisions.

Leading up to this earnings report, the revision trend for New Mountain was unfavorable. Though the estimates’ direction may shift following the recent earnings announcement, this status currently results in a Zacks Rank #4 (Sell) for the stock, suggesting that shares may underperform in the near term. A full list of today’s Zacks #1 Rank (Strong Buy) stocks can be accessed for further analysis.

Investors should keep an eye on how estimates for upcoming quarters and the current fiscal year adjust in the days to come. The prevailing consensus EPS estimate stands at $0.34 with projected revenues of $93.27 million for the forthcoming quarter, and $1.41 EPS with revenues of $372.07 million for the ongoing fiscal year.

It is also essential to consider that the industry outlook can significantly affect stock performance. The Financial - SBIC & Commercial Industry currently ranks in the bottom 20% among over 250 Zacks industries. Historical data reveals that the top half of Zacks-ranked industries outperform the bottom half by over 2 to 1.

Another company in the same sector, Golub Capital BDC, has yet to disclose its results for the quarter ending September 2024, with an announcement expected on November 19.

This business development company is projected to report quarterly earnings of $0.45 per share, indicating a year-over-year decline of -10%. Additionally, the consensus EPS estimate for this quarter has remained stable over the past 30 days.

Golub Capital BDC's expected revenue stands at $236.62 million, reflecting a 43.8% increase from the same quarter last year.

Earnings, Finance, Stocks