Equity Research Analysis: Bain Capital Specialty Finance, Inc. (BCSF)
|Blank Capital Research Unit|Spot: $13.15
Price$13.15
Composite Score42.3/100
RatingREDUCE (2★)
Rank#3226 OF 7,333
Market Cap$886M
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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#3226
Positioning
Market Dominance
Financial
Financial Services
$886M
Michael A. Ewald
Bain Capital Specialty Finance, Inc. specializes in direct loans to middle-market companies. It typically invests in companies with EBITDA between $10 million and $150 million.
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Dates updated upon official exchange announcement.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = BCSF ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$GBDC GOLUB CAPITAL BDC, Inc. | 64 | 91 | 89 | 57 | 22.5x | 6.6x | 5.7% | 1.7% | 100.0% | 64.3% | 25.4% | 116.4% | 12.6% | 128.0x | $3.7B | VS | |
$SAR SARATOGA INVESTMENT CORP. | 55 | 30 | 69 | 85 | 1.4x | 2.3x | 43.6% | 22.2% | - | - | 182.5% | -10.7% | 17.0% | 263.0x | $362M | VS | |
$CGBD Carlyle Secured Lending, Inc. | 53 | 72 | 67 | 40 | 14.2x | 6.1x | 6.8% | 2.0% | 100.0% | 73.2% | 24.8% | 18.0% | 13.6% | 111.0x | $911M | VS | |
$BBDC Barings BDC, Inc. | 53 | 25 | 31 | 79 | 23.4x | 10.1x | 9.8% | - | - | - | - | -103.3% | 13.6% | 139.0x | $921M | VS | |
$SLRC SLR Investment Corp. | 52 | 33 | 47 | 75 | 8.9x | 8.7x | 9.2% | 3.6% | - | - | 60.5% | 3.7% | 10.7% | 115.0x | $834M | VS | |
$TRIN Trinity Capital Inc. | 51 | 26 | 29 | 90 | 9.8x | 52.5x | 14.6% | 9.6% | - | - | 49.8% | 16.0% | 13.2% | 118.0x | $1.1B | VS | |
$CSWC CAPITAL SOUTHWEST CORP | 51 | 29 | 36 | 93 | 9.6x | 10.0x | 14.5% | 6.2% | - | - | 53.5% | 18.2% | 11.7% | 108.0x | $1.3B | VS | |
$ICMB Investcorp Credit Management BDC, Inc. | 50 | 26 | 26 | 86 | - | - | -22.2% | - | - | - | -49.4% | -76.3% | 23.4% | 177.0x | $38M | VS | |
$FDUS FIDUS INVESTMENT Corp | 50 | 31 | 41 | 64 | 9.4x | 10.4x | 11.3% | 6.3% | - | - | 48.5% | 17.9% | 11.2% | 75.0x | $717M | VS | |
$GAIN GLADSTONE INVESTMENT CORPORATION\DE | 49 | 30 | 27 | 90 | - | - | 9.5% | 23.6% | - | - | 423.3% | 3.9% | 10.8% | 96.0x | $551M | VS | |
$BCSF Bain Capital Specialty Finance, Inc. | 42 | 26 | 37 | 54 | 8.4x | 22.8x | 9.2% | 3.8% | 0.0% | 79.5% | 79.5% | -12.4% | 16.5% | 133.0x | $886M | ||
| SECTOR BENCH | - | - | - | - | - | 9.8x | 9.5x | 6.8% | 3.5% | 100.0% | 54.7% | 49.2% | -14.5% | 13.3% | 1.2x | - | REF |
Bain Capital Specialty Finance, Inc. (BCSF) receives a "Reduce" rating with a composite score of 42.3/100. It ranks #3226 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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In-line with peers — no strong momentum signal
Fair valuation relative to peers
Weak fundamentals — higher risk of value trap
Average volatility — neutral timing signal
Moderate investment profile
Mid-range overall rating
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Relative valuation derived from Financial sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for BCSF.
View All Ratings| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 26 | 19 | +7ALPHA |
| MOMENTUM | 54 | 62 | -8DRAG |
| VALUATION | 37 | 41 | -4NEUTRAL |
| INVESTMENT | 36 | 73 | -37DRAG |
| STABILITY | 41 | 30 | +11ALPHA |
| SHORT INT | 73 | 86 | -13DRAG |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC 1.0% vs WACC 4.3% (spread -3.3%)
GM 0% vs sector 100%, OM 79% vs sector 55%
Capital turnover 0.02x
Rev growth -12%, 4yr history
Interest coverage 0.9x, Net debt/EBITDA 77.8x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
We rate Bain Capital Specialty Finance, Inc. (BCSF) as a Reduce with a composite score of 42.3/100 at a current price of $13.15. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential.
Bain Capital Specialty Finance, Inc. holds an above-average position (#19 of 38) within the Financial sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 42.3/100 places it at rank #3226 in our full universe.
No Moat
High
Standard
Fair Value
Stable competitive position in a defensive sector.
Leverage of 133% D/E amplifies downside risk.
Below-average quality raises earnings sustainability concerns.
Vulnerability to macroeconomic shocks and interest rate volatility.
Bain Capital Specialty Finance, Inc. represents a reduce based on multi-factor quantitative performance.
Bain Capital Specialty Finance, Inc. receives a Reduce rating from our analysis, with a composite score of 42.3/100 and 2 out of 5 stars, ranking #3226 out of 7,333 stocks. BCSF's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
BCSF's quality score of 26/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of 9.2% (sector avg: 6.8%), gross margins of 0.0% (sector avg: 100.0%), net margins of 79.5% (sector avg: 49.2%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
With a value score of 37/100, BCSF appears somewhat expensive relative to its fundamentals. Key valuation metrics include a P/E ratio of 8.41x, an EV/EBITDA of 22.79x, a P/B ratio of 0.78x. Investors paying a premium here are likely betting on above-average growth or margin expansion to justify current prices.
Bain Capital Specialty Finance, Inc.'s investment score of 36/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of -12.4% vs. a sector average of -14.5% and a return on assets of 3.8% (sector: 3.5%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
BCSF demonstrates moderate momentum with a score of 54/100, suggesting a neutral price trend without strong directional conviction. Revenue growth stands at -12.4% year-over-year, while a beta of 0.78 reflects its sensitivity to broader market moves. Moderate momentum may indicate the stock is consolidating or transitioning between trends, warranting close monitoring of upcoming catalysts.
BCSF's stability score of 41/100 signals elevated volatility and/or leverage concerns. Key stability metrics include a beta of 0.78 and a debt-to-equity ratio of 133.00x (sector avg: 1.2x). Investors should be prepared for wider-than-average price swings and consider position sizing accordingly to manage portfolio risk.
BCSF carries a short interest score of 73/100, indicating moderate short selling activity. This is a neutral reading — not enough to signal systemic bearishness, but worth monitoring. Specific risk factors include elevated leverage (D/E: 133.00x), small-cap liquidity risk. At $886M market cap (small-cap), Bain Capital Specialty Finance, Inc. offers reasonable institutional liquidity.
Bain Capital Specialty Finance, Inc. offers an attractive dividend yield of 16.5%, placing it among the higher-yielding stocks in its peer group. This compares to a sector average dividend yield of 13.3%. A yield this high can provide meaningful income, but investors should verify the payout is sustainable by examining the payout ratio, free cash flow coverage, and any history of dividend cuts.
Bain Capital Specialty Finance, Inc. is a small-cap company in the Financial sector, ranked #19 of 38 in its sector (50th percentile) and #3226 of 7,333 overall (56th percentile). Key comparisons include ROE of 9.2% exceeding the 6.8% sector median and operating margins of 79.5% above the 54.7% sector average. This above-median position indicates BCSF is outperforming a majority of its Financial peers, though there is room to close the gap with sector leaders.
While BCSF currently exhibits a REDUCE profile, superior opportunities exist within the FINANCIAL sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
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Improvement in Quality (26) would have the largest impact on the composite score.
RANK #19 OF 38 IN FINANCIALS
EV/EBITDA 139% ABOVE SECTOR MEDIAN
ROE 36% ABOVE SECTOR MEDIAN (FAVORABLE)
Gross Margin 100% BELOW SECTOR MEDIAN
Bain Capital has agreed to acquire a majority stake in Echo Marketing, the parent company of South Korean activewear brand Andar, for approximately $344 million. This deal involves the U.S.-based investment firm purchasing a 43.66% stake from the founder. The acquisition expands Bain Capital's portfolio and presence in the athleisure market.
Above 50MA
37.18%
Net New Highs
+51081
