FDUS

We rate FIDUS INVESTMENT Corp (FDUS) as a Hold with a composite score of 50.1/100 at a current price of $18.30. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in stability (78th percentile) and momentum (64th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (27th percentile) and quality (31th percentile) tempers our overall conviction. We assign a No Moat rating (21/100), Low uncertainty, and Standard capital allocation.

Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

FIDUS INVESTMENT Corp holds a top-quartile position (#9 of 38) within the Financial sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 50.1/100 places it at rank #1994 in our full 7,333-stock universe. At $717M in market capitalization, FIDUS INVESTMENT Corp is a small-cap player in the Financial space, which limits certain scale advantages but may allow for more agile strategic execution.

The near-term outlook is constructive, with revenue growing at 18% and momentum in the 64th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 27th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 0% (-100.0pp vs sector) narrow to operating margins of 0% (-59.1pp vs sector) and net margins of 49.0%, yielding a gross-to-net conversion rate of N/A%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $18.30, FIDUS INVESTMENT Corp is trading near fair value based on current fundamentals. Our value factor score of 41/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 8.3x (roughly in line with the sector median of 9.8x), EV/EBITDA of 10.4x (near the sector median), P/B of 0.9x, P/S of 4.5x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Low uncertainty rating to FIDUS INVESTMENT Corp. The company exhibits strong financial stability with a beta of 0.69, and a stability factor in the 78th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

Specific risk factors that inform our assessment include: weak quality scores (31th percentile); low beta of 0.69 — while defensive, this may indicate limited upside participation in bull markets. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 78th percentile and quality factor at the 31th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: above-average stability (78th percentile) suggests predictable business dynamics; a 11.15% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate FIDUS INVESTMENT Corp's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 11.3%, and the balance sheet is managed within acceptable parameters (D/E: 76%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; FIDUS INVESTMENT Corp falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 11.15% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, FIDUS INVESTMENT Corp receives a Hold rating with a composite score of 50.1/100 (rank #1994 of 7,333). Our quantitative framework assigns a No Moat (21/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 48/100.

Our analysis supports a neutral stance on FIDUS INVESTMENT Corp. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.