GSBD

We rate Goldman Sachs BDC, Inc. (GSBD) as a Reduce with a composite score of 41.8/100 at a current price of $9.16. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in stability (73th percentile) and investment (48th percentile), which together account for the majority of the composite score. Offsetting weakness in value (29th percentile) and momentum (34th percentile) tempers our overall conviction. We assign a No Moat rating (28/100), Medium uncertainty, and Standard capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs; balance sheet deleveraging progress; valuation compression risk if growth disappoints. 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.

Goldman Sachs BDC, Inc. holds a mid-tier position (#21 of 38) within the Financial sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 41.8/100 places it at rank #3304 in our full 7,333-stock universe. At $1.2B in market capitalization, Goldman Sachs BDC, Inc. is a small-cap player in the Financial space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue contraction of -32% combined with momentum at the 34th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.

The margin cascade tells an important story: gross margins of 100% (0.0pp vs sector) narrow to operating margins of 11% (-47.9pp vs sector) and net margins of 65.2%, yielding a gross-to-net conversion rate of 65%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $9.16, Goldman Sachs BDC, Inc. is trading at a premium to fundamental value. Our value factor score of 29/100 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. The premium valuation implies the market is pricing in significant future growth or quality improvements that are not yet fully reflected in current fundamentals.

The stock currently trades at a P/E of 7.8x (a 21% discount to the sector median of 9.8x), EV/EBITDA of 96.5x (at a premium), P/B of 0.7x, P/S of 5.0x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Medium uncertainty rating to Goldman Sachs BDC, Inc.. The stock presents a balanced risk profile: significant leverage (127% debt-to-equity) and low beta of 0.64 — while defensive, this may indicate limited upside participation in bull markets. While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: significant leverage (127% debt-to-equity); low beta of 0.64 — 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 73th percentile and quality factor at the 35th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 100% provide a buffer against cost pressures; above-average stability (73th percentile) suggests predictable business dynamics; a 19.37% 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 Goldman Sachs BDC, Inc.'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 9.1%, and the balance sheet is managed within acceptable parameters (D/E: 127%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; Goldman Sachs BDC, Inc. falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 19.37% 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, Goldman Sachs BDC, Inc. receives a Reduce rating with a composite score of 41.8/100 (rank #3304 of 7,333). Our quantitative framework assigns a No Moat (28/100, trend: stable), Medium uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 44/100.

Our analysis does not support a constructive view on Goldman Sachs BDC, Inc. at this time. The combination of limited competitive advantages, medium uncertainty, and standard capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.