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We rate SURO CAPITAL CORP. (SSSS) as a Reduce with a composite score of 44.2/100 at a current price of $9.18. 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 momentum (93th percentile) and quality (30th percentile), which together account for the majority of the composite score. Offsetting weakness in stability (10th percentile) and value (13th percentile) tempers our overall conviction. We assign a No Moat rating (24/100), High uncertainty, and Standard capital allocation.

Key items to watch: whether strong momentum is fundamentally supported by revenue trends; the path to profitability; 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.

SURO CAPITAL CORP. holds an above-average position (#13 of 38) within the Financial sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 44.2/100 places it at rank #2925 in our full 7,333-stock universe. At $215M in market capitalization, SURO CAPITAL CORP. is a small-cap player in the Financial space, which limits certain scale advantages but may allow for more agile strategic execution.

Despite positive momentum (93th percentile), revenue contraction of -48% creates a divergence between price action and fundamental trajectory. This divergence suggests either that the market is looking through near-term weakness or that technical factors are temporarily inflating the stock. Investors should assess whether the revenue decline reflects cyclical weakness or structural challenges.

The margin cascade tells an important story: gross margins of 0% (-100.0pp vs sector) narrow to operating margins of 100% (+40.9pp vs sector) and net margins of -752.0%, 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 $9.18, SURO CAPITAL CORP. is trading at a premium to fundamental value. Our value factor score of 13/100 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 3.6x (a 63% discount to the sector median of 9.8x), P/B of 1.0x, P/S of 117.0x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a High uncertainty rating to SURO CAPITAL CORP.. Key risk factors include current negative profitability (net margin -752.0%), below-average price stability (10th percentile), weak quality scores (30th percentile). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: current negative profitability (net margin -752.0%); below-average price stability (10th percentile); weak quality scores (30th percentile). 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 10th percentile and quality factor at the 30th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: a 2.78% 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 warrants caution and disciplined position management.

We rate SURO CAPITAL CORP.'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 27.4%, and the balance sheet is managed within acceptable parameters (D/E: 33%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; SURO CAPITAL CORP. falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 2.78% 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, SURO CAPITAL CORP. receives a Reduce rating with a composite score of 44.2/100 (rank #2925 of 7,333). Our quantitative framework assigns a No Moat (24/100, trend: stable), High uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 34/100.

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