Monroe Capital Falls Short of NII Expectations in Q2

Monroe Capital's Q2 NII of $0.15 per share missed expectations by $0.07. Total investment income fell 15.2% Q/Q to $9.87M, missing estimates by $2.44M. The company's NAV stood at $179.6 million, or $8.29 per share.

Monroe Capital (NASDAQ: MRCC) reported its Q2 net investment income (NII) of $0.15 per share, falling short of expectations by $0.07. The total investment income for the quarter was $9.87 million, a 15.2% decrease quarter-over-quarter, missing estimates by $2.44 million. The company's net asset value (NAV) stood at $179.6 million, or $8.29 per share [1][2].

The Q2 results were driven by a decrease in net investment income due to lower average invested assets and effective rates. Additionally, the NAV fell due to net unrealized losses and dividends exceeding net investment income. Monroe Capital also reported a reduction in debt-to-equity leverage, with proceeds from sales and paydowns reducing the revolving credit facility balance [2].

The company announced a merger with Horizon Technology Finance (HRZN), pending approvals. Monroe Capital expects the merger to unlock shareholder value through synergies and operating leverage benefits. The company anticipates a long-term upside from HRZN merger participation [2].

Analysts remain cautiously optimistic, with an average rating of "buy" and a median 12-month price target of $8.25, about 17% above its August 8 closing price of $6.85. The stock recently traded at 9 times the next 12-month earnings compared to a P/E of 7 three months ago [2].

References:
[1] https://seekingalpha.com/news/4483494-monroe-capital-nii-of-015-misses-by-007
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_PLXD5548D:0-monroe-capital-q2-net-investment-income-falls-to-3-3-mln/