Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Oaktree Specialty Lending (NASDAQ:OCSL) and the best and worst performers in the specialty finance industry.
Specialty finance companies provide targeted lending or financial services for specific industries or needs. They benefit from expertise in particular sectors, often reduced competition in specialized niches, and tailored underwriting that can yield higher margins. Challenges include concentration risk in specific industries, difficulty achieving scale efficiencies, and potential vulnerability during sector-specific downturns affecting their specialized markets.
The 10 specialty finance stocks we track reported a mixed Q3. As a group, revenues missed analysts’ consensus estimates by 5.8%.
Thankfully, share prices of the companies have been resilient as they are up 9.6% on average since the latest earnings results.
Oaktree Specialty Lending (NASDAQ:OCSL)
Managed by Oaktree Capital Management, one of the world's premier alternative investment firms, Oaktree Specialty Lending (NASDAQ:OCSL) is a business development company that provides customized financing solutions to mid-market companies across various industries.
Oaktree Specialty Lending reported revenues of $77.32 million, down 18.3% year on year. This print exceeded analysts’ expectations by 1.1%. Overall, it was a satisfactory quarter for the company with a narrow beat of analysts’ revenue estimates but a slight miss of analysts’ AUM estimates.
“Our fourth quarter results demonstrate progress in stabilizing the investment portfolio despite an uneven market environment, and we fully covered our quarterly dividend with net investment income,” said Armen Panossian, Chief Executive Officer and Chief Investment Officer of Oaktree Specialty Lending.
The stock is down 3.7% since reporting and currently trades at $12.84.
Is now the time to buy Oaktree Specialty Lending? Access our full analysis of the earnings results here, it’s free.
Best Q3: Encore Capital Group (NASDAQ:ECPG)
Operating in the often misunderstood world of debt collection since 1999, Encore Capital Group (NASDAQ:ECPG) purchases portfolios of defaulted consumer debt at deep discounts and works with individuals to recover these obligations while helping them toward financial recovery.
Encore Capital Group reported revenues of $460.4 million, up 25.4% year on year, outperforming analysts’ expectations by 11.9%. The business had an incredible quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.
The market seems happy with the results as the stock is up 31.7% since reporting. It currently trades at $56.29.
Is now the time to buy Encore Capital Group? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: DigitalBridge (NYSE:DBRG)
Transforming from a traditional real estate investor to a digital-focused powerhouse in 2021, DigitalBridge Group (NYSE:DBRG) is a global digital infrastructure investment firm that manages capital and operates assets across data centers, cell towers, fiber networks, and edge infrastructure.
DigitalBridge reported revenues of $3.82 million, down 95% year on year, falling short of analysts’ expectations by 96.2%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ revenue estimates.
DigitalBridge delivered the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 20.7% since the results and currently trades at $15.33.
Read our full analysis of DigitalBridge’s results here.
PROG (NYSE:PRG)
Evolving from its origins as Aaron's, Inc. before rebranding in 2020, PROG Holdings (NYSE:PRG) provides alternative payment solutions including lease-to-own options and second-look credit products for consumers who may not qualify for traditional financing.
PROG reported revenues of $595.1 million, down 1.8% year on year. This result surpassed analysts’ expectations by 1.5%. It was a strong quarter as it also recorded a beat of analysts’ EPS and EBITDA estimates.
The stock is down 6.1% since reporting and currently trades at $30.74.
Read our full, actionable report on PROG here, it’s free.
Sixth Street Specialty Lending (NYSE:TSLX)
Originally launched as TPG Specialty Lending before rebranding in 2020, Sixth Street Specialty Lending (NYSE:TSLX) is a business development company that provides customized financing solutions to middle-market companies across various industries.
Sixth Street Specialty Lending reported revenues of $109.4 million, down 8.2% year on year. This number missed analysts’ expectations by 30.5%. It was a disappointing quarter as it also recorded a significant miss of analysts’ revenue estimates and a significant miss of analysts’ EPS estimates.
The stock is down 1.1% since reporting and currently trades at $22.07.
Read our full, actionable report on Sixth Street Specialty Lending here, it’s free.
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