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Owl Rock Capital Corporation (ORCC) Up 1.6% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Owl Rock Capital Corporation . Shares have added about 1.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Owl Rock Capital Corporation due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Owl Rock Capital's Q3 Earnings Beat Estimates
Owl Rock Capital reported third-quarter 2022 earnings per share of 37 cents, which beat the Zacks Consensus Estimate by 8.8%. The bottom line also improved from 33 cents a year ago.
The total investment income of ORCC amounted to $314.1 million, which climbed from $269.2 million a year ago. The figure also beat the consensus mark by 8.4%.
Q3 Update
Net investment income rose to $146.8 million from $130.5 million a year ago.
Total new investment commitments were $427.4 million across 13 new portfolio companies and the seven existing ones. The metric plunged 84.7% year over year in the quarter under review.
Owl Rock Capital ended the third quarter with investments in 180 portfolio companies, backed with an aggregate fair value of $12.8 billion. Based on the fair value, the average investment size in each portfolio company was $71.3 million as of Sep 30, 2022.
Total expenses escalated to $165.7 million in the third quarter from $137 million a year ago, primarily due to higher interest expenses and incentive fees.
It recorded a net income of $265.4 million in the third quarter, up from $142.9 million in the prior-year quarter.
Financial Update (as of Sep 30, 2022)
Owl Rock Capital exited the third quarter with cash and restricted cash of $455.2 million, which declined from $447.1 million as of Dec 31, 2021. Total assets of $13.4 billion rose from $13.3 billion at 2021-end.
Debt was at $7.2 billion, up from $7.1 billion at 2021-end. ORCC had $1.7 billion of undrawn capacity under its credit facilities. It currently has no debt maturities until April 2024.
Net cash from operating activities during the first nine months was $122.5 million compared with the prior-year quarter’s cash usage of $854.7 million.
At the third-quarter end, net debt to equity was at 1.18X.
Dividend & Repurchase Update
The board of directors at Owl Rock Capital approved a fourth-quarter dividend of 33 cents per share, up sequentially by 2 cents, to be paid out on or before Jan 13, 2023, to shareholders of record as of Dec 30, 2022. It also provided a third-quarter supplemental dividend of 3 cents per share.
ORCC brought in a share buyback program of $150 million on Nov 1, 2022, with a life span of 18 months.
Outlook
As most of Owl Rock Capital’s assets are floating in nature, an improving interest rate environment is projected to drive net investment income moving forward. The volatile market conditions are also expected to provide ORCC with direct lending opportunities. The company expects fourth-quarter net investment income to be at least 39 cents per share, up from 35 cents a year ago.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 9.79% due to these changes.
VGM Scores
At this time, Owl Rock Capital Corporation has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Owl Rock Capital Corporation has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Owl Rock Capital Corporation belongs to the Zacks Financial - Miscellaneous Services industry. Another stock from the same industry, Synchrony (SYF - Free Report) , has gained 5.6% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
Synchrony reported revenues of $3.93 billion in the last reported quarter, representing a year-over-year change of +7.4%. EPS of $1.47 for the same period compares with $1.67 a year ago.
For the current quarter, Synchrony is expected to post earnings of $1.09 per share, indicating a change of -26.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -3.2% over the last 30 days.
Synchrony has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Owl Rock Capital Corporation (ORCC) Up 1.6% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Owl Rock Capital Corporation . Shares have added about 1.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Owl Rock Capital Corporation due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Owl Rock Capital's Q3 Earnings Beat Estimates
Owl Rock Capital reported third-quarter 2022 earnings per share of 37 cents, which beat the Zacks Consensus Estimate by 8.8%. The bottom line also improved from 33 cents a year ago.
The total investment income of ORCC amounted to $314.1 million, which climbed from $269.2 million a year ago. The figure also beat the consensus mark by 8.4%.
Q3 Update
Net investment income rose to $146.8 million from $130.5 million a year ago.
Total new investment commitments were $427.4 million across 13 new portfolio companies and the seven existing ones. The metric plunged 84.7% year over year in the quarter under review.
Owl Rock Capital ended the third quarter with investments in 180 portfolio companies, backed with an aggregate fair value of $12.8 billion. Based on the fair value, the average investment size in each portfolio company was $71.3 million as of Sep 30, 2022.
Total expenses escalated to $165.7 million in the third quarter from $137 million a year ago, primarily due to higher interest expenses and incentive fees.
It recorded a net income of $265.4 million in the third quarter, up from $142.9 million in the prior-year quarter.
Financial Update (as of Sep 30, 2022)
Owl Rock Capital exited the third quarter with cash and restricted cash of $455.2 million, which declined from $447.1 million as of Dec 31, 2021. Total assets of $13.4 billion rose from $13.3 billion at 2021-end.
Debt was at $7.2 billion, up from $7.1 billion at 2021-end. ORCC had $1.7 billion of undrawn capacity under its credit facilities. It currently has no debt maturities until April 2024.
Net cash from operating activities during the first nine months was $122.5 million compared with the prior-year quarter’s cash usage of $854.7 million.
At the third-quarter end, net debt to equity was at 1.18X.
Dividend & Repurchase Update
The board of directors at Owl Rock Capital approved a fourth-quarter dividend of 33 cents per share, up sequentially by 2 cents, to be paid out on or before Jan 13, 2023, to shareholders of record as of Dec 30, 2022. It also provided a third-quarter supplemental dividend of 3 cents per share.
ORCC brought in a share buyback program of $150 million on Nov 1, 2022, with a life span of 18 months.
Outlook
As most of Owl Rock Capital’s assets are floating in nature, an improving interest rate environment is projected to drive net investment income moving forward. The volatile market conditions are also expected to provide ORCC with direct lending opportunities. The company expects fourth-quarter net investment income to be at least 39 cents per share, up from 35 cents a year ago.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 9.79% due to these changes.
VGM Scores
At this time, Owl Rock Capital Corporation has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Owl Rock Capital Corporation has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Owl Rock Capital Corporation belongs to the Zacks Financial - Miscellaneous Services industry. Another stock from the same industry, Synchrony (SYF - Free Report) , has gained 5.6% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
Synchrony reported revenues of $3.93 billion in the last reported quarter, representing a year-over-year change of +7.4%. EPS of $1.47 for the same period compares with $1.67 a year ago.
For the current quarter, Synchrony is expected to post earnings of $1.09 per share, indicating a change of -26.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -3.2% over the last 30 days.
Synchrony has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.