It has been about a month since the last earnings report for Owl Rock Capital Corporation . Shares have lost about 10.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Owl Rock Capital Corporation due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Owl Rock Capital Q4 Earnings Beat, Revenues Rise Y/Y
Owl Rock Capital reported fourth-quarter 2022 earnings per share of 41 cents, which beat the Zacks Consensus Estimate by a penny. The bottom line also improved from 35 cents a year ago.The results were supported by growth in the portfolio, increased interest rates and record net investment income. However, the positives were partially offset by higher costs.
The total investment income of ORCC amounted to $350.5 million, which climbed from $281.6 million a year ago.The top line beat the Zacks Consensus Estimate by 6.8%. ORCC achieved a record net investment income on the back of constant earnings momentum from high-interest rates.
Q4 Update
Net investment income rose to $162.4 million from $146.7 million a year ago.
Total new investment commitments were $211.2 million across six new portfolio companies and two existing ones. The metric plunged 86.7% year over year in the quarter under review.
Owl Rock Capital ended 2022 with investmentsin 184 portfolio companies, backed with an aggregate fair value of $13 billion. Based on the fair value, the average investment size in each portfolio company was $70.7 million as of Dec 31, 2022.
Total expenses escalated to $188.0 million in the fourth quarter from $143.8 million a year ago, primarily due to higher interest expenses, gross management and incentive fees.
The company recorded a net income of $191.8 million in the fourth quarter, up from $174 million in the prior-year quarter.
Financial Update (as of Dec 31, 2022)
Owl Rock Capital exited 2022 with cash and restricted cash of $455.1 million, which declined from $447.1 million as of Dec 31, 2021. Total assets of $13.5 billion rose from $13.3 billion at 2021-end.
Debt was $7.2 billion, up from $7.1 billion at 2021-end.ORCC had $1.4 billion of undrawn capacity under its credit facilities. It currently has no debt maturities until April 2024.
Net cash from operating activities in 2022 was $217.2 million compared with the prior-year’s cash usage of $1.2 billion.
At 2022-end, net debt to equity was 1.19X compared with 1.18x in the last quarter.
Dividend & Repurchase Update
The board of directors at Owl Rock Capital declared a first-quarter 2023 dividend of 33 cents per share to be paid out on or before Apr 14, 2023, to shareholders of record as of Mar 31, 2023. It also provided a fourth-quarter 2022 supplemental dividend of 4 cents per share.
ORCC brought in a share buyback program of $150 million on Nov 1, 2022, with a life span of 18 months. As of Feb 17, 2023, $52 million of ORCC stock was purchased, of which 67% was bought by ORCC at a price of $12.05 per share.
Full Year Highlights
Total Investment Income for 2022 was $1.2 billion up from 2021-end figure of $1 billion.
Earnings per share for 2022 was $1.18 up from the previous year figure of $1.59.
Total year expenses increased to $639.5 million in 2022 from $527.3 million in 2021-end.
Outlook
Most of Owl Rock Capital’s assets are floating, so an improving interest rate environment is projected to drive net investment income. Included in Investment Income are Pre-Payment fees, which are expected to increase as the interest rate stabilizes, thereby increasing repayments.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
Currently, Owl Rock Capital Corporation has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Owl Rock Capital Corporation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Owl Rock Capital Corporation (ORCC) Down 10.2% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Owl Rock Capital Corporation . Shares have lost about 10.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Owl Rock Capital Corporation due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Owl Rock Capital Q4 Earnings Beat, Revenues Rise Y/Y
Owl Rock Capital reported fourth-quarter 2022 earnings per share of 41 cents, which beat the Zacks Consensus Estimate by a penny. The bottom line also improved from 35 cents a year ago.The results were supported by growth in the portfolio, increased interest rates and record net investment income. However, the positives were partially offset by higher costs.
The total investment income of ORCC amounted to $350.5 million, which climbed from $281.6 million a year ago.The top line beat the Zacks Consensus Estimate by 6.8%. ORCC achieved a record net investment income on the back of constant earnings momentum from high-interest rates.
Q4 Update
Net investment income rose to $162.4 million from $146.7 million a year ago.
Total new investment commitments were $211.2 million across six new portfolio companies and two existing ones. The metric plunged 86.7% year over year in the quarter under review.
Owl Rock Capital ended 2022 with investmentsin 184 portfolio companies, backed with an aggregate fair value of $13 billion. Based on the fair value, the average investment size in each portfolio company was $70.7 million as of Dec 31, 2022.
Total expenses escalated to $188.0 million in the fourth quarter from $143.8 million a year ago, primarily due to higher interest expenses, gross management and incentive fees.
The company recorded a net income of $191.8 million in the fourth quarter, up from $174 million in the prior-year quarter.
Financial Update (as of Dec 31, 2022)
Owl Rock Capital exited 2022 with cash and restricted cash of $455.1 million, which declined from $447.1 million as of Dec 31, 2021. Total assets of $13.5 billion rose from $13.3 billion at 2021-end.
Debt was $7.2 billion, up from $7.1 billion at 2021-end.ORCC had $1.4 billion of undrawn capacity under its credit facilities. It currently has no debt maturities until April 2024.
Net cash from operating activities in 2022 was $217.2 million compared with the prior-year’s cash usage of $1.2 billion.
At 2022-end, net debt to equity was 1.19X compared with 1.18x in the last quarter.
Dividend & Repurchase Update
The board of directors at Owl Rock Capital declared a first-quarter 2023 dividend of 33 cents per share to be paid out on or before Apr 14, 2023, to shareholders of record as of Mar 31, 2023. It also provided a fourth-quarter 2022 supplemental dividend of 4 cents per share.
ORCC brought in a share buyback program of $150 million on Nov 1, 2022, with a life span of 18 months. As of Feb 17, 2023, $52 million of ORCC stock was purchased, of which 67% was bought by ORCC at a price of $12.05 per share.
Full Year Highlights
Total Investment Income for 2022 was $1.2 billion up from 2021-end figure of $1 billion.
Earnings per share for 2022 was $1.18 up from the previous year figure of $1.59.
Total year expenses increased to $639.5 million in 2022 from $527.3 million in 2021-end.
Outlook
Most of Owl Rock Capital’s assets are floating, so an improving interest rate environment is projected to drive net investment income. Included in Investment Income are Pre-Payment fees, which are expected to increase as the interest rate stabilizes, thereby increasing repayments.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
Currently, Owl Rock Capital Corporation has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Owl Rock Capital Corporation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.