Clear Street initiates Blue Owl Technology Finance stock with Hold rating

Investing.com - Clear Street initiated coverage on Blue Owl Technology Finance Corp. (NYSE:OTF) with a Hold rating and a $15.00 price target on Thursday. The stock, currently trading at $14.63, sits near its 52-week low of $14.33, while maintaining a modest P/E ratio of 8.28x. According to InvestingPro analysis, the stock appears fairly valued based on its comprehensive Fair Value model.

The research firm identified OTF as the largest technology-focused Business Development Company (BDC), providing investors access to upper middle market, sponsor-backed software companies with defensive, recurring revenues. With a market capitalization of $6.85 billion and impressive revenue growth of 20.4% in the last twelve months, OTF has established a significant presence in the market. InvestingPro subscribers can access additional insights through the comprehensive Pro Research Report, which provides deep-dive analysis of OTF’s market position and growth metrics.

Clear Street noted that OTF’s $12.7 billion portfolio is highly diversified with "exceptional credit quality supported by Blue Owl’s scale and disciplined underwriting."

The firm highlighted that OTF enhances income through selective annual recurring revenue loans, PIK structures, and preferred equity while maintaining structural protections.

Despite strong fundamentals, Clear Street indicated that near-term upside is constrained by under-leverage, limited float, and shareholder lock-up expirations, while management plans to increase leverage toward 0.9x-1.25x to potentially lift Return on Equity toward 10%.

In other recent news, Blue Owl Technology Finance Corp. reported its second-quarter 2025 earnings, revealing an earnings per share (EPS) of $0.45, which exceeded the analysts’ estimate of $0.35. The company also announced revenue of $319.47 million for the quarter. Despite surpassing earnings expectations, the stock price showed a minor decline in after-hours trading. Additionally, Blue Owl Technology Finance disclosed plans to release approximately 10% of each shareholder’s locked-up common stock earlier than planned. This early release will make 46,513,271 shares freely tradeable on September 9, 2025. The remaining locked shares will follow a phased release schedule, with subsequent releases in December 2025, March 2026, and June 2026. These developments provide investors with key insights into the company’s recent performance and strategic decisions.

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