Chicago Atlantic BDC Inc. Common Stock (LIEN)

FairStock Score: 80/100 — HIGH CONVICTION

Key Financials

Strengths

• Generates $30 million in annual free cash flow (13.7% yield on market cap)
• Solid return on equity of 11.0% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.08, providing financial flexibility
• Healthy net profit margin of 15.2% showing consistent profitability
• Attractive 14.3% dividend yield providing steady income returns

Concerns

• Weak Piotroski F-Score of 2/9 suggests deteriorating financial quality across multiple dimensions

AI Analysis

Chicago Atlantic BDC Inc. Common Stock is a micro-cap financial services company valued at $217 million. The business generates $54 million in annual revenue with a 15.2% net margin and $30 million in free cash flow. From a quality standpoint, Chicago shows weak Piotroski F-Score of 2/9 signaling deteriorating fundamentals and healthy Altman Z-Score of 3.4. On valuation, the stock is deeply undervalued on a P/E basis at 6.5x, with offers a 54% margin of safety vs Graham Number of $21. Growth dynamics show revenue growing at 6.8% and profit growth of 3.4%. The 14.3% dividend yield adds an income component for patient holders. Our composite FairStock Score of 80/100 reflects strong fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $30 million in annual free cash flow (13.7% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the financial services space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer