BTIG Reiterates Buy Rating on Shutter Rock Capital Corp. (SSSS)

BTIG analyst Marvin Fong reiterated a Buy rating and $7.00 price target on Shutter Rock Capital Corp. (NASDAQ: SSSS).

The analyst comments "SuRo reported NAV/share of $6.68 to end 4Q24, slightly below the mid-point of the preliminary range of $6.50-$7.00/share and down 1% vs. 3Q24's NAV/share of $6.73. We're not bothered by the sequential decline as we view the year-end NAV for SuRo as stale given there have been several positive developments within SuRo's book since the start of the year, most notably CoreWeave (Private) filing to go public earlier this month. In recent days, CoreWeave also announced that OpenAI (Private) – which happens to be another major SuRo investment – has agreed to purchase $11.9B of services from CoreWeave over the next five years. While the terms of CoreWeave's IPO have yet to be set, it has been reported that CoreWeave is targeting a >$35B valuation, which compares to SuRo's cost basis that we estimate is ~$20B. We enumerated other positive developments in SuRo's portfolio last week in our NDR takeaways (note here). Other items we learned from SuRo's 4Q24 report is that Learneo (Private) was marked down ~19% vs. 3Q24, no surprise given the performance of other edtech stocks. Based on Learneo's significant cash balance, we estimate its enterprise value was marked down closer to 60% and the remaining risk to SuRo's NAV is less than $0.10/share due to cash being in excess of SuRo's liquidation preference. Thus, even as edtech stocks have declined further YTD, we don't expect Learneo to be much of a drag on NAV/share going forward. Blink Health (Private) was marked down 13% q/q while WHOOP (Private) was marked up 8% q/q and is now SuRo's fifth largest portfolio holding. Overall, while SuRo's release had a few nuggets, we believe the focus should be on the next 6-9 months. Not only should CoreWeave begin trading, but OpenAI is reportedly looking to close a new round of funding and, by year-end, one or more of SuRo's other portfolio holdings may become publicly listed, as management cited was a possibility on the call. Despite the turbulence of the past few weeks, we still believe SSSS shares are undervalued as the stock price sits at a 21% discount to 4Q24's stale NAV. Maintain BUY. "

For an analyst ratings summary and ratings history on Shutter Rock Capital Corp. click here. For more ratings news on Shutter Rock Capital Corp. click here.

Shares of Shutter Rock Capital Corp. closed at $5.27 yesterday.

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