RWAY

Runway Growth is an externally managed BDC (adviser Runway Growth Capital LLC) whose headline appeal is valuation: $485M of equity across 36.1M shares implies book value near $13.4/share against a $5.49 price — roughly 0.4x book — with a P/E of just 5.9 on FY2025 diluted EPS of $0.93. Leverage is conservative for the sector (liabilities/equity 0.98x, long-term debt down 21% to $435M) and operating cash flow of $186M is robust. On the numbers alone, the stock is cheap and the balance sheet is not stretched.

But the fundamental trend is clearly deteriorating and that is why the discount exists. FY2025 net income fell 53.7% to $34.0M and diluted EPS dropped 50.8% to $0.93, reversing the FY2024 peak ($73.6M). ROE is a modest 7.0%. Dividends paid ($51.4M, ~$1.42/share) exceeded GAAP net income ($34.0M), and retained earnings sit at -$49.9M — a payout that is not covered by reported earnings and depends on net investment income and capital discipline holding up. Cash on hand is thin at $18.2M despite the strong operating cash flow.