Head to Head Review: Morgan Stanley Direct Lending (NYSE:MSDL) vs. Gores Holdings IX (NASDAQ:GHIX)

Gores Holdings IX (NASDAQ:GHIX) and Morgan Stanley Direct Lending (NYSE:MSDL) are both small-cap unclassified companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings for Gores Holdings IX and Morgan Stanley Direct Lending, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gores Holdings IX	0	0	0	0	N/A
Morgan Stanley Direct Lending	0	4	2	0	2.33

Morgan Stanley Direct Lending has a consensus price target of $21.92, indicating a potential downside of 1.41%. Given Morgan Stanley Direct Lending’s higher possible upside, analysts clearly believe Morgan Stanley Direct Lending is more favorable than Gores Holdings IX.

Insider & Institutional Ownership

75.1% of Gores Holdings IX shares are owned by institutional investors. 20.0% of Gores Holdings IX shares are owned by company insiders. Comparatively, 0.2% of Morgan Stanley Direct Lending shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Gores Holdings IX and Morgan Stanley Direct Lending’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gores Holdings IX	N/A	N/A	$23.25 million	N/A	N/A
Morgan Stanley Direct Lending	$367.74 million	5.40	$231.01 million	$3.10	7.17

Morgan Stanley Direct Lending has higher revenue and earnings than Gores Holdings IX.

Profitability

This table compares Gores Holdings IX and Morgan Stanley Direct Lending’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gores Holdings IX	N/A	-59.88%	3.41%
Morgan Stanley Direct Lending	62.34%	12.87%	6.39%

Summary

Morgan Stanley Direct Lending beats Gores Holdings IX on 7 of the 9 factors compared between the two stocks.

About Gores Holdings IX

Gores Holdings IX, Inc. does not have significant operations. It intends to effect on a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses. The company was incorporated in 2021 and is based in Boulder, Colorado.

About Morgan Stanley Direct Lending

Morgan Stanley Direct Lending Fund is a business development company. It is a non-diversified, externally managed specialty finance company focused on lending to middle-market companies. Morgan Stanley Direct Lending Fund is based in NEW YORK.