Stock fact sheet · data as of
Morgan Stanley Direct Lending Fund (MSDL): fair value, margin of safety and Wheel Score
Financial Services · Financial - Conglomerates · United States · High Growth
Is MSDL undervalued?
MSDL has a margin of safety of 71%: the stock closed at 13.29 on 16 Oct 2026 against a GLS average fair value of 46.35. 6 of the 9 valuation models that produced a number sit above the price. Our screens treat a discount this large as a strong starting point for a cash-secured put, not as a verdict - the fair value is a model output, and a wide gap can mean the models are missing something the market knows.
The 9 models disagree widely: Lynch gives 2.82 while DCF gives 170.32. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.
The nightly engine files MSDL under High Growth: revenue and earnings growing fast enough that the growth-based models carry the valuation.
Nine valuation models for MSDL
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 170.32 | +1182% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 17.56 | +32% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 11.37 | -14% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 2.82 | -79% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 43.16 | +225% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 67.04 | +404% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 69.78 | +425% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 27.22 | +105% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 7.83 | -41% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -24.54 | -285% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 15.00 | +13% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
On financial health MSDL scores 8/9 (Piotroski): most of the nine tests - positive earnings and cash flow, falling debt, rising margins and turnover - are passed, which is the kind of balance sheet a wheel trader is happy to be assigned. The GLS Moat score is 5.5 out of 10: a ten-year record that is consistent in some of the metrics the score tracks (revenue, earnings, margins, cash flow, returns on capital) and patchy in others.
Returns on capital are thin or negative - ROIC 3.2%, ROE 7.0%, ROA 3.1% - with debt at 1.19 times equity and a free-cash-flow yield of 25.3%.
The dividend yield is high at 13.92% (payout ratio 282%) - a payout above 100% of earnings, which is not covered by profits. A yield this size is often the market's way of pricing a risk to the payout, so the health score and cash flow matter more than usual.
Institutional ownership scores 6/10, insider activity 10/10 and Congressional trading 5/10 on the GLS smart-money scales.
| Piotroski F-score | 8 / 9 | ROIC | 3.2% |
|---|---|---|---|
| GLS Moat | 5.5 / 10 | ROE | 7.0% |
| Debt / equity | 1.19 | ROA | 3.1% |
| Free-cash-flow yield | 25.3% | Payout ratio | 282% |
| Institutions | 6 / 10 | Insiders · Congress | 10 · 5 / 10 |
Wheel Score 82: Prime
MSDL scores 82 out of 100 on the Wheel Score, in the Prime band (80 and above), which fewer than one stock in twenty reaches on any night. The score blends five things a wheel trader checks before selling a cash-secured put: the margin of safety (Value, 25/25), Piotroski health (18/20), the GLS moat (8/15), the option premium on offer (18/20) and how easily the stock trades (12/20).
Implied volatility is 33% on the near-the-money contracts 20-60 days out: some premium, but under the 35-60% range the Wheel Score pays full marks for (18 of 20 points). Chain open interest is 12,751 contracts across all expiries - enough for the wheel at normal size.
Volume runs at 448k shares a day on a market cap of $1.1B, with a beta of 0.68 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 12 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 25 / 25 | 71% margin of safety | |
| Health | 18 / 20 | Piotroski 8/9 | |
| Moat | 8 / 15 | moat 5.5/10 | |
| Premium | 18 / 20 | implied volatility 33% | |
| Stability | 12 / 20 | 448k shares/day, $1.1B cap, beta 0.68 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
The next earnings report is due on 5 Nov 2026 (after the close), 20 days away; a 30-45-day put sold today would expire after it, which is worth weighing against the premium.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
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| DRDB Roman DBDR Acquisition Corp. II | 10.74 | 8.84 | -21% | 21No options | $247M |
| SAAQ Space Asset Acquisition Corp. Class A Ordinary Shares | 10.07 | 1,034.88 | +99% | 32No options | $238M |
| ILLU Illumination Acquisition Corp I Class A Ordinary Shares | 9.99 | 1.47 | -581% | 6No options | $236M |
| VII Viking Acquisition Corp. II | 9.82 | - | - | 19No options | $232M |
| HCAC Hall Chadwick Acquisition Corp. | 10.13 | 1.29 | -686% | 6No options | $216M |
| VNME Vendome Acquisition Corporation I | 10.34 | 1.13 | -815% | 6No options | $207M |
| JONE Jones Ventures Intl Acquisition1 | 9.81 | 695.10 | +99% | 39No options | $206M |
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Start free See the Sunday ScanQuestions about MSDL
Is MSDL undervalued right now?
By the GLS models, yes: at 13.29 the stock is 71% below the average fair value of 46.35 (data as of 16 Oct 2026). Whether the discount is deserved is the question to research next.
What is the Wheel Score of MSDL and what does it mean?
MSDL scores 82 out of 100 (Prime). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for MSDL?
46.35 per share as of 16 Oct 2026 - the simple average of the 9 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Morgan Stanley Direct Lending Fund report earnings next?
The next earnings report is due on 5 Nov 2026 (after the close), 20 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does MSDL have listed options, and how liquid are they?
Yes. The nightly snapshot found 206 listed contracts with 12,751 open interest across all expiries and implied volatility of 33% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.