Analyzing Perception Capital Corp. III (NASDAQ:PFTA) & Morgan Stanley Direct Lending (NYSE:MSDL)

Perception Capital Corp. III (NASDAQ:PFTA) 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 earnings, profitability, risk, analyst recommendations, dividends, institutional ownership and valuation.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Perception Capital Corp. III and Morgan Stanley Direct Lending, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Perception Capital Corp. III	0	0	0	0	N/A
Morgan Stanley Direct Lending	0	5	1	0	2.17

Morgan Stanley Direct Lending has a consensus target price of $21.42, suggesting a potential upside of 9.49%. Given Morgan Stanley Direct Lending’s higher possible upside, analysts plainly believe Morgan Stanley Direct Lending is more favorable than Perception Capital Corp. III.

Valuation and Earnings

This table compares Perception Capital Corp. III and Morgan Stanley Direct Lending”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Perception Capital Corp. III	N/A	N/A	$7.15 million	N/A	N/A
Morgan Stanley Direct Lending	$275.66 million	6.34	$231.01 million	$3.10	6.31

Morgan Stanley Direct Lending has higher revenue and earnings than Perception Capital Corp. III.

Insider and Institutional Ownership

26.9% of Perception Capital Corp. III shares are owned by institutional investors. 0.4% of Perception Capital Corp. III 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 will outperform the market over the long term.

Profitability

This table compares Perception Capital Corp. III and Morgan Stanley Direct Lending’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Perception Capital Corp. III	N/A	-28.86%	1.93%
Morgan Stanley Direct Lending	60.60%	12.57%	6.36%

Summary

Morgan Stanley Direct Lending beats Perception Capital Corp. III on 7 of the 9 factors compared between the two stocks.

About Perception Capital Corp. III

Perception Capital Corp. III does not have significant operations. It intends to effect a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses or entities in the financial technology or financial services ecosystem. The company was formerly known as Portage Fintech Acquisition Corporation and changed its name to Perception Capital Corp. III in October 2023. The company was incorporated in 2021 and is based in Minneapolis, Minnesota.

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.