Inspirato (NASDAQ:ISPO) and Morgan Stanley Direct Lending (NYSE:MSDL) Critical Comparison

Morgan Stanley Direct Lending (NYSE:MSDL) and Inspirato (NASDAQ:ISPO) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, risk and profitability.

Earnings & Valuation

This table compares Morgan Stanley Direct Lending and Inspirato”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Morgan Stanley Direct Lending	$275.66 million	6.55	$231.01 million	$3.10	6.51
Inspirato	$329.10 million	0.08	-$51.76 million	($14.56)	-0.26

Morgan Stanley Direct Lending has higher earnings, but lower revenue than Inspirato. Inspirato is trading at a lower price-to-earnings ratio than Morgan Stanley Direct Lending, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

39.5% of Inspirato shares are owned by institutional investors. 0.2% of Morgan Stanley Direct Lending shares are owned by insiders. Comparatively, 34.2% of Inspirato shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Morgan Stanley Direct Lending and Inspirato, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Morgan Stanley Direct Lending	0	5	1	0	2.17
Inspirato	0	1	1	0	2.50

Morgan Stanley Direct Lending presently has a consensus price target of $21.42, suggesting a potential upside of 6.13%. Inspirato has a consensus price target of $10.50, suggesting a potential upside of 172.73%. Given Inspirato’s stronger consensus rating and higher probable upside, analysts plainly believe Inspirato is more favorable than Morgan Stanley Direct Lending.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Morgan Stanley Direct Lending	60.60%	12.57%	6.36%
Inspirato	-10.93%	N/A	-13.20%

Summary

Morgan Stanley Direct Lending beats Inspirato on 7 of the 12 factors compared between the two stocks.

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.

About Inspirato

Inspirato Incorporated, together with its subsidiaries, operates as a subscription-based luxury travel company. The company's portfolio includes luxury vacation homes, and accommodations at luxury hotels and resorts, as well as luxury safaris, cruises, custom-designed itineraries, and other experiences. It is involved in solving critical pain points for hospitality suppliers seeking to monetize their property with rental income. In addition, the company offers Inspirato Pass for member to book pass trips; Inspirato Club for members to book trips up to one year in advance Inspirato for Good, a platform designed to help nonprofit organizations accelerate funding results; Inspirato for Business, a business-to-business channel through which subscription and travel products are sold directly to businesses seeking to leverage luxury accommodations to recruit, retain, and reward their employees. The company was founded in 2010 and is headquartered in Denver, Colorado.