Prospect Capital (NASDAQ:PSEC) Shares Up 8.6% Following Better-Than-Expected Earnings

Prospect Capital Corporation (NASDAQ:PSEC)’s stock price shot up 8.6% on Tuesday after the company announced better than expected quarterly earnings. The company traded as high as $2.84 and last traded at $2.8350. 2,991,955 shares changed hands during trading, a decline of 27% from the average session volume of 4,121,565 shares. The stock had previously closed at $2.61.

The financial services provider reported $0.19 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.10 by $0.09. Prospect Capital had a positive return on equity of 12.29% and a negative net margin of 42.50%.The business had revenue of $176.00 million for the quarter, compared to analysts’ expectations of $156.34 million.

Prospect Capital Dividend Announcement

The business also recently declared a monthly dividend, which will be paid on Tuesday, May 19th. Shareholders of record on Tuesday, April 28th will be issued a $0.045 dividend. This represents a c) dividend on an annualized basis and a dividend yield of 19.0%. The ex-dividend date is Tuesday, April 28th. Prospect Capital’s dividend payout ratio (DPR) is -62.79%.

Key Stories Impacting Prospect Capital

Here are the key news stories impacting Prospect Capital this week:

• Positive Sentiment: Q2 results beat expectations — Prospect reported $0.19 EPS vs. consensus $0.10 and $176M revenue vs. ~$156M, with management citing improved total investment income; that earnings/revenue beat is the main positive catalyst. Prospect Capital Announces Financial Results for December 2025
• Positive Sentiment: The company declared monthly dividends of $0.045 per share (annualized yield ~19.6%), with upcoming record/ex-dividend dates in Feb, Mar and Apr — a high yield that supports income-seeking demand for the shares. (Multiple declarations reported Feb 9, 2026.)
• Neutral Sentiment: Prospect also announced 2026 distributions and published the quarter’s investor package / conference call materials — useful for assessing portfolio composition and realized vs. unrealized gains. Prospect Capital Reports Quarterly Results, Declares 2026 Distributions
• Neutral Sentiment: An affiliated vehicle, Prospect Enhanced Yield Fund, reported strong short-term performance (10.6% net annualized 3-month total return; 9.0% cash dividend yield on NAV) — positive for the firm’s product lineup but peripheral to PSEC’s core BDC results. Prospect Enhanced Yield Fund Announces 10.6% Net Annualized 3-Month Total Return
• Negative Sentiment: Despite the beat, the company still shows a negative net margin (reported ~-42.5%) and relies on distributions that yield nearly 20% — investors may worry about payout sustainability, portfolio credit performance, and the potential pressure on NAV if investment income moderates. Prospect Capital Earnings Report (MarketBeat)

Analysts Set New Price Targets

PSEC has been the subject of a number of research reports. Weiss Ratings reaffirmed a “sell (d)” rating on shares of Prospect Capital in a research report on Thursday, January 22nd. Wall Street Zen upgraded shares of Prospect Capital from a “hold” rating to a “buy” rating in a report on Saturday, December 6th. Two research analysts have rated the stock with a Sell rating, Based on data from MarketBeat.com, the stock currently has a consensus rating of “Sell” and a consensus price target of $2.50.

Hedge Funds Weigh In On Prospect Capital

A number of large investors have recently bought and sold shares of PSEC. Marshall Wace LLP bought a new stake in Prospect Capital in the second quarter worth about $12,424,000. Tactive Advisors LLC acquired a new position in Prospect Capital in the second quarter worth approximately $1,864,000. Kovack Advisors Inc. lifted its position in shares of Prospect Capital by 146.5% during the 2nd quarter. Kovack Advisors Inc. now owns 345,080 shares of the financial services provider’s stock valued at $1,097,000 after acquiring an additional 205,108 shares during the last quarter. Caxton Associates LLP raised its position in shares of Prospect Capital by 86.5% during the second quarter. Caxton Associates LLP now owns 690,059 shares of the financial services provider’s stock worth $2,194,000 after purchasing an additional 319,984 shares during the period. Finally, GatePass Capital LLC purchased a new stake in shares of Prospect Capital during the third quarter valued at $563,000. Institutional investors own 9.06% of the company’s stock.

Prospect Capital Price Performance

The stock has a 50-day moving average of $2.68 and a two-hundred day moving average of $2.75. The firm has a market cap of $1.34 billion, a price-to-earnings ratio of -3.31 and a beta of 0.89. The company has a current ratio of 1.22, a quick ratio of 1.22 and a debt-to-equity ratio of 0.64.

About Prospect Capital

Prospect Capital Corporation is a publicly traded business development company listed on the Nasdaq stock exchange that specializes in providing private debt and equity financing solutions to middle-market companies across the United States. Structured as a closed-end, non-diversified management investment company under the Investment Company Act of 1940, Prospect Capital offers investors access to a diversified portfolio of senior secured loans, subordinated debt and selective equity interests in privately held businesses.

Since its founding in 2004, Prospect Capital has focused on tailoring financing structures to meet the growth, acquisition and recapitalization needs of its portfolio companies.