Prospect Capital (NASDAQ:PSEC) Posts Quarterly Earnings Results, Beats Expectations By $0.05 EPS

Prospect Capital (NASDAQ:PSEC) issued its quarterly earnings results on Wednesday. The financial services provider reported $0.15 earnings per share for the quarter, beating the consensus estimate of $0.10 by $0.05, Zacks reports. The company had revenue of $151.74 million during the quarter, compared to analysts’ expectations of $163.14 million. Prospect Capital had a return on equity of 13.19% and a net margin of 3.80%.

Prospect Capital Trading Up 2.9%

Shares of Prospect Capital stock traded up $0.04 on Friday, hitting $1.43. 7,080,445 shares of the company’s stock traded hands, compared to its average volume of 5,143,480. Prospect Capital has a one year low of $1.29 and a one year high of $3.12. The company has a debt-to-equity ratio of 0.64, a current ratio of 0.87 and a quick ratio of 0.87. The company has a fifty day moving average of $1.91 and a two-hundred day moving average of $2.34. The company has a market capitalization of $760.69 million, a price-to-earnings ratio of -9.50 and a beta of 0.84.

Prospect Capital Announces Dividend

The firm also recently announced a monthly dividend, which will be paid on Wednesday, February 17th. Investors of record on Wednesday, January 27th will be given a dividend of $0.0350 per share. The ex-dividend date is Wednesday, January 27th. This represents a $0.42 annualized dividend and a dividend yield of 29.5%. Prospect Capital’s dividend payout ratio is presently -280.00%.

Insiders Place Their Bets

In other Prospect Capital news, CEO John Barry. III bought 1,217,105 shares of the stock in a transaction on Friday, September 4th. The stock was acquired at an average cost of $2.24 per share, for a total transaction of $2,726,315.20. Following the completion of the acquisition, the chief executive officer owned 90,479,988 shares in the company, valued at $202,675,173.12. This trade represents a 1.36% increase in their position. The acquisition was disclosed in a document filed with the SEC, which is available at this link. Insiders own 25.94% of the company’s stock.

Analysts Set New Price Targets

A number of research firms have weighed in on PSEC. Weiss Ratings downgraded shares of Prospect Capital from a “sell (d+)” rating to a “sell (d)” rating in a research report on Wednesday, August 26th. Wall Street Zen downgraded shares of Prospect Capital from a “buy” rating to a “hold” rating in a research report on Saturday, August 22nd. Wells Fargo & Company reduced their price objective on shares of Prospect Capital from $2.00 to $1.50 and set an “underweight” rating on the stock in a research note on Friday. Finally, Zacks Research upgraded shares of Prospect Capital to a “hold” rating in a research report on Monday, October 5th. One equities research analyst has rated the stock with a Hold rating and two have issued a Sell rating to the stock. According to data from MarketBeat, the company presently has an average rating of “Sell” and an average price target of $1.50.

More Prospect Capital News

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

• Positive Sentiment: PSEC reported fiscal Q1 2027 net investment income of $0.15 per share, topping the $0.10 consensus estimate. Management also highlighted credit metrics it described as stronger than the market and authorized up to $200 million in share repurchases. Earnings call highlights
• Positive Sentiment: The company declared monthly dividends of $0.035 per share, equivalent to $0.42 annualized. The sizable indicated yield may attract income-focused investors, though it is not guaranteed.
• Neutral Sentiment: Unusually high call-option trading was reported, but options activity alone does not establish a clear outlook for the shares.
• Negative Sentiment: Wells Fargo cut its PSEC price target from $2.00 to $1.50 and maintained an “underweight” rating. The new target implies only about 6.8% upside from the cited $1.41 share price, signaling limited confidence from the firm.
• Negative Sentiment: Although per-share investment income beat expectations, quarterly revenue of $151.74 million missed the $163.14 million consensus. Net investment income also declined to $0.15 per share from $0.17 a year earlier, tempering the earnings beat. Quarterly earnings report
• Negative Sentiment: Commentary on PSEC’s high dividend yield raises concern that it is being supported by a shrinking portfolio. The shares also remain well below their 50- and 200-day moving averages and near their 52-week low, reflecting persistent market weakness. Analysis of dividend and portfolio

About Prospect Capital

Prospect Capital Corporation (NASDAQ:PSEC) is a business development company that provides financing and investment capital to middle-market companies. The company primarily invests in privately held businesses through first-lien and second-lien loans, mezzanine debt, and other debt securities, while also making equity and equity-related investments in selected companies.

Prospect Capital invests across a range of industries and has additional exposure to areas such as real estate, structured credit, and financial services.