Hennessy Advisors (HNNA) AI Stock Analysis

• Market Cap: $78.61M
• Dividend Yield: 5.82%
• Average Volume (3M): 10.73K
• Price to Earnings (P/E): 9.8
• Beta (1Y): 0.44
• Revenue Growth: 19.87%
• EPS Growth: 38.04%
• Country: US
• Employees: 17
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 0.24
• Shares Outstanding: 7,892,177
• 10 Day Avg. Volume: 6,059
• 30 Day Avg. Volume: 10,735
• PEG Ratio: 0.21
• Price to Book (P/B): 0.83
• Price to Sales (P/S): 2.29
• P/FCF Ratio: 6.10
• Enterprise Value/Market Cap: 0.60
• Enterprise Value/Revenue: 1.39
• Enterprise Value/Gross Profit: 1.88
• Enterprise Value/Ebitda: 3.88
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: $11.00 ▲(10.55% Upside)
• Action: Reiterated Date: 02/11/26
• Date: Action: Reiterated 02/11/26

The score is primarily driven by solid profitability and generally manageable leverage, but it is held back by recent declines in revenue and free cash flow plus weak debt-coverage metrics. Valuation helps meaningfully (low P/E and strong dividend yield), while technical signals and corporate updates are mixed, with recent operating weakness offset by a dividend increase and supportive governance outcomes.

Positive Factors

High Profitability & Margins

Sustained high margins indicate underlying operating strength and pricing power in the firm's investment strategies. Strong profitability provides internal funding for operations, supports ROE, and creates a buffer against revenue volatility, helping preserve long-term returns and strategic flexibility.

Strong Earnings-to-Cash Conversion

Near-par conversion of net income to free cash flow suggests quality earnings and dependable cash generation. Reliable cash enables recurring dividends, covers capital needs and potential opportunistic investments without heavy external financing, supporting durable shareholder returns.

Improved Liquidity & Shareholder Returns

A meaningful rise in net cash improves financial flexibility and reduces refinancing risk. The 15th consecutive dividend increase signals disciplined capital allocation and commitment to shareholders, reinforcing confidence in long-term payout policy despite near-term revenue softness.

Negative Factors

Declining Revenue & AUM

As an asset manager, recurring fee revenue scales with AUM; a 14% drop materially reduces fee income and limits economies of scale. Persistent outflows or market declines can erode competitive position, constrain product investment and distribution, and depress medium-term organic growth.

Weaker Free Cash Flow & Coverage

Absolute free cash decline and a low cash-flow-to-debt coverage ratio raise concerns about the firm's ability to sustain distributions and invest without tapping reserves. Lower coverage increases vulnerability to interest or market shocks and limits margin for error in capital allocation.

Rising Leverage vs Prior Years

Higher leverage compared with earlier minimal levels reduces balance-sheet optionality. Increased debt magnifies downside from revenue or AUM pressure, raises financing costs over time, and constrains the firm's ability to pursue acquisitions or expand distribution during prolonged industry headwinds.

Hennessy Advisors Business Overview & Revenue Model

Company Description

Hennessy Advisors, Inc. is publicly owned investment manager. It provides its services to Hennessy Funds and investment companies. The firm launches and manages equity, fixed income, and balanced mutual funds. It invests in the public equity and fixed income markets across the globe. The firm primarily invests in growth stocks of companies. It conducts in-house research to make its investments. Hennessy Advisors, Inc. was founded in 1989 and is based in Novato, California with additional offices in Boston, Massachusetts and Chapel Hill, North Carolina.

How the Company Makes Money

Hennessy Advisors generates revenue primarily through management fees charged on the assets under management (AUM) in its investment funds. These fees are typically calculated as a percentage of the AUM and vary based on the specific fund's structure and strategy. Additionally, the company may earn performance fees if certain investment objectives are met, providing an incentive for achieving higher returns. Significant partnerships with financial advisors and distribution networks also contribute to its earnings by expanding its client base and enhancing the accessibility of its investment products. Furthermore, Hennessy Advisors may receive income from advisory services provided to institutional clients, adding another layer to its revenue generation strategy.

Hennessy Advisors Financial Statement Overview

Summary

Strong profitability (TTM net margin ~26.5%, operating margin ~27%) and solid earnings-to-free-cash-flow conversion (~97% of net income) are tempered by recent softness: TTM revenue down ~3.9%, TTM free cash flow down ~11.4%, and weaker cash-flow-to-debt coverage (~0.28). Balance sheet leverage is manageable (debt-to-equity ~0.41) but higher than earlier years.

Income Statement

Profitability is solid, with TTM (Trailing-Twelve-Months) net margin at ~26.5% and operating profitability remaining strong (TTM operating margin ~27% and EBITDA margin ~35.6%). Revenue trajectory is mixed: after strong growth in FY2024 and FY2025, TTM revenue is down ~3.9%, suggesting some near-term softening. Overall, margins are healthy but top-line momentum has recently turned negative.

Balance Sheet

Leverage is moderate with debt-to-equity around ~0.41 in TTM (Trailing-Twelve-Months), which is manageable, and equity has grown versus earlier years. Returns on equity are respectable (about ~9.3% TTM, ~10.2% in FY2025), indicating decent efficiency. The main watch item is the step-up in debt versus FY2021 (when leverage was minimal), which reduces balance-sheet flexibility compared with that earlier period.

Cash Flow

Cash generation is generally good with free cash flow closely matching earnings (free cash flow at ~97% of net income in TTM and prior years). However, TTM (Trailing-Twelve-Months) free cash flow is down ~11.4% and the cash-flow-to-debt coverage appears weak in TTM (coverage ratio ~0.28), a notable deterioration from FY2024–FY2025 levels. In short, conversion remains strong, but recent cash flow pressure and weaker debt coverage temper the outlook.

Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	34.15M	35.54M	29.65M	24.02M	29.67M	32.76M
Gross Profit	25.21M	24.91M	20.58M	12.04M	21.34M	23.68M
EBITDA	12.21M	13.44M	9.11M	6.56M	10.05M	11.11M
Net Income	9.06M	9.96M	7.10M	4.77M	6.19M	7.90M
Balance Sheet
Total Assets	159.56M	160.46M	152.10M	145.72M	143.65M	101.91M
Cash, Cash Equivalents and Short-Term Investments	71.98M	72.44M	63.93M	60.49M	58.50M	15.85M
Total Debt	40.73M	40.50M	40.50M	39.44M	39.52M	1.00M
Total Liabilities	60.65M	62.72M	60.79M	57.97M	57.35M	18.64M
Stockholders Equity	98.91M	97.74M	91.31M	87.75M	86.30M	83.26M
Cash Flow
Free Cash Flow	11.84M	13.35M	8.96M	6.92M	8.45M	10.14M
Operating Cash Flow	12.22M	13.79M	9.28M	7.13M	8.66M	10.39M
Investing Cash Flow	-560.00K	-627.00K	-1.30M	-819.00K	-231.00K	-249.00K
Financing Cash Flow	-4.67M	-4.66M	-4.53M	-4.33M	34.22M	-4.26M

Hennessy Advisors Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 9.95
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HNNA, the sentiment is Neutral. The current price of 9.95 is above the 20-day moving average (MA) of 9.93, above the 50-day MA of 9.87, and below the 200-day MA of 10.44, indicating a neutral trend. The MACD of 0.03 indicates Negative momentum. The RSI at 50.42 is Neutral, neither overbought nor oversold. The STOCH value of 61.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HNNA.

Hennessy Advisors Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SSSS	67 Neutral	$223.31M	7.39	35.45%	5.39%	―	―
HNNA	66 Neutral	$78.61M	9.81	10.54%	5.82%	19.87%	38.04%
OFS	56 Neutral	$52.52M	-0.94	-22.40%	25.87%	-14.76%	―
MRCC	56 Neutral	$91.87M	12.10	-2.86%	14.03%	-34.92%	-132.22%
GECC	49 Neutral	$79.79M	-2.74	-25.53%	22.43%	47.01%	-179.46%
OXSQ	46 Neutral	$151.09M	―	-12.24%	24.14%	-177.91%	55.08%

Hennessy Advisors Corporate Events

Hennessy Advisors Shareholders Back Board, Pay and Auditor

At its annual meeting held on February 5, 2026, Hennessy Advisors, Inc. shareholders elected all eight nominated directors to terms running until the 2027 annual meeting, reinforcing continuity in the company’s board leadership. Shareholders also approved, on an advisory basis, the compensation of named executive officers and selected a three-year interval for future say-on-pay votes, while ratifying the appointment of CBIZ CPAs P.C. as the independent auditor for fiscal 2026, signaling broad investor support for current governance and oversight practices.

The most recent analyst rating on (HNNA) stock is a Hold with a $11.00 price target. To see the full list of analyst forecasts on Hennessy Advisors stock, see the HNNA Stock Forecast page.

Hennessy Advisors Posts Weaker Q1 Results, Raises Dividend

On February 5, 2026, Hennessy Advisors reported financial results for its first fiscal quarter of 2026, ended December 31, 2025, showing a 14% year-on-year decline in revenue to $8.3 million, a 32% drop in net income to $1.9 million, and a 33% decrease in diluted EPS to $0.24, driven by a 14% reduction in assets under management to $4.1 billion. Despite the weaker top- and bottom-line performance, the company emphasized its strengthened balance sheet, with cash and cash equivalents net of debt rising 28% to $31.7 million, and its board approved the firm’s 15th dividend increase, lifting the quarterly payout 9% to $0.15 per share—equating to a 5.9% annualized yield—thereby signaling ongoing confidence and a continued commitment to returning capital to shareholders while retaining financial flexibility for future opportunities.

The most recent analyst rating on (HNNA) stock is a Buy with a $11.50 price target. To see the full list of analyst forecasts on Hennessy Advisors stock, see the HNNA Stock Forecast page.