Horizon Technology (HRZN) AI Stock Analysis

• Market Cap: N/A
• Dividend Yield: 17.81%
• Average Volume (3M): 504.94K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.44
• Revenue Growth: -22.40%
• EPS Growth: -114.06%
• Country: US
• Employees: N/A
• Sector: Financial
• Sector Strength: 67
• Industry: Asset Management
• EPS (TTM): -0.50
• Shares Outstanding: 40,354,960
• 10 Day Avg. Volume: 434,064
• 30 Day Avg. Volume: 504,943
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: 11.54
• Enterprise Value/Gross Profit: 12.86
• Enterprise Value/Ebitda: 54.79
• 1Y Price Target: $7.00
• Price Target Upside: -5.53% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 3

• Rating: 50 Neutral
• Price Target: ―

The overall score reflects a complex picture for Horizon Technology. Strong recovery in revenue and reduction in debt are positive, but historical volatility and operational inefficiencies remain significant concerns. Technical indicators suggest bearish momentum, and the negative P/E ratio indicates profitability challenges. The earnings call provided a cautiously optimistic outlook, supported by strong liquidity and portfolio yields, but macroeconomic uncertainties continue to pose risks.

Positive Factors

Dividend Yield

HRZN maintains a strong demand for its loans and has spillover income to support its dividend, which is expected to yield 17.7% annually.

Stock Price Appreciation

Despite a lower price target, HRZN's shares are projected to appreciate by 34.4%, contributing to an estimated 52% total return.

Negative Factors

Leverage Concerns

HRZN's leverage increased due to a larger loan portfolio and reduced equity, nearing the upper end of its target range, indicating a potential need to raise equity.

Net Loss

HRZN experienced a GAAP net loss due to unrealized mark-downs on certain loans, leading to a decrease in net asset value by 10.2%.

Horizon Technology Business Overview & Revenue Model

Company Description

Horizon Technology Finance Corporation is a business development company specializing in lending and and investing in development-stage investments. It focuses on making secured debt and venture lending investments to venture capital backed companies in the technology, life science, healthcare information and services, and cleantech industries. It seeks to invest in companies in the United States.

How the Company Makes Money

Horizon Technology makes money through a diversified revenue model that includes subscription-based services, software licensing fees, and sales of proprietary technology products. Key revenue streams include cloud service subscriptions, AI-powered software solutions, and cybersecurity tools. The company also generates income through strategic partnerships with other technology firms, providing integrated solutions that enhance customer offerings. Additionally, Horizon Technology benefits from long-term contracts with enterprise clients, ensuring a steady flow of recurring revenue.

Horizon Technology Financial Statement Overview

Summary

Horizon Technology displays a complex financial profile with marked fluctuations in revenue and profitability over the years. The latest period shows strong recovery in revenue and reduction in debt, but historical volatility and operational inefficiencies are concerns.

Income Statement

Horizon Technology's revenue growth has been inconsistent, with significant fluctuations over the years. The company experienced a significant revenue decline in 2023, followed by a strong recovery in 2024. Gross profit margin was stable for 2024, but net profit margin was highly volatile, reflecting operational challenges. EBIT margin was relatively high, indicating efficient management of operating expenses.

Balance Sheet

The balance sheet shows improving equity with a strong equity ratio and no debt as of 2024, signaling financial stability. However, the company's high leverage in previous years may pose a risk if similar conditions arise in the future. The return on equity has been fluctuating, reflecting the variability in net income.

Cash Flow

The cash flow statements show volatile free cash flow, with significant growth in 2024. The operating cash flow to net income ratio was low, indicating potential inefficiencies in converting net income into cash. However, the company managed to improve its free cash flow position significantly in the latest period.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.69M	-9.87M	26.64M	33.27M	10.33M
Gross Profit	1.69M	-9.87M	6.66M	17.31M	-2.33M
EBITDA	26.62M	11.94M	0.00	0.00	0.00
Net Income	-5.63M	-17.18M	21.15M	27.78M	6.36M
Balance Sheet
Total Assets	821.83M	802.36M	766.83M	513.96M	407.16M
Cash, Cash Equivalents and Short-Term Investments	70.26M	46.63M	20.61M	38.05M	19.50M
Total Debt	0.00	462.24M	434.08M	257.61M	185.82M
Total Liabilities	485.65M	478.38M	448.38M	268.63M	194.56M
Stockholders Equity	336.18M	323.98M	318.45M	245.34M	212.60M
Cash Flow
Free Cash Flow	3.94M	50.07M	-246.28M	-75.99M	-25.28M
Operating Cash Flow	3.94M	50.07M	-246.28M	-75.99M	-25.28M
Investing Cash Flow	0.00	0.00	-372.01M	-291.49M	-190.23M
Financing Cash Flow	21.21M	50.51M	229.46M	75.52M	55.66M

Horizon Technology Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.41
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HRZN, the sentiment is Negative. The current price of 7.41 is below the 20-day moving average (MA) of 8.01, below the 50-day MA of 7.60, and below the 200-day MA of 8.16, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 38.84 is Neutral, neither overbought nor oversold. The STOCH value of 17.88 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HRZN.

Horizon Technology Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HTGC	77 Outperform	$3.54B	12.93	12.81%	9.83%	-15.88%	-13.91%
ARCC	74 Outperform	$15.86B	11.01	10.25%	8.58%	14.14%	-31.30%
GSBD	71 Outperform	$1.32B	25.98	3.27%	15.84%	-28.04%	-69.52%
Sector *	67 Neutral	¥764.29B	11.15	7.42%	3.20%	7.66%	14.08%
NMFC	65 Neutral	$1.08B	13.45	6.18%	12.84%	-3.55%	-20.43%
NEWT	58 Neutral	$295.29M	5.60	18.20%	6.69%	9.20%	17.37%
HRZN	50 Neutral		―	-11.21%	17.81%	-22.40%	-114.06%

Horizon Technology Corporate Events

Horizon Technology Enters New Investment Management Agreement

On March 31, 2025, Horizon Technology Finance Corporation entered into a new investment management agreement with Horizon Technology Finance Management LLC following a transaction where Momentum US Bidco LLC, an affiliate of Wendel SE, acquired a 75% stake in Monroe Capital LLC’s affiliates, including the indirect parent of the Adviser. The agreement maintains the same terms as the previous one, ensuring continuity in investment advisory services. This strategic partnership aims to support Monroe’s growth initiatives and expand its U.S. private credit platform, with Wendel committing $1 billion for seed capital and GP commitments. Monroe will continue to operate independently, retaining its leadership and investment strategies, while Wendel’s involvement is expected to enhance Monroe’s market position and scalability.