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Horizon Technology (HRZN)
NASDAQ:HRZN
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Horizon Technology
(NASDAQ:HRZN)
Rating:50Neutral
Price Target:―
Positive Factors
Financial Performance
Despite the recent losses, Horizon Technology Finance is expected to sustain its dividend through spillover income, with an anticipated total return of about 23%.
Investment Portfolio
HRZN's investment portfolio grew for the second consecutive quarter after three quarters of decline or no growth.
Merger
A definitive merger agreement with Monroe Capital Corporation positions Horizon Technology Finance to become a more significant player in the private credit markets.
Negative Factors
Leverage
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 Asset Value
The Net Asset Value (NAV) of Horizon Technology Finance has decreased by 10.8%.
Net Loss
Horizon Technology Finance reported a GAAP net loss mainly due to unrealized mark-downs on certain loans.
Horizon Technology (HRZN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
N/A
Dividend Yield19.13%
Average Volume (3M)613.14K
Price to Earnings (P/E)―
Beta (1Y)0.40
Revenue Growth-48.53%
EPS Growth-68.13%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength71
IndustryAsset Management
Share Statistics
EPS (TTM)-0.50
Shares Outstanding42,545,720
10 Day Avg. Volume658,147
30 Day Avg. Volume613,143
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market CapN/A
Enterprise Value/Revenue10.21
Enterprise Value/Gross Profit14.41
Enterprise Value/Ebitda-28.92
Forecast
1Y Price Target
$7.17Price Target Upside3.91% Upside
Rating ConsensusHold
Number of Analyst Covering3
Horizon Technology Business Overview & Revenue Model
Company DescriptionHorizon 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 MoneyHorizon 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 Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Positive
The earnings call centered around the announcement of a strategic merger between Horizon Technology Finance Corporation and Monroe Capital Corporation, highlighting significant equity infusion, cost savings, and shareholder value creation. While the transaction appears accretive with enhanced scale and liquidity for Horizon, uncertainties related to capital deployment and lack of specific targets for expense reduction are noted.Q2-2025 Updates
Positive Updates
Strategic Merger Announcement
Horizon Technology Finance Corporation and Monroe Capital Corporation announced a strategic merger, aiming to unlock shareholder value and establish Horizon as a leading, well-capitalized venture debt and growth capital provider.
Significant Equity Capital Infusion
The merger is expected to provide the combined company with an estimated $165 million of incremental equity capital, enabling enhanced scale, operating efficiencies, and accelerated growth.
Accretive Transaction with Cost Savings
The merger is structured to be accretive to net investment income, with cost savings of approximately $2.5 million in G&A expenses, representing a 30% reduction.
Shareholder Value Creation
MRCC shareholders are expected to realize a 33% premium to the market trading price as of August 5, 2025, based on MRCC's estimated preliminary NAV.
Enhanced Trading Liquidity and Market Capitalization
The merger aims to enhance trading liquidity and market capitalization for Horizon, rewarding investors in the public BDC space.
Negative Updates
No Hard Targets for Expense Structure
Despite addressing expense structure concerns, management did not provide hard targets for yield, net investment income yield on NAV, or other metrics.
Integration and Capital Deployment Risks
Although minimal integration risk is anticipated, the success of capital deployment into accretive portfolio assets remains uncertain.
Company Guidance
During the Horizon Technology Finance Corporation's second quarter 2025 earnings call, the company announced a merger with Monroe Capital Corporation. This strategic transaction aims to unlock shareholder value and position Horizon as a leading venture debt and growth capital provider. The merger will generate an estimated $165 million in incremental equity capital for Horizon, enhancing scale and operational efficiencies. The transaction, structured to be accretive and preserve net asset value (NAV), involves two concurrent steps: MRCC selling its assets to MCIP at a 33% premium to share price, and then merging with Horizon through a NAV-for-NAV share exchange. Post-merger, Horizon's capital base is expected to reach approximately $446 million, supporting accelerated growth and reduced per-share operating expenses. This move is anticipated to be accretive to core net investment income due to G&A savings and potential access to lower-cost financing. The merger is scheduled to close in December 2025, pending regulatory and shareholder approvals.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.45
Neutral
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.62
Positive
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.50
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 62.73M | 1.69M | 113.47M | 79.19M | 60.02M | 46.03M |
| Gross Profit | 44.46M | 1.69M | -9.87M | 49.73M | 60.02M | 18.68M |
| EBITDA | -22.16M | 26.62M | 11.94M | 21.87M | 40.21M | 16.04M |
| Net Income | -14.83M | -5.63M | -17.18M | 21.15M | 27.78M | 6.36M |
Balance Sheet | ||||||
| Total Assets | 726.80M | 821.83M | 802.36M | 766.83M | 513.96M | 407.16M |
| Cash, Cash Equivalents and Short-Term Investments | 24.66M | 70.26M | 46.63M | 20.61M | 38.05M | 0.00 |
| Total Debt | 425.14M | 467.90M | 462.24M | 434.08M | 257.61M | 185.82M |
| Total Liabilities | 443.00M | 485.65M | 478.38M | 448.38M | 268.63M | 194.56M |
| Stockholders Equity | 283.80M | 336.18M | 323.98M | 318.45M | 245.34M | 212.60M |
Cash Flow | ||||||
| Free Cash Flow | 4.97M | 3.94M | 50.07M | -246.28M | -75.99M | -25.28M |
| Operating Cash Flow | 4.97M | 3.94M | 50.07M | -246.28M | -75.99M | -25.28M |
| Investing Cash Flow | -184.76M | 0.00 | -55.33M | -372.01M | -291.49M | -190.23M |
| Financing Cash Flow | -17.75M | 21.21M | 50.51M | 229.46M | 75.52M | 55.66M |
Horizon Technology Technical Analysis
Negative
6.90
Price Trends
7.43
Negative
7.41
Negative
7.92
Negative
Market Momentum
-0.19
Positive
32.57
Neutral
14.04
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 6.9 is below the 20-day moving average (MA) of 7.19, below the 50-day MA of 7.43, and below the 200-day MA of 7.92, indicating a bearish trend. The MACD of -0.19 indicates Positive momentum. The RSI at 32.57 is Neutral, neither overbought nor oversold. The STOCH value of 14.04 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HRZN.
Horizon Technology Risk Analysis
Horizon Technology disclosed 104 risk factors in its most recent earnings report. Horizon Technology reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Horizon Technology Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $15.69B | 10.82 | 10.25% | 8.63% | 7.71% | -29.47% | |
71 Outperform | $1.30B | 9.11 | 9.36% | 15.34% | -55.16% | 47.09% | |
68 Neutral | $17.69B | 11.82 | 10.30% | 3.73% | 9.66% | 0.42% | |
66 Neutral | $323.50M | 6.14 | 18.20% | 6.18% | 18.36% | 17.28% | |
65 Neutral | $1.11B | 13.66 | 6.18% | 12.57% | 39.05% | -32.62% | |
64 Neutral | $3.51B | 12.66 | 12.81% | 9.79% | -15.88% | -13.91% | |
50 Neutral | ― | -15.46% | 19.13% | -48.53% | -68.13% |
* Financial Sector Average
Performance Comparison
HRZN
Horizon Technology
6.90
-2.56
-27.06%
HTGC
Hercules Capital
19.31
2.19
12.79%
NMFC
New Mountain Finance
10.42
-0.48
-4.40%
NEWT
Newtek Business
12.29
0.55
4.68%
ARCC
Ares Capital
22.25
3.05
15.89%
GSBD
Goldman Sachs BDC
11.39
-0.66
-5.48%
Horizon Technology Corporate Events
Private Placements and FinancingM&A TransactionsBusiness Operations and Strategy
Horizon Technology Enters New Investment Management Agreement
Positive
Mar 31, 2025
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.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.