Horizon Technology (HRZN) AI Stock Analysis

• Market Cap: N/A
• Dividend Yield: 20.92%
• Average Volume (3M): 843.26K
• Price to Earnings (P/E): 6.0
• Beta (1Y): 0.27
• Revenue Growth: -11.22%
• EPS Growth: -433.61%
• Country: US
• Employees: N/A
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 0.23
• Shares Outstanding: 46,316,647
• 10 Day Avg. Volume: 858,683
• 30 Day Avg. Volume: 843,264
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.86
• Price to Sales (P/S): 2.84
• P/FCF Ratio: 4.82
• Enterprise Value/Market Cap: 10.00T>
• Enterprise Value/Revenue: 2.70
• Enterprise Value/Gross Profit: -28.50
• Enterprise Value/Ebitda: -10.80
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 1.05
• Revenue Forecast (FY): $70.34M

• Rating: 62 Neutral
• Price Target: $5.00 ▼(-22.48% Downside)
• Action: Reiterated Date: 03/05/26
• Date: Action: Reiterated 03/05/26

The score is driven mainly by improving but still volatile financial performance and a mixed earnings-call outlook (growth ambitions and strong liquidity/yields, but NAV and near-term NII pressure). Valuation is supportive with a low P/E and high yield, while weak technical signals (below major moving averages with negative momentum) weigh on the overall rating.

Positive Factors

High Portfolio Yields

Horizon’s debt portfolio yields (14.3% Q4; ~16% FY2025) are structurally high for a BDC, supporting durable net investment income generation and margin resilience versus funding costs. If underwriting and credit performance hold, these yields underpin sustainable distributable cash flows over months.

Strong Liquidity & Capacity

Material liquidity (cash plus undrawn capacity) and roughly $472M of potential capacity provide the firm with dry powder to scale originations, absorb redemptions, and deploy into higher-yield loans. This capital flexibility supports steady portfolio growth and reduces short-term funding risk.

Transformational Merger Planned

The planned MRCC merger is a structural change that should materially increase invested capital, expand origination capabilities, and lower per-unit costs via scale. Over 2–6 months post-close, this can enable larger loans, deeper deal flow, and improved competitive positioning in venture lending.

Negative Factors

NAV Decline & NII Pressure

A meaningful YoY NAV decline (~-17.2%) and a sharp drop in NII per share reflect structural earnings volatility and distributions exceeding current income in the quarter. This reduces the capital cushion for future distributions and elevates the risk that payouts rely on nonrecurring gains.

Balance-Sheet Comparability Risk

An abrupt shift to reported zero debt in 2025 after years of elevated leverage creates uncertainty about true funding mix and comparability. Historical debt levels indicate the company has operated with meaningful leverage, so the unclear shift complicates assessment of solvency, interest expense trajectory and financings.

Exit-Market Dependence & Realized Losses

Horizon’s upside relies partly on warrants and equity (fair value ~$51M across 97 companies). Limited exit markets, realized losses, and sparse disclosure prolong conversion of equity upside and increase downside risk, weakening long-term return prospects and extending credit exposure duration.

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 generates revenue through multiple streams. The primary source of income comes from service contracts in IT consulting and software development, where clients pay for bespoke solutions tailored to their specific needs. Additionally, the company earns recurring revenue from subscription-based services related to cloud computing and data analytics. Strategic partnerships with major tech firms enhance their offerings and expand their market reach, contributing to increased sales. Furthermore, Horizon Technology benefits from government contracts and grants aimed at technological advancements, which supplement its earnings.

Horizon Technology Financial Statement Overview

Summary

Financials improved in the latest period with a sharp 2025 rebound in revenue and net income and continued positive operating/free cash flow. Offsetting this are pronounced multi-year volatility and balance-sheet comparability concerns, including an abrupt shift to zero reported debt in 2025 after several years of elevated debt-to-equity.

Income Statement

Results show a sharp turnaround in 2025: revenue surged to $96.0M (up ~420% year-over-year) and net income rebounded to $45.5M with a strong ~47% net margin, lifting profitability meaningfully versus losses in 2023–2024. However, the earnings profile has been volatile over the cycle (profitable in 2020–2022, then losses in 2023–2024, then a rebound in 2025), which lowers confidence in durability. Several operating profitability line items are reported as zero in 2025, limiting visibility into the quality of the rebound across the income statement.

Balance Sheet

The balance sheet shows a sizable equity base (~$318.5M in 2025) against ~$811.1M of assets, and return on equity improved to ~14% in 2025 after being negative in 2023–2024. That said, leverage was elevated in prior years (debt-to-equity ~1.36–1.43 during 2022–2024), indicating meaningful balance-sheet risk through the downturn. 2025 reports total debt as zero, which is a dramatic change from ~ $468M in 2024; without additional context, this creates uncertainty about comparability and the true leverage trajectory.

Cash Flow

Cash generation improved: operating cash flow and free cash flow were positive in 2023–2025 (about $50.1M, $39.6M, and $56.6M respectively), with free cash flow up ~36% in 2025. Cash flow also held up better than earnings during weaker periods, helping reduce downside risk. The main weakness is historical volatility—2020–2022 show materially negative operating and free cash flow (including a very large outflow in 2022), suggesting cash conversion can swing significantly depending on period conditions.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	96.02M	33.94M	19.10M	45.84M	45.30M
Gross Profit	0.00	1.69M	-9.87M	26.64M	33.27M
EBITDA	0.00	-4.16M	-15.70M	21.87M	28.18M
Net Income	45.48M	-5.63M	-17.18M	21.15M	27.78M
Balance Sheet
Total Assets	811.10M	821.83M	802.36M	766.83M	513.96M
Cash, Cash Equivalents and Short-Term Investments	105.52M	70.26M	46.63M	20.61M	38.05M
Total Debt	0.00	467.90M	462.24M	434.08M	257.61M
Total Liabilities	492.60M	485.65M	478.38M	448.38M	268.63M
Stockholders Equity	318.50M	336.18M	323.98M	318.45M	245.34M
Cash Flow
Free Cash Flow	56.63M	39.64M	50.07M	-246.28M	-75.99M
Operating Cash Flow	56.63M	39.64M	50.07M	-246.28M	-75.99M
Investing Cash Flow	-217.79M	-35.70M	-55.33M	-372.01M	-291.49M
Financing Cash Flow	-14.80M	21.21M	50.51M	229.46M	75.52M

Horizon Technology Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.45
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 6.45 is above the 20-day moving average (MA) of 6.37, above the 50-day MA of 6.39, and above the 200-day MA of 6.33, indicating a bearish trend. The MACD of -0.09 indicates Positive momentum. The RSI at 39.17 is Neutral, neither overbought nor oversold. The STOCH value of 26.72 is Neutral, 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
TPVG	69 Neutral	$214.93M	―	9.43%	17.28%	206.13%	298.86%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
HRZN	62 Neutral	―	6.01	-7.27%	20.92%	-11.22%	-433.61%
HTGC	62 Neutral	$2.75B	10.01	16.02%	10.00%	-15.32%	-12.29%
SCM	60 Neutral	$288.89M	13.90	8.20%	12.83%	90.34%	-44.25%
PNNT	59 Neutral	$330.40M	10.64	5.38%	16.61%	-3.09%	200.66%
TCPC	53 Neutral	$334.79M	4.23	-1.15%	21.13%	-91.81%	78.46%

Horizon Technology Corporate Events

Horizon Technology Declares Q2 2026 Monthly Cash Distributions

On March 3, 2026, Horizon Technology Finance said its board approved monthly cash distributions of $0.06 per share for each of April, May and June 2026, for a total of $0.18 per share, with ex‑dividend and record dates on March 16, April 16 and May 18 and corresponding payment dates on April 15, May 15 and June 16. The business development company noted it has paid $360 million in cumulative shareholder distributions since its 2010 IPO, and said the latest payout levels were set after reviewing taxable income, spillover income and its longer‑term outlook, including the expected impact of its planned merger with Monroe Capital Corporation and the operation of its dividend reinvestment plan, which allows most investors to receive shares instead of cash.

Horizon’s board explained that distribution decisions reflect differences between taxable income and GAAP net income, driven by unrealized gains or losses and timing differences in income and expense recognition. The company also highlighted its dividend reinvestment plan mechanics, under which it can issue new shares or repurchase stock in the open market to satisfy reinvestment demand, a structure that may modestly support capital levels and liquidity while maintaining regular income for shareholders as it moves toward combining with Monroe Capital Corporation.

The most recent analyst rating on (HRZN) stock is a Hold with a $7.00 price target. To see the full list of analyst forecasts on Horizon Technology stock, see the HRZN Stock Forecast page.

Horizon Technology Updates Key Financing and Servicing Agreements

On February 6, 2026, Horizon Credit II LLC, a wholly owned subsidiary of Horizon Technology Finance Corporation, amended its existing loan and security agreement with a syndicate of lenders arranged and led by KeyBank National Association, updating the terms of a facility originally restated in June 2021. On February 10, 2026, the subsidiary and its parent also amended their sale and servicing agreement with Horizon Technology Finance Management LLC, U.S. Bank National Association, and KeyBank, refining the operational framework that governs loan purchases, servicing, and collateral management within the company’s financing structure.

These coordinated amendments signal an ongoing optimization of Horizon Technology Finance’s funding and servicing arrangements, which may enhance the efficiency and resilience of its credit platform and strengthen relationships with key banking partners and service providers. While the company did not disclose specific revised terms, the moves underscore active management of its capital structure and operational agreements in support of its specialty lending activities.

The most recent analyst rating on (HRZN) stock is a Hold with a $7.00 price target. To see the full list of analyst forecasts on Horizon Technology stock, see the HRZN Stock Forecast page.

Horizon Technology Announces $57.5M Notes Issuance

On December 11, 2025, Horizon Technology Finance Corporation announced an underwriting agreement for a $57.5 million issuance of 7.00% Notes due 2028, with the offering expected to close on December 15, 2025. The proceeds will be used to repay existing indebtedness, including the company’s 4.875% Notes due 2026, and for general corporate purposes. This move is part of Horizon’s strategy to manage its debt and optimize its financial operations, potentially impacting its market position and stakeholder interests.

The most recent analyst rating on (HRZN) stock is a Hold with a $7.00 price target. To see the full list of analyst forecasts on Horizon Technology stock, see the HRZN Stock Forecast page.