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Horizon Technology (HRZN)
NASDAQ:HRZN
US Market

Horizon Technology (HRZN) AI Stock Analysis

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Horizon Technology

(NASDAQ:HRZN)

Rating:50Neutral
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 and Equity
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
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 (HRZN) vs. SPDR S&P 500 ETF (SPY)

Horizon Technology Business Overview & Revenue Model

Company DescriptionHorizon Technology (HRZN) is a leading technology company specializing in the development and deployment of advanced software solutions and digital infrastructure. The company operates in sectors such as cloud computing, artificial intelligence, and cybersecurity, offering innovative products and services that drive digital transformation for businesses worldwide.
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:Apr 29, 2025
(Q1-2025)
|
% Change Since: -13.73%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a challenging environment with significant macroeconomic headwinds impacting the company's NAV and stressed assets. However, Horizon reported strong portfolio yields, liquidity, and positive developments in some portfolio companies. Despite these positives, the ongoing market volatility and uncertainties, particularly regarding tariffs, weigh heavily on the company's performance and outlook.
Q1-2025 Updates
Positive Updates
Portfolio Growth and Investment Capacity
Despite macroeconomic challenges, Horizon increased its debt portfolio by $20 million in the first quarter. The company also raised its committed and approved backlog to nearly $236 million, providing a solid base for future growth opportunities.
High Portfolio Yield
Horizon achieved a debt portfolio yield of 15% for the quarter, which is among the highest in the BDC industry. This is expected to lead to increased net investment income over time.
Strong Liquidity Position
The company reported $126 million in available liquidity and a potential new investment capacity of $307 million, indicating a strong balance sheet ready to support growth.
Positive Developments in Portfolio Companies
Emalex Biosciences met pivotal trial endpoints for its drug to treat Tourette syndrome, and Kodiak Robotics announced the use of driverless trucks in commercial operations, with plans to go public at a $2.5 billion valuation.
Negative Updates
Net Asset Value Decline
The company's NAV decreased from $8.43 to $7.57 per share due to adjustments to fair value, paid distributions, and unrealized depreciations.
Stressed Assets and NAV Impact
The macro environment, including tariff-related uncertainties, negatively impacted Horizon's potential recovery from some stressed assets, leading to a significant decrease in NAV.
Nonaccruals and Loan Defaults
The company experienced downgrades of investments in InBrace and Standvast to one-rated investments, with reductions in fair values to zero. Additionally, Soli Organic faced a blockage notice from its senior lender, potentially affecting its nonaccrual status.
Market Volatility and Uncertainty
Tariff-related uncertainty and macro volatility have dampened optimism, affecting the venture capital ecosystem and exit markets for tech and life science companies.
Company Guidance
During the Horizon Technology Finance Corporation's first quarter 2025 earnings call, the company provided guidance that reflected a cautious yet optimistic outlook. They reported a net investment income of $0.27 per share and aimed to deliver net investment income at or above declared distributions over time. Horizon managed to grow its debt portfolio by $20 million, achieving a yield of 15% on debt investments, which stands at the top of the Business Development Company (BDC) industry. The company declared regular monthly distributions of $0.11 per share through September 2025, leveraging an undistributed spillover income of $1 per share. They also increased their committed and approved backlog to nearly $236 million. Despite market volatility, Horizon remains positioned to grow its portfolio, supported by a strong liquidity position with $126 million available. The company maintains a target leverage range of 1.2 to 1.3 times debt-to-equity, and their debt portfolio yield and onboarding yields are strong at 15% and 13%, respectively. Management expressed confidence in the long-term growth potential, driven by a robust pipeline of opportunities, continued high demand for venture debt capital, and operational independence post the Monroe Capital and Wendel Group partnership.

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
45
Neutral
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
62
Positive
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
50
Neutral
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
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
66.61M1.69M-9.87M26.64M33.27M10.33M
Gross Profit
59.77M1.69M-9.87M6.66M17.31M-2.33M
EBIT
44.70M-4.16M-1.34M41.07M28.18M6.59M
EBITDA
14.03M26.62M11.94M0.000.000.00
Net Income Common Stockholders
-3.19M-5.63M-17.18M21.15M27.78M6.36M
Balance SheetCash, Cash Equivalents and Short-Term Investments
22.16M70.26M46.63M20.61M38.05M19.50M
Total Assets
294.79M821.83M802.36M766.83M513.96M407.16M
Total Debt
131.92M0.00462.24M434.08M257.61M185.82M
Net Debt
109.76M-70.26M389.15M413.47M219.56M166.32M
Total Liabilities
138.37M485.65M478.38M448.38M268.63M194.56M
Stockholders Equity
156.42M336.18M323.98M318.45M245.34M212.60M
Cash FlowFree Cash Flow
-57.68M3.94M50.07M-246.28M-75.99M-25.28M
Operating Cash Flow
-61.32M3.94M50.07M-246.28M-75.99M-25.28M
Investing Cash Flow
-29.29M0.000.00-372.01M-291.49M-190.23M
Financing Cash Flow
19.42M21.21M50.51M229.46M75.52M55.66M

Horizon Technology Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price7.60
Price Trends
50DMA
7.83
Negative
100DMA
8.43
Negative
200DMA
8.76
Negative
Market Momentum
MACD
-0.08
Negative
RSI
47.52
Neutral
STOCH
69.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HRZN, the sentiment is Neutral. The current price of 7.6 is above the 20-day moving average (MA) of 7.48, below the 50-day MA of 7.83, and below the 200-day MA of 8.76, indicating a neutral trend. The MACD of -0.08 indicates Negative momentum. The RSI at 47.52 is Neutral, neither overbought nor oversold. The STOCH value of 69.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$15.40B10.8510.29%8.64%14.14%-31.30%
71
Outperform
$1.35B26.633.27%14.43%-28.04%-69.52%
70
Outperform
$3.18B13.6311.30%8.82%-7.29%-38.60%
65
Neutral
$1.16B10.888.11%11.82%-3.55%-20.43%
65
Neutral
$283.70M5.6418.18%7.06%21.99%23.40%
64
Neutral
$12.83B9.787.78%16985.64%12.26%-7.81%
50
Neutral
-11.21%17.46%-22.40%-114.06%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HRZN
Horizon Technology
7.54
-2.98
-28.33%
HTGC
Hercules Capital
18.03
0.17
0.95%
NMFC
New Mountain Finance
10.81
-0.36
-3.22%
NEWT
Newtek Business
11.18
-1.06
-8.66%
ARCC
Ares Capital
22.34
2.79
14.27%
GSBD
Goldman Sachs BDC
11.61
-1.65
-12.44%

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.