Hercules Capital, Inc. (HTGC)
NYSE:HTGC
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Hercules Capital, Inc.
(NYSE:HTGC)
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Rating:69Neutral
Price Target:
$17.50
▲(9.65% Upside)
Action:Reiterated
Date:05/09/26
The score is driven primarily by mixed fundamentals: strong reported profitability and solid ROE are constrained by persistently weak/volatile operating and free cash flow and increasing leverage. The latest earnings call was supportive (record income/originations, strong liquidity and credit metrics, distribution coverage), while technicals are moderately positive and valuation is helped by a reasonable P/E and very high dividend yield.
Positive Factors
High profitability and ROE
Sustained high margins and double-digit ROE indicate Hercules generates durable earnings from its lending platform. For a BDC, strong profitability supports persistent dividend capacity, funds reinvestment and underwriting resources, and cushions against periodic markdowns or credit volatility.
Negative Factors
Weak cash flow conversion
Earnings frequently fail to convert to cash, producing negative operating and free cash flow in recent trailing periods. This elevates reliance on external funding and mark-to-market realizations to support distributions and portfolio growth, increasing liquidity and funding risk over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
High profitability and ROE
Sustained high margins and double-digit ROE indicate Hercules generates durable earnings from its lending platform. For a BDC, strong profitability supports persistent dividend capacity, funds reinvestment and underwriting resources, and cushions against periodic markdowns or credit volatility.
Read all positive factors
Hercules Capital, Inc. (HTGC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.90B
Dividend Yield10%
Average Volume (3M)1.82M
Price to Earnings (P/E)8.5
Beta (1Y)0.83
Revenue Growth14.32%
EPS Growth36.84%
CountryUS
Employees100
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)1.83
Shares Outstanding187,118,590
10 Day Avg. Volume1,451,388
30 Day Avg. Volume1,816,819
Financial Highlights & Ratios
PEG Ratio0.56
Price to Book (P/B)1.54
Price to Sales (P/S)6.22
P/FCF Ratio-7.99
Enterprise Value/Market Cap1.86
Enterprise Value/Revenue9.81
Enterprise Value/Gross Profit11.44
Enterprise Value/Ebitda15.11
Forecast
1Y Price Target
$19.75Price Target Upside23.75% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)1.92
Revenue Forecast (FY)$586.36M
Hercules Capital, Inc. Business Overview & Revenue Model
Company Description
Hercules Capital, Inc. operates as a Business Development Company (BDC) with a core mission to provide growth capital, including venture debt and senior secured loans. It primarily targets privately held, venture capital-backed companies across th...
How the Company Makes Money
Hercules Capital primarily makes money by originating and holding income-producing debt investments in venture-backed companies. Its core revenue stream is interest income earned on loans (typically senior secured) made to portfolio companies, whi...
Hercules Capital, Inc. Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Positive
The call presented multiple record operational achievements (all-time originations, record investment income, strong NII, AUM growth, solid liquidity and tight credit metrics) which substantially outweigh the negatives (modest NAV decline driven by $45M of unrealized markdowns, higher leverage and rising expenses amid market volatility). Management emphasized defensive underwriting, strong cash coverage of distributions, and significant redeployment optionality from expected prepayments. While volatility and near-term valuation uncertainty are noted, the tone and metrics indicate robust performance and confidence in execution.Positive Updates
Record Originations and Fundings
All-time record originations of over $1.81 billion in Q1 2026; gross fundings of over $706 million leading to $298 million of net debt investment portfolio growth.
Negative Updates
NAV Decline and Unrealized Depreciation
Net asset value per share declined to $11.90, a 1.9% decrease from Q4 2025; $45 million of net unrealized depreciation in Q1 (approximately $31.1 million from debt investments — ~$23.2 million due to market yield adjustments — and $12.3 million from equity valuations).
Read all updates
Q1-2026 Updates
Positive
Negative
Record Originations and Fundings
All-time record originations of over $1.81 billion in Q1 2026; gross fundings of over $706 million leading to $298 million of net debt investment portfolio growth.
Read all positive updates
Company Guidance
For Q2 management reiterated that core yield should remain relatively flat, guiding to a 12.0%–12.5% range (Q1 core yield 12.2%, GAAP effective yield 12.8%), and that prepayments should increase materially to $350–$500 million (driven largely by M&A) providing redeployment optionality; they also expect interest expense to rise (Q1 interest expense $30.8M; weighted average cost of debt 5.1%), SG&A of $27.5–$28.5M with an RIA expense allocation of ~$4.5M, an RIA dividend to HTGC of ~$2.0–$2.5M, and emphasized strong liquidity ($454.5M in the BDC, >$1.0B across the platform) and balance-sheet dynamics (Q1 GAAP leverage 115.4% / regulatory 99.7%, net GAAP 113.5%), noting that >75% of prime‑based loans are at contractual floors and ~98% of the debt portfolio is floating with floors.Hercules Capital, Inc. Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
64
Positive
Cash Flow
34
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 550.62M | 547.10M | 430.90M | 494.12M | 239.39M | 309.58M |
| Gross Profit | 472.33M | 477.25M | 353.75M | 426.50M | 184.64M | 255.13M |
| EBITDA | 357.59M | 365.43M | 263.43M | 337.67M | 102.28M | 174.47M |
| Net Income | 331.90M | 339.74M | 262.97M | 337.48M | 102.08M | 174.16M |
Balance Sheet | ||||||
| Total Assets | 4.83B | 4.58B | 3.83B | 3.42B | 3.03B | 2.60B |
| Cash, Cash Equivalents and Short-Term Investments | 42.37M | 56.87M | 113.12M | 98.90M | 15.80M | 133.12M |
| Total Debt | 2.55B | 2.30B | 1.79B | 1.56B | 1.58B | 1.24B |
| Total Liabilities | 2.60B | 2.37B | 1.84B | 1.61B | 1.63B | 1.29B |
| Stockholders Equity | 2.23B | 2.22B | 1.99B | 1.80B | 1.40B | 1.31B |
Cash Flow | ||||||
| Free Cash Flow | -351.74M | -425.89M | -118.79M | 67.39M | -424.91M | 128.51M |
| Operating Cash Flow | -351.65M | -425.80M | -118.09M | 68.28M | -424.80M | 128.62M |
| Investing Cash Flow | -82.68M | -89.00K | -705.00K | -887.00K | -114.00K | -106.00K |
| Financing Cash Flow | 424.94M | 368.92M | 119.20M | 22.75M | 314.52M | -229.87M |
Hercules Capital, Inc. Technical Analysis
Positive
15.96
Price Trends
15.32
Positive
15.17
Positive
16.12
Negative
Market Momentum
0.03
Positive
51.88
Neutral
64.70
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HTGC, the sentiment is Positive. The current price of 15.96 is above the 20-day moving average (MA) of 15.46, above the 50-day MA of 15.32, and below the 200-day MA of 16.12, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 51.88 is Neutral, neither overbought nor oversold. The STOCH value of 64.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HTGC.
Hercules Capital, Inc. Risk Analysis
Hercules Capital, Inc. disclosed 34 risk factors in its most recent earnings report. Hercules Capital, Inc. 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
Hercules Capital, Inc. Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $2.90B | 8.53 | 15.11% | 10.00% | 14.32% | 36.84% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | $791.76M | 12.78 | 5.84% | 13.64% | -8.63% | -30.41% | |
59 Neutral | $3.46B | 17.04 | 5.24% | 11.70% | 6.69% | -31.63% | |
59 Neutral | $1.61B | 14.88 | 0.03% | 9.64% | -29.32% | -39.45% | |
52 Neutral | $3.03B | ― | -9.39% | 18.52% | -38.13% | -203.38% | |
50 Neutral | $251.39M | 17.83 | 0.01% | 16.61% | 122.81% | 43.00% |
* Financial Sector Average
HTGC
Hercules Capital, Inc.
15.50
-0.46
-2.91%
GBDC
Golub Capital Bdc
13.29
-0.02
-0.15%
PFLT
Pennantpark
7.98
-1.02
-11.30%
PNNT
Pennantpark Investment
3.85
-1.83
-32.23%
TSLX
Sixth Street Specialty Lending
16.90
-4.07
-19.40%
FSK
FS KKR Capital
11.06
-6.64
-37.52%
Hercules Capital, Inc. Corporate Events
Business Operations and StrategyDividendsFinancial DisclosuresPrivate Placements and Financing
Hercules Capital Declares Quarterly Distribution Amid Record Results
Positive
May 5, 2026
On April 30, 2026, Hercules Capital’s board declared a first-quarter 2026 total cash distribution of $0.47 per share, payable in May 2026, following a period of strong financial performance. For the quarter ended March 31, 2026, the company ...
Business Operations and StrategyExecutive/Board Changes
Hercules Capital Elevates Leadership Team to Drive Growth
Positive
May 4, 2026
On April 29, 2026, Hercules Capital’s board approved a leadership reshuffle effective May 18, 2026, promoting long‑time Chief Financial Officer Seth Meyer to President while he continues to report to CEO and Chief Investment Officer Sc...
Business Operations and StrategyDividendsFinancial Disclosures
Hercules Capital Announces Q4 Cash and Supplemental Distribution
Positive
Feb 12, 2026
As of February 10, 2026, Hercules Capital’s board declared a fourth-quarter 2025 total cash distribution of $0.47 per share, incorporating the first of four equal installments of a new $0.28 per share supplemental distribution, payable in ea...
Private Placements and FinancingRegulatory Filings and Compliance
Hercules Capital Completes $300 Million Notes Offering
Positive
Feb 10, 2026
On February 10, 2026, Hercules Capital, Inc. entered into a Tenth Supplemental Indenture with U.S. Bank Trust Company, National Association, and closed a previously announced public offering of $300 million aggregate principal amount of 5.350% uns...
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.