Hercules Capital, Inc. (HTGC)
NYSE:HTGC
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Hercules Capital, Inc.
(NYSE:HTGC)
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Rating:62Neutral
Price Target:
$17.50
â–²(17.06% Upside)
Action:DowngradedDate:02/14/26
The score is held back primarily by weak cash-flow reliability and the 2025 earnings disruption (zero net income), alongside bearish technical momentum. Offsetting these are a supportive valuation (low P/E and high yield) and a constructive earnings call highlighting strong origination momentum, solid dividend coverage, and good liquidity/credit positioning.
Positive Factors
Origination and AUM scale expansion
Sustained record originations and large new commitments expand the firm’s lending pipeline and fee-bearing franchise. Higher deal flow and platform scale support repeat deployment, diversified income streams, and improved competitive position in venture lending over the medium term.
Negative Factors
Weak operating cash flow conversion
Persistent negative operating and free cash flows signal inconsistent cash conversion from accrual income, increasing dependence on external funding or capital markets. Over months this raises funding risk, constrains reinvestment, and pressures distribution sustainability despite reported NII.
Read all positive and negative factors
Positive Factors
Negative Factors
Origination and AUM scale expansion
Sustained record originations and large new commitments expand the firm’s lending pipeline and fee-bearing franchise. Higher deal flow and platform scale support repeat deployment, diversified income streams, and improved competitive position in venture lending over the medium term.
Read all positive factors
Hercules Capital, Inc. (HTGC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.75B
Dividend Yield10%
Average Volume (3M)2.45M
Price to Earnings (P/E)9.4
Beta (1Y)0.78
Revenue Growth-15.32%
EPS Growth-12.29%
CountryUS
Employees100
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)0.48
Shares Outstanding183,695,430
10 Day Avg. Volume1,770,055
30 Day Avg. Volume2,454,317
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 Cap1.82
Enterprise Value/Revenue9.12
Enterprise Value/Gross Profit10.46
Enterprise Value/Ebitda13.66
Forecast
1Y Price Target
$19.08Price Target Upside27.63% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)1.95
Revenue Forecast (FY)$581.41M
Hercules Capital, Inc. Business Overview & Revenue Model
Company Description
Hercules Capital, Inc. is a business development company. The firm specializing in providing venture debt, debt, senior secured loans, and growth capital to privately held venture capital-backed companies at all stages of development from startups...
How the Company Makes Money
Hercules Capital generates revenue primarily through interest income from the debt investments it makes in its portfolio companies. The company typically provides secured loans with attractive interest rates, which can include warrants or equity k...
Hercules Capital, Inc. Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call presents a strongly positive operational and financial story: multiple quarterly and annual records (originations, commitments, fundings, investment income, AUM), robust liquidity and capital actions ($300M note issuance), improved credit metrics, and continued shareholder distributions with solid coverage and spillover. Offsetting items include modest yield pressure from lower-than-expected prepayments, a rise in GAAP leverage as the balance sheet grows, some realized/unrealized markdowns and a still-elevated focus on monitoring PIK and sector-specific disruption (AI/software). Overall, the strength in origination momentum, platform growth, liquidity, and credit quality materially outweigh the headwinds mentioned.Positive Updates
Record Originations and Fundings
Q4 record originations of $1.06B and record annual originations of nearly $4.0B; record annual gross fundings of $2.28B, a 25.9% increase year-over-year.
Negative Updates
Lower-Than-Expected Prepayments
Early loan prepayments in Q4 were $149.7M, slightly below the stated range ($150M–$200M) and at the low end of guidance, which modestly reduced Q4 net investment income and effective yield.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Originations and Fundings
Q4 record originations of $1.06B and record annual originations of nearly $4.0B; record annual gross fundings of $2.28B, a 25.9% increase year-over-year.
Read all positive updates
Company Guidance
Hercules guided that it expects higher‑than‑normal market volatility but a very robust new‑business environment in 2026 and gave specific near‑term targets: Q1 core yield in the middle of 12%–12.5%, expected Q1 prepayments of $150–$200M, Q1 SG&A of $26–$27M with an RIA expense allocation of ~$4.5M, higher Q1 interest expense, and an RIA quarterly dividend of $2–$2.5M; it confirmed the $0.40 quarterly base distribution and a $0.07 quarterly supplemental ($0.47 total), noting Q4 NII was $87M ($0.48/sh) covering the base by 120% and the full distribution by 102%. The company reiterated strong Q4/FY2025 metrics and balance‑sheet positioning — Q4 originations $1.06B and FY originations ~$4.0B, FY new commitments $3.92B, FY gross fundings $2.28B, Q4 gross fundings >$522M, FY total investment income $532.5M and NII $341.7M, net debt portfolio growth ≈$748.5M, platform AUM >$5.7B (+20.5% YoY), GAAP leverage 104.4% (regulatory 88.6%; net GAAP 101.8%), liquidity >$1.0B across the platform (~$525–526M in the BDC), weighted average internal credit rating 2.2 (grade 1/2 = 66.6%), weighted average LTV ~14%, first‑lien exposure ~90%, one non‑accrual (~$10.7M cost/$6.3M FV), PIK ≈10.4% of revenue, and a post‑quarter $300M 5.35% note issuance to further bolster liquidity.Hercules Capital, Inc. Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
74
Positive
Cash Flow
28
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 547.10M | 430.90M | 494.12M | 239.39M | 309.58M |
| Gross Profit | 477.25M | 353.75M | 426.50M | 184.64M | 255.13M |
| EBITDA | 365.43M | 263.43M | 337.67M | 102.28M | 174.47M |
| Net Income | 339.74M | 262.97M | 337.48M | 102.08M | 174.16M |
Balance Sheet | |||||
| Total Assets | 4.58B | 3.83B | 3.42B | 3.03B | 2.60B |
| Cash, Cash Equivalents and Short-Term Investments | 56.87M | 113.12M | 98.90M | 15.80M | 133.12M |
| Total Debt | 2.30B | 1.79B | 1.56B | 1.58B | 1.24B |
| Total Liabilities | 2.37B | 1.84B | 1.61B | 1.63B | 1.29B |
| Stockholders Equity | 2.22B | 1.99B | 1.80B | 1.40B | 1.31B |
Cash Flow | |||||
| Free Cash Flow | -425.89M | -118.79M | 67.39M | -424.91M | 128.51M |
| Operating Cash Flow | -425.80M | -118.09M | 68.28M | -424.80M | 128.62M |
| Investing Cash Flow | -89.00K | -705.00K | -887.00K | -114.00K | -106.00K |
| Financing Cash Flow | 368.92M | 119.20M | 22.75M | 314.52M | -229.87M |
Hercules Capital, Inc. Technical Analysis
Neutral
14.95
Price Trends
15.11
Negative
16.50
Negative
16.99
Negative
Market Momentum
-0.02
Negative
52.83
Neutral
65.60
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HTGC, the sentiment is Neutral. The current price of 14.95 is above the 20-day moving average (MA) of 14.49, below the 50-day MA of 15.11, and below the 200-day MA of 16.99, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 52.83 is Neutral, neither overbought nor oversold. The STOCH value of 65.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
63 Neutral | $3.35B | 13.71 | 8.30% | 11.70% | 24.12% | 1.09% | |
62 Neutral | $2.75B | 9.36 | 15.88% | 10.00% | -15.32% | -12.29% | |
59 Neutral | $1.72B | 12.06 | 10.58% | 9.64% | -6.44% | -1.18% | |
58 Neutral | $291.22M | 10.64 | 5.42% | 16.61% | -3.09% | 200.66% | |
56 Neutral | $2.84B | -9.10 | 0.18% | 18.52% | -13.67% | -48.49% | |
54 Neutral | $835.41M | -64.26 | 3.23% | 13.64% | 36.91% | -48.79% |
* Financial Sector Average
HTGC
Hercules Capital, Inc.
14.95
-0.37
-2.41%
GBDC
Golub Capital Bdc
12.71
0.41
3.30%
PFLT
Pennantpark
8.42
-0.04
-0.48%
PNNT
Pennantpark Investment
4.46
-0.91
-16.88%
TSLX
Sixth Street Specialty Lending
18.06
-0.13
-0.69%
FSK
FS KKR Capital
10.13
-5.82
-36.47%
Hercules Capital, Inc. Corporate Events
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...
Regulatory Filings and Compliance
Hercules Capital Issues Technical Clarification in Regulatory Filing
Neutral
Feb 3, 2026
Hercules Capital filed a brief regulatory notice stating that information previously disclosed under Item 2.02 of its current report is being incorporated by reference into another section of the same filing. The filing does not provide additional...
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.