Pennantpark $ (PFLT) AI Stock Analysis

Compare

1,564 Followers

Top Page

Pennantpark $

(NYSE:PFLT)

Rating:69Neutral

Price Target:

$11.50

▲(10.05% Upside)

PennantPark's overall stock score is driven by strong profitability and a solid balance sheet, although cash flow challenges pose significant risks. The stock's fair valuation and high dividend yield are attractive, while technical indicators suggest a neutral trend. Positive earnings call insights are slightly offset by concerns over unrealized losses.

Positive Factors

Dividend Yield

The analyst maintains the price target at $11.50, expecting a dividend yield of 11.9% and stock price appreciation, leading to a substantial total return.

Earnings Potential

PFLT has a strong focus on making senior secured loans to middle-market companies, which contributes to its earnings potential.

Investment Portfolio Growth

The size of PFLT's investment portfolio increased by 2.5% as solid originations exceeded moderate payoffs, enhancing earnings potential.

Negative Factors

Dividend Coverage

Core net investment income (NII) of $0.28 per share was below the quarterly dividend of $0.3075, which led to a decrease in net asset value (NAV) by 2.4%.

Net Asset Value

The decrease in net asset value (NAV) by 2.4% reflects the shortfall in covering the quarterly dividend with net investment income.

Pennantpark $ (PFLT) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.04B

Dividend Yield11.77%

Average Volume (3M)716.12K

Price to Earnings (P/E)12.4

Beta (1Y)0.62

Revenue Growth55.25%

EPS Growth-47.99%

CountryUS

EmployeesN/A

SectorFinancial

Sector Strength71

IndustryAsset Management

Share Statistics

EPS (TTM)0.25

Shares Outstanding99,217,896

10 Day Avg. Volume907,154

30 Day Avg. Volume716,122

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 Cap2.23

Enterprise Value/Revenue10.08

Enterprise Value/Gross Profit15.10

Enterprise Value/Ebitda13.61

Forecast

1Y Price Target

$11.04

Price Target Upside5.65% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering6

Pennantpark $ Business Overview & Revenue Model

Company DescriptionPennantPark Floating Rate Capital Ltd. (PFLT) is a business development company that focuses on providing financing solutions primarily to private middle-market companies in the United States. The company invests in a diversified portfolio of floating-rate loans and debt securities, primarily targeting sectors such as healthcare, technology, and business services. Through its investment strategy, PFLT aims to generate attractive risk-adjusted returns for its shareholders.

How the Company Makes MoneyPennantPark Floating Rate Capital Ltd. generates revenue primarily through interest income from its portfolio of floating-rate loans and debt securities. The company typically invests in senior secured loans, which provides a higher priority in the capital structure and often yields higher interest rates compared to unsecured debt. Additionally, PFLT may earn management fees from its investment activities and could realize capital gains when it sells assets in its portfolio. The company’s revenue model is underpinned by its ability to identify and invest in high-quality companies with strong growth potential. Strategic partnerships with financial institutions and advisors also enhance PFLT's ability to source deals and provide financing solutions, contributing to its earnings stability.

Pennantpark $ Earnings Call Summary

Earnings Call Date:Aug 11, 2025

(Q2-2025)

% Change Since: -0.19%|

Next Earnings Date:Nov 12, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a solid performance with significant portfolio growth, successful capital raising, and strong credit quality. However, challenges such as a decline in NAV, market volatility, and realized and unrealized losses temper the optimism. Overall, the positive aspects of growth and financial stability are somewhat balanced by the negative impacts of market conditions.

Q2-2025 Updates

Positive Updates

Strong Portfolio Growth

The portfolio grew to $2.3 billion, up 7% from the prior quarter, with $293 million invested in three new and 54 existing portfolio companies at a weighted average yield of 9.9%.

Successful Capital Raising

Over the last 12 months, PFLT raised $163 million through the ATM program and increased leverage capacity by $750 million, leading to over $500 million of available capital.

Low Nonaccruals and Strong Credit Quality

Nonaccruals were reduced to 1% of the portfolio at cost and 0.5% at market value post-quarter end, with a low pay-in-kind income of 3% of total interest income.

Robust Net Investment Income

Core net investment income was $0.28 per share, adjusted to $0.30 per share considering additional shares issued, comfortably covering the dividend.

Negative Updates

Decline in NAV

Net Asset Value (NAV) per share decreased by 2.4% from $11.34 to $11.07 as of March 31st.

Market Volatility Impact

Continued market volatility and the impact of tariffs have led to a slowdown in new platform investments and increased uncertainty.

Realized and Unrealized Losses

The quarter ended with a net realized and unrealized change on investments, resulting in a loss of $23.8 million.

Company Guidance

During the PennantPark Floating Rate Capital earnings call for the second fiscal quarter of 2025, management provided comprehensive guidance and key financial metrics. The company reported a core net investment income of $0.28 per share, which would have been $0.30 per share adjusted for additional shares issued during the quarter. The portfolio grew to $2.3 billion, up 7% from the previous quarter, with investments totaling $293 million at a weighted average yield of 9.9%. The debt-to-equity ratio was 1.3 times, with a weighted average yield on debt investments of 10.5%. Approximately 80% of originations came from existing borrowers, reflecting the strength and stability of their platform. The company also highlighted its financial resilience, with significant steps taken to enhance liquidity, including a $361 million securitization financing with a weighted average spread of 1.59%. Additionally, the portfolio's weighted average debt to EBITDA was 4.2 times, and the interest coverage ratio was 2.3 times. Despite market volatility, the company remains optimistic about future opportunities, with significant available capital totaling approximately $850 million, positioning them well for both defensive and offensive strategies moving forward.

Pennantpark $ Financial Statement Overview

Summary

PennantPark demonstrates strong profitability with healthy margins and a solid balance sheet with low leverage. However, significant challenges in cash flow management, including negative operating and free cash flows, pose risks to liquidity and operational flexibility.

Income Statement

Positive

The income statement shows a strong performance with a consistent revenue growth rate of 7.3% in the TTM period. The company maintains healthy margins with a gross profit margin of 66.76% and a net profit margin of 37.35%. EBIT and EBITDA margins are also robust at 73.93% and 74.09%, respectively. However, the revenue growth rate has slowed compared to previous periods, indicating potential challenges in sustaining high growth.

Balance Sheet

Positive

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.17 in the TTM period, indicating low leverage. The return on equity is moderate at 8.58%, suggesting efficient use of equity to generate profits. However, the equity ratio is not explicitly provided, which limits a full assessment of asset financing.

Cash Flow

Negative

Cash flow analysis reveals significant challenges, with negative operating and free cash flows in the TTM period. The free cash flow growth rate is negative, and the operating cash flow to net income ratio is -3.68, indicating cash flow issues despite profitability. This could pose risks to liquidity and operational flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	229.43M	186.35M	139.34M	94.38M	82.69M	49.79M
Gross Profit	153.16M	186.35M	139.34M	70.25M	52.98M	22.68M
EBITDA	169.99M	92.92M	-28.23M	33.21M	81.06M	18.81M
Net Income	104.98M	91.84M	39.26M	3.45M	56.52M	18.41M
Balance Sheet
Total Assets	2.52B	2.11B	1.18B	1.22B	1.17B	1.15B
Cash, Cash Equivalents and Short-Term Investments	102.73M	112.05M	100.56M	51.49M	49.83M	57.51M
Total Debt	184.41M	1.18B	495.43M	672.78M	652.63M	653.21M
Total Liabilities	1.43B	1.23B	526.01M	700.38M	680.25M	671.02M
Stockholders Equity	1.09B	877.29M	653.61M	527.09M	490.61M	477.27M
Cash Flow
Free Cash Flow	-677.79M	-801.38M	140.56M	-46.58M	49.57M	-4.94M
Operating Cash Flow	-677.79M	-801.38M	140.56M	-46.58M	49.80M	-4.94M
Investing Cash Flow	-756.76M	0.00	0.00	0.00	41.02M	-39.84M
Financing Cash Flow	695.93M	812.87M	-91.53M	47.70M	-56.31M	-909.00K

Pennantpark $ Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price10.45

Price Trends

50DMA

10.40

Positive

100DMA

10.15

Positive

200DMA

10.27

Positive

Market Momentum

MACD

>-0.01

Positive

RSI

48.81

Neutral

STOCH

67.47

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PFLT, the sentiment is Neutral. The current price of 10.45 is below the 20-day moving average (MA) of 10.53, above the 50-day MA of 10.40, and above the 200-day MA of 10.27, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 48.81 is Neutral, neither overbought nor oversold. The STOCH value of 67.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PFLT.

Pennantpark $ Risk Analysis

Pennantpark $ disclosed 98 risk factors in its most recent earnings report. Pennantpark $ 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

Pennantpark $ Peers Comparison

Overall Rating

UnderperformOutperform

Sector (67)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TRIN	74 Outperform	$1.13B	7.21	17.31%	12.67%	31.43%	30.85%
SLRC	71 Outperform	$891.42M	10.04	8.95%	10.04%	5.87%	-12.64%
PFLT	69 Neutral	$1.04B	12.43	7.37%	11.77%	55.25%	-47.99%
CGBD	67 Neutral	$1.01B	11.86	6.60%	12.96%	-17.05%	-40.15%
Sector *	67 Neutral	¥836.52B	13.02	9.24%	3.02%	7.95%	10.79%
BCSF	66 Neutral	$989.89M	9.18	9.42%	11.82%	-3.29%	-16.86%
NMFC	65 Neutral	$1.10B	13.69	6.18%	12.64%	39.05%	-32.62%

* Financial Sector Average

Performance Comparison

PFLT

Pennantpark $

10.45

0.53

5.34%

NMFC

New Mountain Finance

10.36

-0.54

-4.95%

SLRC

SLR Investment Corp.

16.34

2.45

17.64%

CGBD

TCG BDC

13.66

-1.32

-8.81%

BCSF

Bain Capital Specialty Finance

15.26

0.55

3.74%

TRIN

Trinity Capital

16.10

3.73

30.15%

Pennantpark $ Corporate Events

Private Placements and FinancingBusiness Operations and Strategy

PennantPark Enters Joint Venture with Hamilton Lane

Neutral

Aug 13, 2025

On August 8, 2025, PennantPark Floating Rate Capital Ltd. and Hamilton Lane entered into a joint venture agreement to co-manage PennantPark Senior Secured Loan Fund II LLC, focusing on middle market loans. The joint venture involves a combined investment commitment of up to $200 million, with PennantPark committing $150 million and Hamilton Lane $50 million, requiring equal representation and decision-making from both parties.