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Pennantpark Floating Rate Capit (PFLT)
:PFLT
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Pennantpark $ (PFLT) AI Stock Analysis

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PFLT

Pennantpark $

(NYSE:PFLT)

Rating:63Neutral
Price Target:
$11.00
â–²(7.00% Upside)
The overall score reflects strong profitability and strategic growth initiatives, tempered by cash flow challenges and mixed earnings call sentiment. The high dividend yield and recent corporate events provide additional support.
Positive Factors
Earnings Potential
PFLT has a strong focus on making senior secured loans to middle-market companies, which contributes to its earnings potential.
Investment Portfolio
The size of PFLT's investment portfolio increased by 2.5% as solid originations exceeded moderate payoffs, enhancing earnings potential.
Negative Factors
Net Asset Value
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%.

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

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
(Q3-2025)
|
% Change Since: |
Next Earnings Date:Nov 12, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted several positive developments, including the formation of a new joint venture, strong credit metrics, and increased deal activity. However, these were counterbalanced by a decline in NAV, realized and unrealized losses, and a temporary slowdown in deal flow. The sentiment is mixed, with a balance of positive and negative aspects.
Q3-2025 Updates
Positive Updates
Formation of New Joint Venture with Hamilton Lane
PennantPark Floating Rate Capital announced a new joint venture with Hamilton Lane, committing $200 million with an expected $300 million financing facility, totaling a $500 million portfolio.
Strong Credit Metrics and Low Nonaccruals
Only 1% of the portfolio is on nonaccrual status at cost, and 0.5% at market value, reflecting the rigor of PennantPark's underwriting process.
Increased Deal Activity and Portfolio Growth
The portfolio grew to $2.4 billion from $2.3 billion, with $208 million invested in new and existing portfolio companies at a weighted average yield of 10.1%.
Enhanced Financial Strength and Liquidity
PennantPark raised $32 million through the issuance of 2.8 million shares at an average price of $11.31 per share, reducing interest rates on their credit facility and extending its maturity.
Negative Updates
Net Asset Value Decline
The NAV per share decreased by 1% from $11.07 to $10.96.
Net Realized and Unrealized Losses
The company reported a net realized and unrealized change on investments as a loss of $5.3 million for the quarter.
Post-Liberation Day Deal Flow Slowdown
There was a slowdown in deal flow following Liberation Day, leading to 60-90 days of lighter deal activity.
Company Guidance
During PennantPark Floating Rate Capital's third fiscal quarter 2025 earnings call, management provided several key metrics and insights. The company reported a core net investment income of $0.27 per share, with a portfolio that grew to $2.4 billion, showing an increase from the previous quarter's $2.3 billion. The weighted average leverage ratio through debt security was 4.3x, with an interest coverage ratio of 2.5x. The portfolio maintained a weighted average loan-to-value of 46% and a yield to maturity of 10.3%. The company formed a new joint venture with Hamilton Lane, committing $200 million of capital, complemented by a $300 million financing facility, aiming for a $500 million total portfolio. The JV is expected to ramp up over 12 to 18 months. Additionally, PennantPark reported that its portfolio's net asset value (NAV) was $10.96 per share, a slight decrease from $11.07 in the previous quarter. The weighted average yield on debt investments was 10.4%, and the company maintained a low nonaccrual rate, with two investments representing 1% of the portfolio at cost.

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
75
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
65
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
40
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue229.43M186.35M139.34M94.38M82.69M49.79M
Gross Profit153.16M186.35M139.34M70.25M52.98M22.68M
EBITDA169.99M92.92M-28.23M33.21M81.06M18.81M
Net Income104.98M91.84M39.26M3.45M56.52M18.41M
Balance Sheet
Total Assets2.52B2.11B1.18B1.22B1.17B1.15B
Cash, Cash Equivalents and Short-Term Investments102.73M112.05M100.56M51.49M49.83M57.51M
Total Debt184.41M1.18B495.43M672.78M652.63M653.21M
Total Liabilities1.43B1.23B526.01M700.38M680.25M671.02M
Stockholders Equity1.09B877.29M653.61M527.09M490.61M477.27M
Cash Flow
Free Cash Flow-677.79M-801.38M140.56M-46.58M49.57M-4.94M
Operating Cash Flow-677.79M-801.38M140.56M-46.58M49.80M-4.94M
Investing Cash Flow-756.76M0.000.000.0041.02M-39.84M
Financing Cash Flow695.93M812.87M-91.53M47.70M-56.31M-909.00K

Pennantpark $ Technical Analysis

Technical Analysis Sentiment
Positive
Last Price10.28
Price Trends
50DMA
10.33
Negative
100DMA
10.06
Positive
200DMA
10.17
Positive
Market Momentum
MACD
-0.04
Negative
RSI
51.52
Neutral
STOCH
73.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PFLT, the sentiment is Positive. The current price of 10.28 is above the 20-day moving average (MA) of 10.24, below the 50-day MA of 10.33, and above the 200-day MA of 10.17, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 51.52 is Neutral, neither overbought nor oversold. The STOCH value of 73.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$1.14B7.2717.31%12.60%31.43%30.85%
71
Outperform
$908.33M10.238.95%9.83%5.87%-12.64%
68
Neutral
$18.05B11.7310.24%3.73%9.66%1.70%
67
Neutral
$1.01B11.836.60%12.82%-17.05%-40.15%
66
Neutral
$1.01B9.389.42%11.50%-3.29%-16.86%
65
Neutral
$1.12B13.936.18%12.31%39.05%-32.62%
63
Neutral
$1.01B12.057.37%11.96%55.25%-47.71%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PFLT
Pennantpark $
10.28
0.05
0.49%
NMFC
New Mountain Finance
10.64
-0.27
-2.47%
SLRC
SLR Investment Corp.
16.69
2.37
16.55%
CGBD
TCG BDC
13.81
-1.34
-8.84%
BCSF
Bain Capital Specialty Finance
15.65
0.21
1.36%
TRIN
Trinity Capital
16.19
4.02
33.03%

Pennantpark $ Corporate Events

Dividends
PennantPark Announces September 2025 Distribution
Neutral
Sep 3, 2025

On September 3, 2025, PennantPark Floating Rate Capital Ltd. announced a monthly distribution of $0.1025 per share for September 2025, payable on October 1, 2025, to stockholders of record as of September 15, 2025. This distribution is expected to be paid from taxable net investment income and may have tax implications for non-U.S. stockholders, as certain distributions could be exempt from U.S. withholding tax under specific conditions.

M&A TransactionsBusiness Operations and Strategy
PennantPark Acquires $250M Asset Portfolio
Positive
Sep 2, 2025

On September 2, 2025, PennantPark Floating Rate Capital Ltd. announced the acquisition of a $250 million asset portfolio, including assets from TSO Puma SPV, LLC, as part of the winding down of PennantPark-TSO Senior Loan Fund, LP. This acquisition is expected to optimize PFLT’s portfolio and increase net investment income by approximately two cents per share per quarter, aligning with the company’s existing investment strategy.

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.

Dividends
PennantPark Announces August 2025 Monthly Distribution
Neutral
Aug 4, 2025

On August 4, 2025, PennantPark Floating Rate Capital Ltd. announced a monthly distribution of $0.1025 per share for August 2025, payable on September 2, 2025, to stockholders of record as of August 15, 2025. The distribution is expected to be paid from taxable net investment income and may offer tax advantages to non-U.S. stockholders under U.S. tax law, potentially impacting the company’s attractiveness to international investors.

Financial Disclosures
PennantPark to Release Q3 Earnings Results Soon
Neutral
Jul 3, 2025

On July 3, 2025, PennantPark Floating Rate Capital Ltd. announced its plan to release its third fiscal quarter earnings results for the period ending June 30, 2025, on August 11, 2025. The company will also hold a conference call on August 12, 2025, to discuss these results, indicating a proactive approach in engaging with stakeholders and maintaining transparency in its financial operations.

Dividends
PennantPark Announces July 2025 Monthly Distribution
Positive
Jul 2, 2025

On July 2, 2025, PennantPark Floating Rate Capital Ltd. announced a monthly distribution of $0.1025 per share for July 2025, payable on August 1, 2025, to stockholders of record as of July 15, 2025. This distribution is expected to be paid from taxable net investment income and may offer tax benefits to non-U.S. stockholders, reflecting the company’s strategic financial management and commitment to providing shareholder value.

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.Date of analysis: Sep 05, 2025