Pennantpark (PFLT) AI Stock Analysis

• Market Cap: $818.55M
• Dividend Yield: 13.64%
• Average Volume (3M): 1.19M
• Price to Earnings (P/E): 23.7
• Beta (1Y): 0.55
• Revenue Growth: 36.91%
• EPS Growth: -48.79%
• Country: US
• Employees: N/A
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 0.27
• Shares Outstanding: 99,217,896
• 10 Day Avg. Volume: 1,559,425
• 30 Day Avg. Volume: 1,190,995
• PEG Ratio: -0.26
• Price to Book (P/B): 0.77
• Price to Sales (P/S): 4.80
• P/FCF Ratio: 8.66
• Enterprise Value/Market Cap: 2.90
• Enterprise Value/Revenue: 16.34
• Enterprise Value/Gross Profit: 50.19
• Enterprise Value/Ebitda: 66.68
• 1Y Price Target: $10.25
• Price Target Upside: 8.70% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 1.14
• Revenue Forecast (FY): $276.81M

• Rating: 60 Neutral
• Price Target: $10.00 ▲(6.04% Upside)
• Action: Reiterated Date: 02/10/26
• Date: Action: Reiterated 02/10/26

The score is driven primarily by middling financial performance—strong margins but pressured revenue, meaningful leverage, and volatile cash flows. This is partially supported by constructive earnings-call takeaways around the PSSL2 ramp and portfolio quality, while technicals are broadly neutral and valuation is helped by a high dividend yield alongside a moderate P/E.

Positive Factors

Conservative credit profile

A predominantly first‑lien, floating‑rate portfolio with low PIK and conservative leverage metrics gives structural downside protection. Over 2–6 months this underwriting discipline and seniority help limit loss severity during borrower stress and supports steady interest income generation.

High operating profitability

Sustained high net margins indicate the business captures attractive interest spreads and fee income relative to expenses. For a BDC, robust operating profitability provides a durable cushion for distributions and debt servicing even if top‑line growth softens over the medium term.

PSSL2 JV scale and ramp

The rapid PSSL2 joint‑venture ramp is a structural growth lever: scaling third‑party capital broadens fee and interest income without proportionally increasing balance‑sheet risk. As it reaches scale, JV run‑rate NII can structurally improve dividend coverage and enable asset sales to de‑leverage the parent.

Negative Factors

Elevated leverage

Higher debt relative to equity increases sensitivity to portfolio markdowns and rising funding costs. For a credit‑centric BDC, elevated leverage constrains flexibility to absorb losses, limits capacity to opportunistically invest, and can amplify NAV volatility over the coming quarters.

Volatile cash generation

Irregular operating and free cash flow reduces confidence in sustainable distributable earnings. Volatility in cash conversion complicates dividend coverage planning, increases reliance on capital markets or JV monetizations, and raises execution risk for financial commitments over multi‑quarter horizons.

Revenue decline and marks

A shrinking revenue base combined with recent realized/unrealized losses signals portfolio sensitivity and reduces the earnings runway. Persistent top‑line pressure and periodic markdowns can erode reserves, impair dividend sustainability, and shrink equity cushions that support leverage over the medium term.

Pennantpark Business Overview & Revenue Model

Company Description

PennantPark Floating Rate Capital Ltd. is a business development company. It seeks to make secondary direct, debt, equity, and loan investments. The fund seeks to invest through floating rate loans in private or thinly traded or small market-cap, public middle market companies. It primarily invests in the United States and to a limited extent non-U.S. companies. The fund typically invests between $2 million and $20 million. The fund also invests in equity securities, such as preferred stock, common stock, warrants or options received in connection with debt investments or through direct investments. It primarily invests between $10 million and $50 million in investments in senior secured loans and mezzanine debt. It seeks to invest in companies not rated by national rating agencies. The companies if rated would be between BB and CCC under the Standard & Poor's system. The fund invests 30% is invested in non-qualifying assets like investments in public companies whose securities are not thinly traded or do not have a market capitalization of less than $250 million, securities of middle-market companies located outside of the United States, high-yield bonds, distressed debt, private equity, securities of public companies that are not thinly traded, and investment companies as defined in the 1940 Act. Under normal conditions, the fund expects atleast 80 percent of its net assets plus any borrowings for investment purposes to be invested in Floating Rate Loans and investments with similar economic characteristics, including cash equivalents invested in money market funds. It expects to represent 65 percent of its portfolio through senior secured loans. In case of floating rate loans, it holds investments for a period of three to ten years.

How the Company Makes Money

PennantPark 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 Financial Statement Overview

Summary

Strong profitability (TTM net margin ~36%) is offset by weakening fundamentals: TTM revenue down ~18%, leverage elevated (debt-to-equity ~1.65), and an inconsistent cash-flow profile including a prior-year large negative operating/free cash flow and sharply negative TTM free cash flow growth.

Income Statement

Profitability remains a clear strength, with TTM (Trailing-Twelve-Months) net margin around 36% and strong operating profitability. However, the growth picture has weakened: TTM (Trailing-Twelve-Months) revenue declined ~18% versus modest growth in the latest annual period, and margins are well below the unusually strong 2024 level, indicating a less favorable earnings backdrop and higher sensitivity to market/portfolio conditions.

Balance Sheet

The company shows a sizable equity base (about $1.04B in the latest TTM snapshot) and mid-single-digit returns on equity (~6%). That said, leverage is notable for the profile: debt-to-equity runs around 1.65 in the most recent periods and has increased from 2023 levels, which can constrain flexibility if asset values or earnings soften.

Cash Flow

Cash generation is volatile. While TTM (Trailing-Twelve-Months) free cash flow is positive (~$100M) and tracks net income in the provided data, the prior year (2024) showed a very large negative operating/free cash flow figure, and TTM (Trailing-Twelve-Months) free cash flow growth is sharply negative. This variability reduces confidence in the durability of cash generation across cycles.

Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	145.32M	171.52M	167.82M	80.32M	41.37M	83.56M
Gross Profit	47.30M	78.29M	108.60M	42.16M	11.61M	61.91M
EBITDA	35.61M	67.50M	92.92M	37.73M	8.42M	56.92M
Net Income	34.46M	66.36M	91.84M	39.26M	3.45M	56.52M
Balance Sheet
Total Assets	2.72B	2.91B	2.11B	1.18B	1.23B	1.17B
Cash, Cash Equivalents and Short-Term Investments	95.27M	122.69M	112.05M	100.56M	51.49M	49.83M
Total Debt	1.63B	1.78B	1.18B	495.43M	672.78M	652.63M
Total Liabilities	1.68B	1.84B	1.23B	526.01M	700.38M	680.25M
Stockholders Equity	1.04B	1.07B	877.29M	653.61M	527.09M	490.61M
Cash Flow
Free Cash Flow	99.72M	95.04M	-801.38M	140.56M	-46.58M	49.80M
Operating Cash Flow	99.72M	95.04M	-801.38M	140.56M	-46.58M	49.80M
Investing Cash Flow	-203.02M	-815.62M	0.00	0.00	0.00	0.00
Financing Cash Flow	332.31M	731.22M	812.87M	-91.53M	47.70M	-56.31M

Pennantpark Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 9.43
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PFLT, the sentiment is Negative. The current price of 9.43 is above the 20-day moving average (MA) of 8.90, above the 50-day MA of 9.06, and above the 200-day MA of 9.16, indicating a bearish trend. The MACD of -0.24 indicates Positive momentum. The RSI at 36.45 is Neutral, neither overbought nor oversold. The STOCH value of 11.69 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PFLT.

Pennantpark Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
TRIN	66 Neutral	$1.14B	6.87	16.18%	13.53%	33.44%	25.22%
BCSF	62 Neutral	$852.37M	9.14	8.18%	13.18%	-26.08%	-27.65%
NMFC	61 Neutral	$841.75M	59.91	5.43%	14.17%	36.15%	-38.59%
PFLT	60 Neutral	$818.55M	23.67	3.44%	13.64%	36.91%	-48.79%
CGBD	60 Neutral	$834.74M	11.30	7.03%	13.63%	-8.23%	-35.72%
SLRC	58 Neutral	$799.23M	8.64	9.07%	10.80%	-6.30%	-6.92%

Pennantpark Corporate Events

PennantPark Shareholders Approve Directors and Auditor Ratification

At its annual meeting of stockholders held on February 3, 2026, PennantPark Floating Rate Capital Ltd. reported that shareholders elected two Class III directors, Arthur H. Penn and José A. Briones, Jr., to serve on the board until the 2029 annual meeting, with both receiving strong majorities of votes cast. Shareholders also ratified the selection of RSM US LLP as the company’s independent registered public accounting firm for the fiscal year ending September 30, 2026, signaling continued support for the firm’s leadership and governance structure as well as confidence in its financial reporting oversight.

The most recent analyst rating on (PFLT) stock is a Hold with a $10.00 price target. To see the full list of analyst forecasts on Pennantpark $ stock, see the PFLT Stock Forecast page.

PennantPark Declares February 2026 Monthly Cash Distribution

On February 3, 2026, PennantPark Floating Rate Capital Ltd. declared a monthly cash distribution for February 2026 of $0.1025 per share, payable on March 2, 2026 to shareholders of record as of February 17, 2026. The payout, expected to be sourced from taxable net investment income, underscores the business development company’s continued income-generation from its floating rate senior secured loan portfolio, while its regulated investment company status may offer certain U.S. withholding tax advantages to qualified non-U.S. investors, reinforcing the stock’s appeal to income-focused and international shareholders.

The most recent analyst rating on (PFLT) stock is a Buy with a $11.00 price target. To see the full list of analyst forecasts on Pennantpark $ stock, see the PFLT Stock Forecast page.

PennantPark Schedules Q1 2026 Results and Conference Call

On January 6, 2026, PennantPark Floating Rate Capital Ltd. announced it would report financial results for its first fiscal quarter ended December 31, 2025, after the market close on February 9, 2026, and would host a conference call the following morning, February 10, to discuss the numbers. The scheduled disclosure and investor call underscore the firm’s ongoing efforts to maintain transparency with shareholders and the broader credit market at a time when performance in the U.S. middle-market lending space remains a key focus for investors in floating-rate and senior secured debt strategies.

The most recent analyst rating on (PFLT) stock is a Hold with a $10.00 price target. To see the full list of analyst forecasts on Pennantpark $ stock, see the PFLT Stock Forecast page.

PennantPark Declares January 2026 Monthly Cash Distribution

On January 5, 2026, PennantPark Floating Rate Capital Ltd. declared a monthly cash distribution for January 2026 of $0.1025 per share, payable on February 2, 2026 to shareholders of record as of January 16, 2026, with the payment expected to be funded from taxable net investment income and its final tax characterization to be detailed on year-end tax forms and regulatory filings. As a regulated investment company, PennantPark Floating Rate Capital can generate qualified interest income and short-term capital gains that may be exempt from U.S. withholding tax for eligible non-U.S. investors, underscoring the firm’s ongoing emphasis on delivering income to shareholders and highlighting potential tax advantages for international holders under current U.S. tax law.

The most recent analyst rating on (PFLT) stock is a Hold with a $10.00 price target. To see the full list of analyst forecasts on Pennantpark $ stock, see the PFLT Stock Forecast page.

PennantPark Announces December 2025 Distribution

On December 2, 2025, PennantPark Floating Rate Capital Ltd. announced a monthly distribution of $0.1025 per share for December 2025, payable on January 2, 2026, to stockholders of record as of December 15, 2025. This distribution is expected to be paid from taxable net investment income, and the company highlights that certain portions of the distribution may be exempt from U.S. withholding tax for non-U.S. stockholders. The announcement underscores PennantPark’s commitment to providing returns to its investors while navigating tax regulations to benefit both domestic and international stakeholders.

The most recent analyst rating on (PFLT) stock is a Buy with a $11.50 price target. To see the full list of analyst forecasts on Pennantpark $ stock, see the PFLT Stock Forecast page.

Pennantpark Secures $150M Credit Agreement with Safeguards

On November 20, 2025, PSLF II SPV, LLC, a subsidiary of PennantPark Senior Secured Loan Fund II LLC, entered into a credit agreement involving various financial entities, including Goldman Sachs Bank USA and Western Alliance Trust Company N.A. The agreement allows for borrowings up to $150 million, with PennantPark Floating Rate Capital Ltd. providing a Non-Recourse Carveout Guaranty Agreement to cover specific obligations related to misconduct or financial mismanagement by involved parties. This move is significant for PennantPark as it secures substantial financing while also outlining strict conditions to safeguard against financial misdeeds, potentially impacting the company’s financial stability and stakeholder confidence.

The most recent analyst rating on (PFLT) stock is a Buy with a $11.00 price target. To see the full list of analyst forecasts on Pennantpark $ stock, see the PFLT Stock Forecast page.