Pennantpark $ (PFLT) AI Stock Analysis

• Market Cap: $926.70M
• Dividend Yield: 13.28%
• Average Volume (3M): 919.38K
• Price to Earnings (P/E): 11.2
• Beta (1Y): 0.59
• Revenue Growth: 55.25%
• EPS Growth: -47.71%
• Country: US
• Employees: N/A
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 0.25
• Shares Outstanding: 99,217,896
• 10 Day Avg. Volume: 1,218,646
• 30 Day Avg. Volume: 919,375
• PEG Ratio: 0.10
• Price to Book (P/B): 0.87
• Price to Sales (P/S): 4.08
• P/FCF Ratio: -0.95
• Enterprise Value/Market Cap: 2.50
• Enterprise Value/Revenue: 10.08
• Enterprise Value/Gross Profit: 15.10
• Enterprise Value/Ebitda: 13.61
• 1Y Price Target: $10.95
• Price Target Upside: 18.25% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 63 Neutral
• Price Target: $11.00 ▲(18.79% Upside)

PennantPark's overall score reflects strong profitability and strategic corporate actions, but is tempered by cash flow challenges and mixed technical indicators. The attractive dividend yield and recent asset acquisition are positive, yet the cash flow issues and mixed earnings call sentiment present risks.

Positive Factors

Strong Credit Metrics

Low nonaccrual rates indicate rigorous underwriting and strong credit management, enhancing long-term portfolio stability and reducing risk.

Joint Venture with Hamilton Lane

The joint venture expands investment capacity and diversifies risk, potentially increasing revenue streams and strengthening market position.

Asset Portfolio Acquisition

The acquisition optimizes the portfolio and is expected to increase net investment income, aligning with strategic growth objectives.

Negative Factors

Cash Flow Challenges

Persistent negative cash flows can strain liquidity, limiting operational flexibility and potentially impacting long-term financial health.

Net Asset Value Decline

A decline in NAV reflects potential asset valuation issues, which could impact investor confidence and future capital raising efforts.

Realized and Unrealized Losses

Losses on investments can erode shareholder value and indicate challenges in asset management, affecting long-term profitability.

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

PennantPark demonstrates strong profitability and a solid balance sheet with low leverage, but faces significant challenges with cash flow management. The income statement shows consistent revenue growth and healthy margins, but the negative cash flows pose risks to liquidity and operational flexibility.

Income Statement

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

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

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: Negative
• Last Price: 9.26
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• 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 9.26 is below the 20-day moving average (MA) of 9.93, below the 50-day MA of 10.13, and below the 200-day MA of 10.05, indicating a bearish trend. The MACD of -0.17 indicates Positive momentum. The RSI at 23.57 is Positive, neither overbought nor oversold. The STOCH value of 1.99 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
TRIN	80 Outperform	1.11B	7.23	14.05%	12.91%	31.43%	30.85%
SLRC	71 Outperform	843.41M	9.63	―	10.61%	5.87%	-12.64%
CGBD	67 Neutral	951.38M	11.32	―	13.36%	-17.05%	-40.15%
BCSF	66 Neutral	935.40M	8.73	―	12.48%	-3.29%	-16.86%
NMFC	65 Neutral	1.03B	12.78	―	13.33%	39.05%	-32.62%
PFLT	63 Neutral	$926.70M	11.20	7.37%	13.28%	55.25%	-47.71%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Pennantpark $ Corporate Events

PennantPark Announces September 2025 Distribution

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.

PennantPark Acquires $250M Asset Portfolio

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.

PennantPark Enters Joint Venture with Hamilton Lane

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.

PennantPark Announces August 2025 Monthly Distribution

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.

PennantPark to Release Q3 Earnings Results Soon

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.

PennantPark Announces July 2025 Monthly Distribution

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.