Prospect Capital (PSEC) AI Stock Analysis

• Market Cap: N/A
• Dividend Yield: 22.04%
• Average Volume (3M): 4.00M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.51
• Revenue Growth: -49.05%
• EPS Growth: -231.10%
• Country: US
• Employees: N/A
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 0.17
• Shares Outstanding: 470,910,980
• 10 Day Avg. Volume: 5,074,618
• 30 Day Avg. Volume: 3,999,822
• PEG Ratio: <0.01
• Price to Book (P/B): 0.30
• Price to Sales (P/S): 6.97
• P/FCF Ratio: 2.68
• Enterprise Value/Market Cap: 10.00T>
• Enterprise Value/Revenue: -80.16
• Enterprise Value/Gross Profit: -29.70
• Enterprise Value/Ebitda: -22.76
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 58 Neutral
• Price Target: $3.00 ▲(12.78% Upside)

The score is held back primarily by weak and volatile financial performance (negative TTM revenue and net income). Support comes from a stronger reported balance sheet and currently positive cash flow, constructive earnings-call commentary on portfolio repositioning and liquidity, and moderately positive technical momentum; valuation is mixed due to a very high yield but a negative P/E.

Positive Factors

Strategic Asset Repositioning

The strategic shift towards first-lien senior secured loans enhances portfolio stability and reduces risk, improving long-term financial performance.

Effective Debt Management

Issuing long-term unsecured notes at a fixed rate strengthens the balance sheet and provides financial flexibility, supporting sustainable growth.

Robust Liquidity Position

A strong liquidity position ensures the company can meet obligations and seize investment opportunities, enhancing resilience and growth potential.

Negative Factors

Declining Revenue and Profitability

Significant revenue and profitability declines indicate challenges in sustaining business operations and competitiveness, impacting long-term viability.

Negative Free Cash Flow Growth

Negative free cash flow growth suggests difficulties in generating sufficient cash to support operations and investments, limiting future expansion.

Low Income Yield from Real Estate

Low income yield from real estate investments may reduce overall returns, affecting the company's ability to generate consistent income.

Prospect Capital Business Overview & Revenue Model

Company Description

Prospect Capital Corporation is a business development company. It specializes in middle market, mature, mezzanine finance, later stage, emerging growth, leveraged buyouts, refinancing, acquisitions, recapitalizations, turnaround, growth capital, development, capital expenditures and subordinated debt tranches of collateralized loan obligations, cash flow term loans, market place lending and bridge transactions. It also makes real estate investments particularly in multi-family residential real estate asset class. The fund makes secured debt, senior debt, senior and secured term loans, unitranche debt, first-lien and second lien, private debt, private equity, mezzanine debt, and equity investments in private and microcap public businesses. It focuses on both primary origination and secondary loans/portfolios and invests in situations like debt financings for private equity sponsors, acquisitions, dividend recapitalizations, growth financings, bridge loans, cash flow term loans, real estate financings/investments. It also focuses on investing in small-sized and medium-sized private companies rather than large public companies. The fund typically invests across all industry sectors, with a particular expertise in the energy and industrial sectors. It invests in aerospace and defense, chemicals, conglomerate services, consumer services, ecological, electronics, financial services, machinery, manufacturing, media, pharmaceuticals, retail, software, specialty minerals, textiles and leather, transportation, oil and gas production, coal production, materials, industrials, consumer discretionary, information technology, utilities, pipeline, storage, power generation and distribution, renewable and clean energy, oilfield services, healthcare, food and beverage, education, business services, and other select sectors. It prefers to invest in the United States and Canada. The fund seeks to invest between $10 million to $500 million per transaction in companies with EBITDA between $5 million and $150 million, sales value between $25 million and $500 million, and enterprise value between $5 million and $1000 million. It fund also co-invests for larger deals. The fund seeks control acquisitions by providing multiple levels of the capital structure. The fund focuses on sole, agented, club, or syndicated deals.

How the Company Makes Money

Prospect Capital generates revenue through a combination of interest income, fees, and capital gains from its investments. The primary revenue stream comes from the interest earned on the debt securities it provides to portfolio companies, which typically have higher yields compared to traditional fixed-income investments. Additionally, Prospect Capital may earn fees from structuring deals and managing its investments, which can include transaction fees, monitoring fees, and exit fees when investments are sold. The company also benefits from capital gains when it realizes profits from its equity investments in the companies it finances. Strategic partnerships with other financial institutions and investment firms can enhance its deal flow and provide additional investment opportunities, further contributing to its overall earnings.

Prospect Capital Financial Statement Overview

Summary

Prospect Capital faces significant challenges in revenue and profitability, with a drastic decline in revenue and a negative net profit margin. The balance sheet shows moderate leverage but inefficiencies in generating returns. Cash flow stability is a positive aspect, though growth remains a concern.

Income Statement

Prospect Capital's income statement shows significant volatility. The company experienced a drastic decline in revenue and profitability in the most recent year, with a revenue growth rate of -66.27% and a net profit margin of -234.08%. This indicates substantial challenges in maintaining revenue and controlling costs. Historically, the company had periods of strong profitability, but recent performance raises concerns about its ability to sustain growth and profitability.

Balance Sheet

The balance sheet reflects moderate leverage with a debt-to-equity ratio of 0.45, which is manageable. However, the return on equity is negative at -10.17%, indicating inefficiencies in generating returns for shareholders. The equity ratio is relatively stable, suggesting a balanced asset structure, but the negative ROE highlights potential issues in asset utilization and profitability.

Cash Flow

Cash flow analysis shows a mixed picture. The operating cash flow to net income ratio is strong at 3.86, indicating good cash generation relative to net income. However, free cash flow growth has been negative, reflecting challenges in maintaining cash flow growth. The company has managed to maintain a positive free cash flow to net income ratio, which is a positive sign of cash flow stability despite recent declines.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	-73.23M	-276.83M	467.36M	87.30M	739.88M	1.15B
Gross Profit	-197.65M	-406.94M	320.91M	-60.90M	622.47M	1.02B
EBITDA	-257.93M	-469.92M	262.83M	-101.64M	582.58M	963.81M
Net Income	-257.93M	-469.92M	262.83M	-101.64M	582.58M	963.81M
Balance Sheet
Total Assets	6.64B	6.80B	7.86B	7.86B	7.66B	6.30B
Cash, Cash Equivalents and Short-Term Investments	86.54M	46.51M	81.90M	90.57M	31.17M	63.61M
Total Debt	0.00	2.09B	2.43B	2.58B	2.74B	2.23B
Total Liabilities	2.01B	3.82B	4.15B	4.13B	3.54B	2.36B
Stockholders Equity	4.63B	2.99B	3.71B	3.73B	4.12B	3.95B
Cash Flow
Free Cash Flow	163.55M	178.92M	282.10M	284.66M	-795.34M	31.02M
Operating Cash Flow	163.55M	178.92M	282.10M	284.66M	-795.34M	31.02M
Investing Cash Flow	464.89M	344.25M	-2.12M	-505.51M	-1.11B	-154.81M
Financing Cash Flow	-598.92M	-558.25M	-289.76M	281.13M	767.09M	-11.97M

Prospect Capital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.66
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PSEC, the sentiment is Positive. The current price of 2.66 is above the 20-day moving average (MA) of 2.58, above the 50-day MA of 2.59, and below the 200-day MA of 2.80, indicating a neutral trend. The MACD of 0.06 indicates Negative momentum. The RSI at 70.00 is Neutral, neither overbought nor oversold. The STOCH value of 84.64 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PSEC.

Prospect Capital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MAIN	77 Outperform	$5.48B	10.14	19.07%	7.17%	11.60%	9.38%
ARCC	77 Outperform	$14.77B	10.37	10.06%	9.64%	10.34%	-24.16%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
NMFC	66 Neutral	$952.13M	14.15	5.43%	14.17%	36.15%	-38.59%
PSEC	58 Neutral	―	-3.19	-5.29%	22.04%	-49.05%	-231.10%
PNNT	57 Neutral	$397.65M	12.15	6.83%	16.61%	-3.09%	200.66%
TCPC	50 Neutral	$473.41M	-52.76	-1.15%	21.13%	-91.81%	78.46%

Prospect Capital Corporate Events

Prospect Capital Declares Dividends and Reports Q3 Results

On November 6, 2025, Prospect Capital announced the declaration of monthly and quarterly dividends for various classes of its preferred stock, as well as cash distributions to common shareholders, scheduled from November 2025 through February 2026. The company reported financial results for the quarter ending September 30, 2025, highlighting a net investment income of $79.35 million and a net income of $48.09 million, reflecting a strategic shift towards first lien senior secured loans and the exit of certain non-core assets. This strategic focus is expected to enhance the company’s portfolio performance and operational efficiency.

The most recent analyst rating on (PSEC) stock is a Sell with a $2.50 price target. To see the full list of analyst forecasts on Prospect Capital stock, see the PSEC Stock Forecast page.

Prospect Capital Issues $167 Million Series A Notes

On October 30, 2025, Prospect Capital Corporation issued $167 million in 5.5% Series A Notes due 2030, under a deed of trust with Mishmeret Trust Company Ltd. The notes, which are senior unsecured obligations, will mature on December 31, 2030, and are expected to commence trading on the Tel Aviv Stock Exchange on November 2, 2025. The net proceeds of approximately $160 million will primarily be used for refinancing existing debt and maintaining balance sheet liquidity. The issuance also includes foreign exchange forward contracts to mitigate currency risk, as the notes are denominated in Israeli shekels.

The most recent analyst rating on (PSEC) stock is a Sell with a $2.50 price target. To see the full list of analyst forecasts on Prospect Capital stock, see the PSEC Stock Forecast page.

Prospect Capital Announces $167M Institutional Offering

On October 27, 2025, Prospect Capital Corporation announced the pricing of an institutional offering of approximately $167 million in 5.5% Series A Notes due 2030. The Notes, which are rated ilAA- by S&P Global Ratings Maalot Ltd., will bear interest at a rate of 5.5% per annum and are expected to commence trading on the Tel Aviv Stock Exchange on November 2, 2025. The offering, which was oversubscribed, is expected to close on October 30, 2025, and aims to refinance existing indebtedness and maintain balance sheet liquidity. This move is seen as a strategic effort to strengthen Prospect’s diversified financing sources.

The most recent analyst rating on (PSEC) stock is a Sell with a $2.50 price target. To see the full list of analyst forecasts on Prospect Capital stock, see the PSEC Stock Forecast page.