Prospect Capital (PSEC) AI Stock Analysis

• Market Cap: N/A
• Dividend Yield: 19.71%
• Average Volume (3M): 3.64M
• 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: 3,722,336
• 30 Day Avg. Volume: 3,637,143
• 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: $2.50
• Price Target Upside: -5.66% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1
• EPS Forecast (FY): 0.45
• Revenue Forecast (FY): $658.59M

• Rating: 53 Neutral
• Price Target: $3.00 ▲(13.21% Upside)

Prospect Capital's overall score is primarily influenced by its financial performance challenges, including declining revenue and profitability. The earnings call provided some positive insights, particularly in net investment income and liquidity, which helped offset some financial concerns. Technical analysis and valuation present a mixed picture, with bearish trends and a high dividend yield.

Positive Factors

Effective Debt Management

Effective debt management with a focus on unsecured debt enhances financial flexibility and reduces refinancing risk, supporting long-term stability.

Robust Liquidity Position

A strong liquidity position ensures the company can meet its obligations and invest in growth opportunities, enhancing resilience in uncertain markets.

Successful Real Estate Exits

Successful real estate exits with high returns demonstrate effective asset management and contribute positively to overall portfolio performance.

Negative Factors

Declining Revenue

A significant decline in revenue indicates challenges in maintaining business growth, which could affect long-term profitability and market position.

Negative Net Profit Margin

A negative net profit margin reflects inefficiencies in cost management and revenue generation, posing risks to sustainable profitability and shareholder returns.

Low Income Yield from Real Estate

Low income yield from real estate investments suggests underperformance in this segment, potentially impacting overall income generation and investment returns.

Prospect Capital Business Overview & Revenue Model

Company Description

Prospect Capital Corporation (PSEC) is a publicly traded investment firm specializing in private equity and debt investments. The company primarily focuses on investing in middle-market companies across various sectors, including healthcare, manufacturing, and business services. Prospect Capital seeks to generate income through its investments by providing debt and equity financing, thereby supporting the growth of its portfolio companies while delivering attractive returns to its shareholders.

How the Company Makes Money

Prospect Capital generates revenue primarily through interest income and fees associated with its investments in debt and equity securities. The company invests in a diversified portfolio of private companies, providing them with loans or equity capital, which yields interest and potential capital gains. Key revenue streams include interest payments from the loans made to portfolio companies, management fees from the assets under management, and potential exit fees when investments are sold or exited. Additionally, Prospect Capital may benefit from significant partnerships with financial institutions and other entities that enhance its investment capabilities and broaden its network in sourcing quality investment opportunities.

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: Negative
• Last Price: 2.65
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PSEC, the sentiment is Negative. The current price of 2.65 is below the 20-day moving average (MA) of 2.70, below the 50-day MA of 2.68, and below the 200-day MA of 3.10, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 46.59 is Neutral, neither overbought nor oversold. The STOCH value of 22.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PSEC.

Prospect Capital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MAIN	75 Outperform	$5.05B	9.35	19.07%	7.60%	11.60%	9.38%
ARCC	74 Outperform	$13.98B	9.81	10.06%	9.33%	10.34%	-24.16%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
NMFC	66 Neutral	$935.62M	13.90	5.43%	13.40%	36.15%	-38.59%
TCPC	58 Neutral	$475.96M	―	-1.15%	22.98%	-91.81%	78.46%
PSEC	53 Neutral	―	―	-5.29%	19.71%	-49.05%	-231.10%
PNNT	48 Neutral	$405.49M	28.84	2.89%	15.56%	-35.46%	-67.15%

Prospect Capital Corporate Events

Prospect Capital’s Earnings Call Highlights Strategic Moves

The recent earnings call for Prospect Capital conveyed an optimistic sentiment, highlighting the company’s strong net investment income and strategic asset repositioning towards first-lien senior secured loans. The management emphasized effective debt management and a robust liquidity position, underscoring successful real estate exits. However, challenges such as low income yield from the real estate portfolio and significant net repayments were also acknowledged.

Prospect Capital Reports Steady Q3 2025 Earnings

Prospect Capital Corporation is a business development company that primarily focuses on lending to and investing in middle-market privately-held companies, aiming to generate both current income and long-term capital appreciation.

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.

Prospect Capital’s Earnings Call Highlights Growth and Challenges

Prospect Capital’s latest earnings call conveyed a generally positive outlook, highlighting strong net investment income and successful portfolio repositioning. The company also reported impressive real estate returns, although it acknowledged challenges such as reduced payment-in-kind income and industry-specific issues in the multifamily real estate segment.

Prospect Capital Reports Decline in Earnings and NAV

Prospect Capital Corporation is a business development company that primarily lends to and invests in middle-market privately-held companies, aiming to generate both current income and long-term capital appreciation. In its latest earnings report for the fiscal year ending June 30, 2025, Prospect Capital reported a decline in net investment income and net asset value per common share compared to the previous year. The company recorded a net investment income of $79 million for the quarter, a decrease from $102.9 million in the same quarter last year, and a net loss applicable to common shareholders of $226.4 million.

Prospect Capital Announces Dividends Amid Portfolio Optimization

On August 26, 2025, Prospect Capital announced the declaration of monthly and quarterly dividends for various classes of its preferred stock and common shareholders, reflecting its ongoing commitment to shareholder returns. The company reported financial results for the fiscal year ended June 30, 2025, highlighting a net investment income of $79 million, but also a net loss applicable to common shareholders of $226 million. Prospect Capital has been actively optimizing its portfolio by increasing its focus on first lien senior secured loans and exiting non-core investments, which has resulted in a significant reduction of its subordinated structured notes portfolio.

The most recent analyst rating on (PSEC) stock is a Sell with a $3.00 price target. To see the full list of analyst forecasts on Prospect Capital stock, see the PSEC Stock Forecast page.