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WhiteHorse Finance (WHF)
NASDAQ:WHF
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WhiteHorse
(NASDAQ:WHF)
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Rating:61Neutral
Price Target:
$7.50
▲(9.17% Upside)
Action:ReiteratedDate:12/30/25
WHF’s score is supported primarily by strong cash flow generation and recent revenue momentum, but is held back by weaker technical trend signals and a negative earnings-call backdrop (lower NII, NAV decline, portfolio losses, and a distribution reset). Valuation is mixed: a moderate P/E and very high yield help, but sustainability concerns temper the benefit.
Positive Factors
Strong Cash Flow
Consistent positive cash flow indicates effective cash generation from operations, ensuring liquidity and operational efficiency, which supports long-term stability.
No Debt Burden
Having no debt enhances financial flexibility and reduces risk, allowing the company to better navigate economic fluctuations and invest in growth opportunities.
Strong Portfolio Structure
A high percentage of secured, senior loans in the portfolio reduces risk and enhances the likelihood of recovering investments, supporting long-term financial health.
Negative Factors
Revenue Fluctuations
Fluctuating revenue streams can lead to uncertainty in financial performance, impacting the company's ability to plan and invest for future growth.
Increase in Nonaccrual Investments
Rising nonaccrual investments indicate potential credit quality issues, which can affect income stability and asset valuations, posing long-term risks.
Decline in Net Asset Value
A declining NAV suggests asset devaluation, which can undermine investor confidence and impact the company's ability to raise capital or expand its portfolio.
WhiteHorse (WHF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$146.43M
Dividend Yield21.24%
Average Volume (3M)104.49K
Price to Earnings (P/E)14.9
Beta (1Y)0.31
Revenue Growth-55.82%
EPS Growth-4.97%
CountryUS
Employees3
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)0.29
Shares Outstanding23,243,088
10 Day Avg. Volume99,083
30 Day Avg. Volume104,490
Financial Highlights & Ratios
PEG Ratio-0.45
Price to Book (P/B)0.79
Price to Sales (P/S)13.16
P/FCF Ratio2.86
Enterprise Value/Market Cap2.96
Enterprise Value/Revenue8.44
Enterprise Value/Gross Profit16.46
Enterprise Value/Ebitda26.78
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.04
Revenue Forecast (FY)$66.67M
WhiteHorse Business Overview & Revenue Model
Company DescriptionWhiteHorse Finance, Inc. is business development company, non-diversified, closed end management company specializing in originating senior secured loans, lower middle market, growth capital industries. It prefers to invest in United States. It typically invests between $5 million to $25 million in companies having enterprise value of between $50 million and $350 million.
How the Company Makes MoneyWhiteHorse Finance makes money through the interest and fees generated from the loans it extends to small and middle-market businesses. The company earns interest income from its loan portfolio, which typically consists of senior secured loans that offer a favorable risk-return profile. Additionally, WHF may generate revenue through equity investments in certain portfolio companies, which can provide capital appreciation and dividend income. The company benefits from its strategic partnerships with other financial institutions and sponsors, which can enhance deal flow and investment opportunities. Furthermore, WhiteHorse Finance's focus on maintaining a diversified portfolio helps mitigate risk and stabilize earnings.
WhiteHorse Earnings Call Summary
Earnings Call Date:Mar 02, 2026
(Q4-2025)
| Next Earnings Date:May 12, 2026
Earnings Call Sentiment Neutral
The call presented a mix of constructive operational and capital-management actions — quarter-over-quarter NII growth (~8.2%), a NAV increase (~2.4%), accretive share repurchases, adviser fee relief and an accretive STRS JV — alongside credit realizations, yield compression and continued market skepticism evidenced by a large discount to NAV and a thinner near-term pipeline. Management has taken active steps to support distributions and shareholder value, but material realized losses, some post-quarter credit deterioration and the persistent share-price discount temper enthusiasm.Q4-2025 Updates
Positive Updates
Improved Quarterly Earnings
Q4 GAAP and core net investment income rose to $6.6 million ($0.287 per share) from $6.1 million ($0.263 per share) in Q3, an increase of approximately 8.2% quarter-over-quarter.
NAV Increase and Accretive Share Repurchases
NAV per share increased to $11.68 from $11.41 at the end of Q3, a ~2.4% increase, supported by repurchases of ~1 million shares for ~$7.4 million that were accretive to NAV by ~$0.184 per share; total repurchase authorization increased to $22.5 million with ~$15 million available.
Maintained Base Dividend and Supplemental Distribution
Board declared a continuing base quarterly distribution of $0.25 per share and paid a Q4 special distribution of $0.035 per share; for Q1 2026 the company declared a $0.01 supplemental distribution in addition to the $0.25 base dividend.
Successful CLO Securitization and Fee Reduction
Completed a term debt securitization (CLO) including $164 million of AAA notes at 3-month SOFR + 170 bps to improve leverage cost/stability; adviser voluntarily reduced incentive fee on NII from 20% to 17.5% for the recent quarter and Q1 2026, reducing incentive fees by ~ $200,000 in Q4.
High-Quality Portfolio Composition
At quarter end 99.7% of the debt portfolio was first lien, senior secured; risk ratings improved with ~85.9% of positions rated 1 or 2 (up from 81.8%); nonaccruals (ex-JV) were modest at 2.4% of the debt portfolio (fair value).
Active Deployment and Portfolio Growth
Gross capital deployments were $77.1 million in Q4 (7 new originations totaling $64 million), offset by $49.6 million of repayments/sales, resulting in net deployments of $27.5 million; total investments increased $10.2 million to $578.6 million.
STRS JV Accretive and Stable
STRS JV fair value was $323.6 million with an average effective yield of 9.9%; the BDC's equity investment in the JV generated low-teens return on equity and recognized ~$3.8 million of income in Q4 (vs. $3.6M in Q3); JV leverage decreased to 1.07x from 1.24x.
Healthy Regulatory and Liquidity Metrics
Asset coverage ratio was 179.1% (above the 150% regulatory minimum); cash resources were $29.7 million (including $22.7 million restricted); undistributed taxable income (spillover) estimated at ~$27.6 million (pro forma ~$21.6M after January 2026 distribution).
Negative Updates
Realized Losses and Credit Conversions
Q4 recognized approximately $11.3 million in net realized losses (notably an $11.2 million loss from Aspect Software restructuring/exit and $0.5 million from Therm-O-Disc), reflecting conversion of previously marked unrealized losses into realized losses.
Yield Compression on Portfolio
Weighted average effective yield on income-producing debt investments declined to 11.0% from 11.6% (down 0.6 percentage points) and overall portfolio yield fell to 9.1% from ~9.5% (down 0.4 percentage points), largely due to lower spreads and base rates.
Ongoing Credit Weakness and Expected Markdowns
Post-quarter developments include negative trends at Honors Holdings (expected markdown in Q1 2026), an Outward Hound sale below Q4 marks with an anticipated recovery gap of ~ $3 million, and partial exits of Lumen LATAM at values below Q4 marks.
Persistent Large Discount to NAV
Shares continue to trade at a persistent, material discount to NAV (management referenced ~40%+ discounts in Q&A), prompting reliance on opportunistic buybacks but reflecting investor skepticism about valuation and/or portfolio marks.
Pipeline and Origination Headwinds
Management reported a lower-than-normal pipeline for this time of year (only 5 new mandates, all sponsor deals), signaling constrained near-term originations despite expectations for improved M&A activity in 2026.
Higher Leverage and Slightly Reduced Debt Flexibility
Net effective debt-to-equity ratio increased to ~1.15x from 1.07x in the prior quarter; STRS JV remaining capacity and BDC buyback-related capital availability were noted as limited (BDC buyback capacity limited; JV remaining capacity pro forma ~ $35 million).
Concentration and Subordination Considerations
While the STRS JV is accretive, skeptics noted that the BDC's position is equity/subordinated behind JV leverage; a portion of returns depends on JV performance and the market may apply haircuts for perceived subordination risk.
Company Guidance
The company guided that the Board declared a Q1 2026 base dividend of $0.25 per share plus a $0.01 supplemental distribution, with supplemental payouts determined as the lesser of 50% of quarterly earnings in excess of the base (earnings = NII) and an amount that would cause no more than a $0.15 per‑share NAV decline over the current and prior quarter; management expects roughly 30% of the portfolio could repay in 2026 (consistent with a 3–3.5 year loan life) and noted a below‑normal pipeline today (five sponsored mandates priced at SOFR +4.50–5.50%, nonsponsor pricing generally SOFR +600 bps+). Capital activity/returns guidance includes continued opportunistic buybacks (Q4 repurchased ~1.0M shares for ~$7.4M, accretive to NAV by ≈$0.184/sh; buyback authorization increased by $7.5M to $22.5M with ≈$15M remaining), continued use of the STRS JV (JV fair value $323.6M, avg. yield 9.9%, leverage 1.07x, JV income ≈$3.8M in Q4), and a recent CLO-style securitization (≈$164M AAA notes at 3‑month SOFR +170 bps). They also noted a voluntary adviser incentive fee cut from 20% to 17.5% for Q4 and Q1 (reducing fees by ≈$200k in Q4), Q4 GAAP/core NII of $6.6M or $0.287/sh (vs Q3 $6.1M/$0.263), NAV $11.68 (up from $11.41, +≈2.4%), weighted avg. effective yield on income‑producing debt 11.0% (down from 11.6%) and on the overall portfolio 9.1% (down from 9.5%), total investments $578.6M, cash resources ≈$29.7M (incl. $22.7M restricted), asset coverage 179.1% (vs 150% minimum), net effective debt‑to‑equity ≈1.15x (vs 1.07x prior), and undistributed taxable income ("spillover") ≈$27.6M (pro forma ≈$21.6M after the January distribution).WhiteHorse Financial Statement Overview
Summary
Strong cash generation is the main positive (TTM operating cash flow and free cash flow of $92.3M, both above TTM net income of $9.9M). Revenue rebounded sharply in TTM (+40.8%), but results are volatile year to year and the balance-sheet leverage picture is inconsistent (TTM shows no debt vs. meaningful leverage in prior years), which reduces confidence in durability.Income Statement
TTM (Trailing-Twelve-Months) revenue rebounded strongly (+40.8%), and profitability remains positive with TTM net income of $9.9M. However, results are volatile across years: annual revenue swung from $55.6M (2023) to $17.1M (2024), and several margin fields look inconsistent across periods (e.g., unusually high/zero/negative margins), which reduces confidence in trend quality despite the recent top-line acceleration.72
Positive
Balance Sheet
Leverage appears to have improved materially in TTM (Trailing-Twelve-Months) with total debt shown at $0 and a debt-to-equity ratio of 0.0, alongside $265.2M of equity on $626.0M of assets. That said, prior years show meaningful leverage (debt-to-equity ~1.2–1.36 from 2020–2024), so the sharp change creates uncertainty about durability; returns on equity are moderate (about 3.8% in 2024 and 6.0% in TTM).58
Neutral
Cash Flow
Cash generation is a clear strength: TTM (Trailing-Twelve-Months) operating cash flow and free cash flow were both $92.3M, exceeding the TTM net income level, indicating strong cash conversion. The main weakness is growth variability, with TTM free cash flow down 13.6% versus the prior period after a stronger 2023, suggesting cash flows can fluctuate meaningfully year to year.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 51.42M | 17.09M | 55.60M | 43.29M | 51.95M | 49.14M |
| Gross Profit | 26.36M | 17.09M | 25.68M | 21.35M | 35.35M | 36.02M |
| EBITDA | 16.20M | 11.97M | 21.38M | 16.71M | 31.10M | 32.43M |
| Net Income | 9.86M | 10.85M | 20.41M | 15.68M | 30.09M | 31.68M |
Balance Sheet | ||||||
| Total Assets | 626.00M | 676.82M | 730.75M | 796.47M | 851.02M | 718.99M |
| Cash, Cash Equivalents and Short-Term Investments | 45.65M | 12.42M | 10.75M | 9.51M | 12.19M | 8.06M |
| Total Debt | 323.53M | 353.12M | 386.45M | 440.43M | 475.96M | 384.88M |
| Total Liabilities | 360.76M | 390.69M | 413.98M | 464.09M | 501.27M | 406.09M |
| Stockholders Equity | 265.25M | 286.13M | 316.77M | 332.39M | 349.75M | 312.90M |
Cash Flow | ||||||
| Free Cash Flow | 92.32M | 78.76M | 90.37M | 29.00M | 30.34M | 24.34M |
| Operating Cash Flow | 92.32M | 78.76M | 90.37M | 29.00M | 30.34M | 24.34M |
| Investing Cash Flow | 5.07M | 0.00 | 0.00 | 42.99M | -120.53M | -88.94M |
| Financing Cash Flow | -72.11M | -75.40M | -92.13M | -68.49M | 97.01M | 52.98M |
WhiteHorse Technical Analysis
Negative
6.87
Price Trends
6.76
Negative
6.82
Negative
7.36
Negative
Market Momentum
-0.14
Positive
37.09
Neutral
42.20
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WHF, the sentiment is Negative. The current price of 6.87 is above the 20-day moving average (MA) of 6.48, above the 50-day MA of 6.76, and below the 200-day MA of 7.36, indicating a bearish trend. The MACD of -0.14 indicates Positive momentum. The RSI at 37.09 is Neutral, neither overbought nor oversold. The STOCH value of 42.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WHF.
WhiteHorse Risk Analysis
WhiteHorse disclosed 106 risk factors in its most recent earnings report. WhiteHorse 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
WhiteHorse Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $198.61M | 8.82 | 8.45% | ― | 2.70% | 100.41% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $147.16M | 10.41 | 7.87% | 16.60% | -5.23% | 193.87% | |
61 Neutral | $146.43M | 14.85 | 3.51% | 21.24% | -55.82% | -4.97% | |
55 Neutral | $127.18M | -30.35 | -2.25% | 14.03% | -34.92% | -132.22% | |
45 Neutral | $87.63M | -11.34 | -5.98% | 22.43% | 47.01% | -179.46% |
* Financial Sector Average
WHF
WhiteHorse
6.30
-3.04
-32.55%
BCIC
BCP Investment Corporation
11.25
-4.16
-27.00%
MRCC
Monroe Capital
5.87
-1.61
-21.52%
NXDT
NexPoint Diversified Real Estate Trust
4.45
0.42
10.29%
GECC
Great Elm Capital
6.26
-3.43
-35.40%
SWKH
SWK Holdings
16.42
3.26
24.77%
WhiteHorse Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
WhiteHorse Announces Q3 Earnings and Stock Buyback
Negative
Nov 10, 2025
On November 10, 2025, WhiteHorse Finance, Inc. announced its third-quarter earnings results, revealing a decrease in total investment income and net investment income compared to the previous quarter. The company declared a quarterly distribution of $0.25 per share and initiated a stock repurchase program of up to $15 million. The company is focusing on repositioning its portfolio and addressing underperforming investments to enhance long-term shareholder value. Additionally, WhiteHorse Advisers agreed to reduce the incentive fee on net investment income for the next two fiscal quarters.
The most recent analyst rating on (WHF) stock is a Sell with a $6.50 price target. To see the full list of analyst forecasts on WhiteHorse stock, see the WHF Stock Forecast page.
DividendsFinancial Disclosures
WhiteHorse Announces Special Distribution for Shareholders
Neutral
Oct 15, 2025
On October 15, 2025, WhiteHorse Finance, Inc. announced a special distribution of $0.035 per share, payable on December 10, 2025, to stockholders of record as of October 31, 2025. Additionally, the company will release its third quarter financial results for the period ended September 30, 2025, on November 10, 2025, with a conference call scheduled to discuss the results.
The most recent analyst rating on (WHF) stock is a Sell with a $6.50 price target. To see the full list of analyst forecasts on WhiteHorse stock, see the WHF Stock Forecast page.
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.