Prospect Capital (NASDAQ:PSEC) Posts Quarterly Earnings Results, Beats Estimates By $0.04 EPS

Prospect Capital (NASDAQ:PSEC) posted its quarterly earnings data on Thursday. The financial services provider reported $0.15 EPS for the quarter, topping analysts’ consensus estimates of $0.11 by $0.04, Zacks reports. The firm had revenue of $155.76 million for the quarter, compared to analyst estimates of $149.80 million. Prospect Capital had a positive return on equity of 12.03% and a negative net margin of 10.42%.

Prospect Capital Price Performance

Prospect Capital stock opened at $2.28 on Friday. The firm has a market cap of $1.14 billion, a P/E ratio of -6.16 and a beta of 0.79. The company has a debt-to-equity ratio of 0.59, a current ratio of 0.79 and a quick ratio of 0.79. Prospect Capital has a one year low of $2.11 and a one year high of $3.13. The stock’s 50 day moving average is $2.24 and its 200 day moving average is $2.47.

Prospect Capital Announces Dividend

The business also recently disclosed a monthly dividend, which will be paid on Wednesday, November 18th. Stockholders of record on Wednesday, October 28th will be given a dividend of $0.035 per share. This represents a c) dividend on an annualized basis and a dividend yield of 18.4%. The ex-dividend date is Wednesday, October 28th. Prospect Capital’s dividend payout ratio (DPR) is -113.51%.

Insider Transactions at Prospect Capital

In other Prospect Capital news, CEO John F. Barry purchased 1,067,648 shares of the company’s stock in a transaction on Tuesday, June 23rd. The shares were purchased at an average cost of $2.27 per share, with a total value of $2,423,560.96. Following the completion of the purchase, the chief executive officer owned 89,213,725 shares in the company, valued at $202,515,155.75. This represents a 1.21% increase in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Insiders purchased 2,500,648 shares of company stock valued at $5,678,121 over the last quarter. 0.03% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Prospect Capital

A number of institutional investors have recently modified their holdings of PSEC. Raymond James Financial Inc. lifted its holdings in shares of Prospect Capital by 0.5% during the 2nd quarter. Raymond James Financial Inc. now owns 844,465 shares of the financial services provider’s stock worth $2,685,000 after acquiring an additional 3,880 shares during the last quarter. BI Asset Management Fondsmaeglerselskab A S increased its stake in Prospect Capital by 1.3% in the second quarter. BI Asset Management Fondsmaeglerselskab A S now owns 520,592 shares of the financial services provider’s stock valued at $1,655,000 after acquiring an additional 6,516 shares during the last quarter. BNP Paribas Financial Markets raised its position in Prospect Capital by 1.8% during the third quarter. BNP Paribas Financial Markets now owns 504,342 shares of the financial services provider’s stock valued at $1,387,000 after purchasing an additional 9,008 shares in the last quarter. Northwestern Mutual Wealth Management Co. raised its position in Prospect Capital by 381.5% during the fourth quarter. Northwestern Mutual Wealth Management Co. now owns 12,687 shares of the financial services provider’s stock valued at $33,000 after purchasing an additional 10,052 shares in the last quarter. Finally, Schonfeld Strategic Advisors LLC bought a new stake in Prospect Capital during the fourth quarter worth about $28,000. 9.06% of the stock is owned by institutional investors and hedge funds.

Key Prospect Capital News

Here are the key news stories impacting Prospect Capital this week:

• Positive Sentiment: Quarterly earnings and revenue exceeded expectations. Prospect reported net investment income of $0.15 per share, above the $0.11 analyst consensus, while total investment income reached $155.8 million versus estimates of $149.8 million. Prospect Capital Announces June 2026 Results
• Positive Sentiment: Monthly dividend payments were maintained. PSEC declared $0.035 per share monthly dividends for September, October and November, representing an annualized yield of approximately 18.4% based on the cited stock price. The income remains a key attraction for investors in the business development company.
• Positive Sentiment: Liquidity and a portfolio-company sale provide financial flexibility. Cash plus undrawn revolving credit commitments totaled $1.60 billion, and the July sale of Valley Electric generated approximately $328 million in total consideration.
• Positive Sentiment: Prospect’s affiliated Enhanced Yield Fund reported strong performance. Prospect Enhanced Yield Fund (PAYIX) returned 7.61% in its first year, outperforming comparable credit benchmarks by 257 basis points. While PAYIX is not PSEC’s stock, the result may reinforce investor confidence in Prospect’s credit-investment platform. Prospect Enhanced Yield Fund Benchmark Outperformance
• Neutral Sentiment: Fiscal 2026 results and the Form 10-K were released as scheduled. Management also held an earnings conference call, giving investors additional information on portfolio credit quality, originations and strategy.
• Negative Sentiment: Net asset value declined materially. PSEC reported a $38.1 million net loss, or $0.08 per share, for the quarter. Net realized and unrealized investment losses totaled $83.8 million, pushing NAV per share down to $5.71 from $6.05 in the prior quarter.
• Negative Sentiment: Core income softened. Net investment income fell from $78.5 million, or $0.16 per share, in the prior quarter to $77.7 million, or $0.15 per share, raising concerns about earnings and dividend coverage despite the headline beat.

Analyst Ratings Changes

Several equities analysts have recently commented on the stock. Wall Street Zen upgraded shares of Prospect Capital from a “hold” rating to a “buy” rating in a research report on Sunday, June 21st. Wells Fargo & Company decreased their price objective on shares of Prospect Capital from $2.50 to $2.00 and set an “underweight” rating on the stock in a research note on Tuesday, May 12th. Finally, Weiss Ratings upgraded shares of Prospect Capital from a “sell (d)” rating to a “sell (d+)” rating in a research report on Friday, May 29th. Two analysts have rated the stock with a Sell rating, According to MarketBeat, the stock presently has an average rating of “Sell” and an average price target of $2.00.

About Prospect Capital

Prospect Capital Corporation is a publicly traded business development company listed on the Nasdaq stock exchange that specializes in providing private debt and equity financing solutions to middle-market companies across the United States. Structured as a closed-end, non-diversified management investment company under the Investment Company Act of 1940, Prospect Capital offers investors access to a diversified portfolio of senior secured loans, subordinated debt and selective equity interests in privately held businesses.

Since its founding in 2004, Prospect Capital has focused on tailoring financing structures to meet the growth, acquisition and recapitalization needs of its portfolio companies.