Horizon Technology Finance (NASDAQ:HRZN) Posts Quarterly Earnings Results, Misses Estimates By $0.61 EPS

Key Points

• Quarterly results missed expectations: Horizon reported EPS of -$0.43 versus consensus of $0.18 and revenue of $24.06 million, below estimates of $25.12 million.
• Portfolio grew, and investment income covered distributions: The company funded nine investments totaling $98 million, while net investment income of $0.19 per share exceeded its declared $0.18 quarterly distribution.
• Credit stress weighed on net asset value: NAV fell to $5.56 per share from $6.23, mainly due to write-downs on stressed investments; management said most or all credits in active workouts were on non-accrual.

Horizon Technology Finance (NASDAQ:HRZN - Get Free Report) issued its quarterly earnings data on Thursday. The investment management company reported ($0.43) earnings per share (EPS) for the quarter, missing the consensus estimate of $0.18 by ($0.61), FiscalAI reports. Horizon Technology Finance had a return on equity of 11.15% and a net margin of 5.27%. The business had revenue of $24.06 million for the quarter, compared to analyst estimates of $25.12 million.

Here are the key takeaways from Horizon Technology Finance's conference call:

• Pipeline and portfolio expanded: Horizon funded nine investments totaling $98 million and ended its fourth consecutive quarter of debt portfolio growth at $650 million. Its committed, approved, and awarded backlog rose to $351 million, though many commitments depend on companies meeting milestones.
• Income covered the declared distribution: Third-quarter net investment income was $0.19 per share, above the $0.18 in quarterly distributions declared for January through March 2027. However, NII was below $0.32 per share a year earlier.
• Credit stress drove a sharp NAV decline: NAV fell to $5.56 per share from $6.23 in the prior quarter, mainly due to write-downs on stressed investments; management said most, if not all, of the credits in active workout processes are on non-accrual.
• Strong liquidity and share repurchases: The company reported $211 million of available liquidity and net leverage of 0.82x, and repurchased just over 2 million shares at an average $4.90 during the quarter.
• Venture market remains uneven: Management cited strong overall venture investment, largely concentrated in AI, while exits for non-AI companies remain muted. It expects lower loan prepayment activity in Q4 than in Q3 and described the origination pipeline as strong but fluid.

Horizon Technology Finance Price Performance

Horizon Technology Finance stock traded down $0.07 during midday trading on Thursday, reaching $3.96. The stock had a trading volume of 703,172 shares, compared to its average volume of 818,455. Horizon Technology Finance has a twelve month low of $3.77 and a twelve month high of $6.85. The firm has a market cap of $265.44 million, a price-to-earnings ratio of 11.00 and a beta of 1.00. The firm's fifty day simple moving average is $4.49 and its two-hundred day simple moving average is $4.77.

Analyst Upgrades and Downgrades

Several brokerages have weighed in on HRZN. Weiss Ratings downgraded Horizon Technology Finance from a "sell (d+)" rating to a "sell (d)" rating in a research note on Wednesday, August 19th. UBS Group increased their price target on Horizon Technology Finance from $4.25 to $4.50 and gave the stock a "neutral" rating in a research note on Tuesday, September 1st. Oppenheimer lowered their price target on Horizon Technology Finance from $6.00 to $5.00 and set a "market perform" rating on the stock in a report on Friday, August 7th. Keefe, Bruyette & Woods reduced their price objective on shares of Horizon Technology Finance from $5.00 to $4.50 and set a "market perform" rating for the company in a report on Friday, August 21st. Finally, Compass Point started coverage on Horizon Technology Finance in a research report on Thursday, August 27th. They issued a "buy" rating and a $5.50 target price for the company. One analyst has rated the stock with a Buy rating, five have given a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat.com, Horizon Technology Finance presently has a consensus rating of "Hold" and a consensus price target of $5.00.

About Horizon Technology Finance

Horizon Technology Finance Corporation NASDAQ: HRZN is a specialty finance company that has elected to be regulated as a business development company. It provides secured venture loans to development-stage companies backed by venture capital or private equity investors.

The company primarily finances businesses in the technology, life sciences, healthcare information and sustainability sectors. Its lending solutions are designed to support needs such as product development, commercialization, acquisitions, working capital and other corporate purposes.

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