Prospect Capital (NASDAQ:PSEC) Announces Quarterly Earnings Results, Beats Estimates By $0.05 EPS

Key Points

• Prospect Capital beat quarterly earnings expectations, reporting EPS of $0.16 versus the $0.11 consensus estimate. Net investment income came in at $78.5 million, or $0.16 per share.
• Revenue for the quarter was $150.1 million, which missed analyst expectations of $163.2 million. That shortfall helped weigh on the stock, which fell about 10.2% to $2.47 in Friday trading.
• The company reaffirmed a monthly dividend of $0.035 per share, implying a very high annualized yield of roughly 17.0%. This may continue to attract income-focused investors despite the negative payout ratio.

Prospect Capital (NASDAQ:PSEC - Get Free Report) posted its earnings results on Thursday. The financial services provider reported $0.16 earnings per share for the quarter, topping analysts' consensus estimates of $0.11 by $0.05, Zacks reports. Prospect Capital had a negative net margin of 10.42% and a positive return on equity of 12.00%. The business had revenue of $150.07 million for the quarter, compared to analyst estimates of $163.23 million.

Prospect Capital Stock Down 10.2%

PSEC traded down $0.28 during midday trading on Friday, reaching $2.47. The company's stock had a trading volume of 19,238,067 shares, compared to its average volume of 4,932,093. The firm has a market capitalization of $1.20 billion, a price-to-earnings ratio of -6.68 and a beta of 0.82. The company has a current ratio of 0.74, a quick ratio of 0.74 and a debt-to-equity ratio of 0.62. Prospect Capital has a 1 year low of $2.44 and a 1 year high of $3.77. The stock's 50-day moving average is $2.67 and its 200-day moving average is $2.70.

Prospect Capital Announces Dividend

The firm also recently disclosed a monthly dividend, which will be paid on Thursday, September 17th. Investors of record on Thursday, August 27th will be paid a dividend of $0.035 per share. The ex-dividend date of this dividend is Thursday, August 27th. This represents a c) annualized dividend and a yield of 17.0%. Prospect Capital's payout ratio is presently -145.95%.

Trending Headlines about Prospect Capital

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

• Positive Sentiment: Prospect Capital reported quarterly EPS of $0.16, beating the $0.11 analyst consensus, and net investment income of $78.5 million, or $0.16 per share, which also supported results. Prospect Capital Announces March 2026 Results
• Positive Sentiment: The company reiterated its monthly dividend of $0.035 per share, implying a very high annualized yield, which may appeal to income-focused investors. Prospect Capital Reports Quarterly Results and Declares Distributions
• Positive Sentiment: The company also launched a new preferred equity distribution program, which could provide another funding avenue and support capital flexibility. Prospect Capital Launches New Preferred Equity Distribution Program
• Neutral Sentiment: Management discussed the quarter in its earnings call and transcript, but no major additional surprise appears to be driving sentiment beyond the reported numbers. Prospect Capital Corporation (PSEC) Q3 2026 Earnings Call Transcript
• Negative Sentiment: Revenue came in below expectations at $150.1 million versus the $163.2 million estimate, and interest income disappointed, which is likely weighing on the stock. Prospect Capital Q3 net investment income beats, but interest income disappoints

Analyst Upgrades and Downgrades

PSEC has been the topic of a number of research analyst reports. Weiss Ratings reissued a "sell (d)" rating on shares of Prospect Capital in a research note on Tuesday, April 21st. Wall Street Zen downgraded Prospect Capital from a "buy" rating to a "hold" rating in a research report on Saturday, February 14th. Two research analysts have rated the stock with a Sell rating, According to data from MarketBeat.com, the stock has an average rating of "Sell" and a consensus target price of $2.50.

Insider Activity

In related news, COO M Grier Eliasek acquired 942,800 shares of Prospect Capital stock in a transaction that occurred on Wednesday, February 11th. The stock was bought at an average price of $2.92 per share, with a total value of $2,752,976.00. Following the transaction, the chief operating officer directly owned 3,443,930 shares in the company, valued at approximately $10,056,275.60. This represents a 37.69% increase in their ownership of the stock. The acquisition was disclosed in a legal filing with the SEC, which can be accessed through the SEC website. Insiders own 0.03% of the company's stock.

Hedge Funds Weigh In On Prospect Capital

Several institutional investors and hedge funds have recently modified their holdings of PSEC. Schonfeld Strategic Advisors LLC bought a new position in Prospect Capital in the 4th quarter worth about $28,000. Boothbay Fund Management LLC purchased a new stake in Prospect Capital during the 4th quarter valued at about $33,000. Northwestern Mutual Wealth Management Co. increased its stake in Prospect Capital by 381.5% during the 4th 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. NewEdge Advisors LLC raised its holdings in Prospect Capital by 115,766.7% in the fourth quarter. NewEdge Advisors LLC now owns 13,904 shares of the financial services provider's stock worth $36,000 after buying an additional 13,892 shares during the last quarter. Finally, WealthPLAN Partners LLC purchased a new position in Prospect Capital in the fourth quarter worth about $40,000. 9.06% of the stock is currently owned by institutional investors.

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.

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