Prospect Capital (NASDAQ:PSEC) Hits New 12-Month Low - Here's Why

Key Points

• Prospect Capital (NASDAQ:PSEC) hit a new 52-week low, trading as low as $2.44 after closing at $2.75, despite unusually heavy volume.
• The latest quarter was a mixed bag: EPS beat expectations at $0.16 versus $0.11, but revenue missed estimates at $150.1 million versus $163.2 million, with weaker interest income cited as a drag.
• The company kept its monthly dividend at $0.035 per share, implying a very high yield, but analyst sentiment remains cautious with a consensus rating of Sell and a $2.50 average price target.

Prospect Capital Corporation (NASDAQ:PSEC - Get Free Report)'s stock price reached a new 52-week low during trading on Saturday . The stock traded as low as $2.44 and last traded at $2.47, with a volume of 19238067 shares traded. The stock had previously closed at $2.75.

Key Headlines Impacting 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 Ratings Changes

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

Prospect Capital Stock Performance

The company has a market capitalization of $1.20 billion, a PE ratio of -6.68 and a beta of 0.82. The business's 50-day moving average is $2.67 and its 200-day moving average is $2.70. The company has a debt-to-equity ratio of 0.62, a quick ratio of 0.74 and a current ratio of 0.74.

Prospect Capital (NASDAQ:PSEC - Get Free Report) last issued its quarterly earnings results on Thursday, May 7th. The financial services provider reported $0.16 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.11 by $0.05. Prospect Capital had a negative net margin of 10.42% and a positive return on equity of 12.00%. The company had revenue of $150.07 million during the quarter, compared to analysts' expectations of $163.23 million.

Prospect Capital Dividend Announcement

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

Insider Transactions at Prospect Capital

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

Institutional Inflows and Outflows

A number of large investors have recently added to or reduced their stakes in PSEC. Van ECK Associates Corp raised its holdings in Prospect Capital by 9.2% in the third quarter. Van ECK Associates Corp now owns 10,255,640 shares of the financial services provider's stock worth $28,203,000 after buying an additional 866,860 shares during the last quarter. GraniteShares Advisors LLC purchased a new position in Prospect Capital in the fourth quarter worth about $2,745,000. GatePass Capital LLC purchased a new position in Prospect Capital in the third quarter worth about $563,000. Tudor Investment Corp ET AL raised its holdings in Prospect Capital by 12.1% in the third quarter. Tudor Investment Corp ET AL now owns 2,604,286 shares of the financial services provider's stock worth $7,162,000 after buying an additional 282,119 shares during the last quarter. Finally, SMH Capital Advisors Inc. raised its holdings in Prospect Capital by 201.5% in the third quarter. SMH Capital Advisors Inc. now owns 438,847 shares of the financial services provider's stock worth $1,167,000 after buying an additional 293,311 shares during the last quarter. Hedge funds and other institutional investors own 9.06% of the company's stock.

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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