Runway Growth Finance Corp. (NASDAQ:RWAY) Given Consensus Rating of "Reduce" by Analysts

Key Points

• Analysts hold a consensus “Reduce” rating on Runway Growth Finance, with three sell, three hold and two buy recommendations. The average 12-month price target is $8.20, while the stock opened at $5.52.
• Recent analyst actions have skewed negative: Bank of America downgraded the shares to “underperform” and cut its target to $5.50, while Zacks Research moved to “strong sell.”
• Runway reported quarterly EPS of $0.29, below the $0.31 consensus estimate, but maintains a quarterly dividend of $0.33 per share, equivalent to a stated annual yield of 23.9%; institutional investors own 64.61% of the stock.

Shares of Runway Growth Finance Corp. (NASDAQ:RWAY - Get Free Report) have earned an average recommendation of "Reduce" from the eight research firms that are presently covering the firm, Marketbeat.com reports. Three analysts have rated the stock with a sell rating, three have assigned a hold rating and two have issued a buy rating on the company. The average 12 month price target among brokers that have issued ratings on the stock in the last year is $8.20.

Several analysts recently commented on the stock. Bank of America lowered shares of Runway Growth Finance from a "neutral" rating to an "underperform" rating and reduced their price objective for the company from $9.00 to $5.50 in a research note on Monday, June 15th. Wells Fargo & Company dropped their target price on shares of Runway Growth Finance to $6.50 and set an "equal weight" rating on the stock in a research note on Thursday, May 14th. Wall Street Zen cut shares of Runway Growth Finance from a "hold" rating to a "sell" rating in a report on Saturday, May 16th. Weiss Ratings cut shares of Runway Growth Finance from a "hold (c-)" rating to a "sell (d+)" rating in a report on Tuesday, June 16th. Finally, Zacks Research downgraded shares of Runway Growth Finance from a "hold" rating to a "strong sell" rating in a research report on Friday, July 10th.

Institutional Inflows and Outflows

Hedge funds have recently modified their holdings of the business. Sound Income Strategies LLC lifted its holdings in shares of Runway Growth Finance by 10.3% during the first quarter. Sound Income Strategies LLC now owns 1,843,232 shares of the company's stock valued at $12,534,000 after purchasing an additional 171,872 shares in the last quarter. North Ground Capital raised its position in Runway Growth Finance by 102.5% in the 4th quarter. North Ground Capital now owns 1,569,050 shares of the company's stock worth $14,012,000 after buying an additional 794,050 shares during the last quarter. Bulldog Investors LLP lifted its stake in Runway Growth Finance by 15.3% during the 4th quarter. Bulldog Investors LLP now owns 1,200,872 shares of the company's stock valued at $10,724,000 after acquiring an additional 159,588 shares during the period. UBS Group AG lifted its stake in Runway Growth Finance by 57.0% during the 4th quarter. UBS Group AG now owns 638,503 shares of the company's stock valued at $5,702,000 after acquiring an additional 231,744 shares during the period. Finally, Two Sigma Investments LP boosted its holdings in shares of Runway Growth Finance by 7.2% during the 3rd quarter. Two Sigma Investments LP now owns 602,410 shares of the company's stock valued at $6,120,000 after acquiring an additional 40,354 shares during the last quarter. Hedge funds and other institutional investors own 64.61% of the company's stock.

Runway Growth Finance Trading Up 1.3%

NASDAQ:RWAY opened at $5.52 on Wednesday. The firm has a market capitalization of $234.43 million, a P/E ratio of -61.33 and a beta of 0.66. The company has a debt-to-equity ratio of 1.01, a current ratio of 0.44 and a quick ratio of 0.44. Runway Growth Finance has a one year low of $5.19 and a one year high of $11.20. The company's 50-day simple moving average is $5.78 and its 200 day simple moving average is $7.01.

Runway Growth Finance (NASDAQ:RWAY - Get Free Report) last released its earnings results on Thursday, May 7th. The company reported $0.29 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.31 by ($0.02). Runway Growth Finance had a negative net margin of 2.00% and a positive return on equity of 10.87%. The business had revenue of $29.45 million for the quarter, compared to analysts' expectations of $29.46 million. As a group, analysts forecast that Runway Growth Finance will post 1.22 EPS for the current fiscal year.

Runway Growth Finance Dividend Announcement

The firm also recently announced a quarterly dividend, which was paid on Tuesday, June 2nd. Shareholders of record on Monday, May 18th were paid a dividend of $0.33 per share. This represents a $1.32 annualized dividend and a yield of 23.9%. The ex-dividend date was Monday, May 18th. Runway Growth Finance's dividend payout ratio (DPR) is currently -1,466.67%.

About Runway Growth Finance

Runway Growth Finance, Inc is a publicly traded business development company that provides customized debt and equity financing solutions to high‐growth, venture‐backed companies. The firm specializes in structuring senior secured loans, unitranche facilities, second‐lien financings, convertible notes and equity co‐investments designed to extend the cash runway for late‐stage companies. Runway’s flexible capital offerings are aimed at supporting technology, life sciences and other innovation‐driven sectors as they pursue growth initiatives and prepare for liquidity events.

Originally launched in 2017 under the name Saratoga Investment Corp., the company rebranded as Runway Growth Finance in 2020 following the acquisition of an established middle‐market credit manager.

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