Runway Growth Finance Corp. (NASDAQ:RWAY) Receives Average Recommendation of "Hold" from Brokerages

Key Points

• Analysts give Runway Growth Finance an average recommendation of Hold (1 sell, 4 hold, 2 buy) with a 12‑month average price target of $9.00, and several firms have recently cut targets (JPMorgan to $7, B. Riley to $10, Wells Fargo to $7).
• The company pays a quarterly $0.33 dividend (annualized $1.32) for a 19.5% yield, but the payout ratio of 143.48% indicates the dividend may be unsustainably high.
• Runway missed the quarter (EPS $0.32 vs. $0.36 expected; revenue $30.04M vs. $31.60M) and trades around $6.77 with a 52‑week range of $6.37–$11.40, a market cap of ~$244.6M and a P/E of 7.36.

Shares of Runway Growth Finance Corp. (NASDAQ:RWAY - Get Free Report) have earned an average recommendation of "Hold" from the seven ratings firms that are covering the company, MarketBeat Ratings reports. One research analyst has rated the stock with a sell recommendation, four have issued a hold recommendation and two have issued a buy recommendation on the company. The average 12 month price objective among analysts that have updated their coverage on the stock in the last year is $9.00.

RWAY has been the topic of several recent research reports. JPMorgan Chase & Co. cut their target price on Runway Growth Finance from $9.50 to $7.00 and set a "neutral" rating on the stock in a report on Friday, March 13th. Zacks Research lowered Runway Growth Finance from a "hold" rating to a "strong sell" rating in a report on Tuesday, March 17th. B. Riley Financial cut their target price on Runway Growth Finance from $12.00 to $10.00 and set a "buy" rating on the stock in a report on Tuesday, March 17th. Wells Fargo & Company cut their target price on Runway Growth Finance from $10.00 to $7.00 and set an "equal weight" rating on the stock in a report on Monday, March 16th. Finally, Wall Street Zen lowered Runway Growth Finance from a "hold" rating to a "sell" rating in a report on Saturday.

Runway Growth Finance Price Performance

NASDAQ RWAY opened at $6.77 on Monday. Runway Growth Finance has a fifty-two week low of $6.37 and a fifty-two week high of $11.40. The stock's 50-day moving average is $7.45 and its two-hundred day moving average is $8.70. The company has a debt-to-equity ratio of 0.93, a current ratio of 1.05 and a quick ratio of 1.05. The firm has a market cap of $244.60 million, a P/E ratio of 7.36 and a beta of 0.72.

Runway Growth Finance (NASDAQ:RWAY - Get Free Report) last posted its earnings results on Thursday, March 12th. The company reported $0.32 earnings per share for the quarter, missing the consensus estimate of $0.36 by ($0.04). Runway Growth Finance had a net margin of 24.79% and a return on equity of 11.52%. The company had revenue of $30.04 million for the quarter, compared to the consensus estimate of $31.60 million. On average, analysts anticipate that Runway Growth Finance will post 1.67 earnings per share for the current fiscal year.

Runway Growth Finance Announces Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Tuesday, March 24th. Stockholders of record on Tuesday, March 10th were paid a $0.33 dividend. The ex-dividend date was Tuesday, March 10th. This represents a $1.32 dividend on an annualized basis and a dividend yield of 19.5%. Runway Growth Finance's payout ratio is presently 143.48%.

Hedge Funds Weigh In On Runway Growth Finance

A number of institutional investors have recently made changes to their positions in RWAY. Sound Income Strategies LLC bought a new position in shares of Runway Growth Finance in the third quarter worth about $13,842,000. North Ground Capital increased its stake in shares of Runway Growth Finance by 102.5% in the fourth quarter. North Ground Capital now owns 1,569,050 shares of the company's stock worth $14,012,000 after purchasing an additional 794,050 shares during the period. Alpine Global Management LLC bought a new position in shares of Runway Growth Finance in the third quarter worth about $4,145,000. UBS Group AG increased its stake in shares of Runway Growth Finance by 57.0% in the fourth quarter. UBS Group AG now owns 638,503 shares of the company's stock worth $5,702,000 after purchasing an additional 231,744 shares during the period. Finally, SBE LLC DBA Cedar Cove Wealth Partners bought a new position in shares of Runway Growth Finance in the fourth quarter worth about $1,693,000. 64.61% of the stock is currently owned by institutional investors.

Runway Growth Finance Company Profile

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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