Runway Growth Finance Corp. (NASDAQ:RWAY) Sees Large Decline in Short Interest

Key Points

• Short interest fell 17.4% in April to 3,219,204 shares, equal to about 9.0% of shares sold short and a short-interest ratio of 3.6 days, indicating reduced bearish positioning.
• The company pays a high quarterly dividend of $0.33 ($1.32 annualized) for a 19.7% yield
• Analyst sentiment is mixed but cautious: consensus rating is Hold with an average price target of $9.00 after several firms trimmed targets (some to $7.00) while a few maintain buy ratings.

Runway Growth Finance Corp. (NASDAQ:RWAY - Get Free Report) saw a large drop in short interest during the month of April. As of April 15th, there was short interest totaling 3,219,204 shares, a drop of 17.4% from the March 31st total of 3,898,266 shares. Based on an average daily volume of 903,795 shares, the short-interest ratio is presently 3.6 days. Approximately 9.0% of the shares of the stock are sold short.

Wall Street Analyst Weigh In

Several equities analysts have recently issued reports on the company. Wall Street Zen upgraded Runway Growth Finance from a "sell" rating to a "hold" rating in a research note on Sunday. Wells Fargo & Company decreased their price target on Runway Growth Finance from $10.00 to $7.00 and set an "equal weight" rating on the stock in a research note on Monday, March 16th. JPMorgan Chase & Co. reduced their price objective on Runway Growth Finance from $9.50 to $7.00 and set a "neutral" rating on the stock in a research report on Friday, March 13th. Zacks Research lowered Runway Growth Finance from a "hold" rating to a "strong sell" rating in a research report on Tuesday, March 17th. Finally, B. Riley Financial reduced their price objective on Runway Growth Finance from $12.00 to $10.00 and set a "buy" rating on the stock in a research report on Tuesday, March 17th. Two analysts have rated the stock with a Buy rating, four have issued a Hold rating and one has given a Sell rating to the company's stock. According to MarketBeat.com, Runway Growth Finance currently has a consensus rating of "Hold" and an average price target of $9.00.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently made changes to their positions in the business. North Ground Capital raised its stake in Runway Growth Finance by 102.5% during 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 period. Alpine Global Management LLC bought a new position in shares of Runway Growth Finance in the third quarter valued at approximately $4,145,000. Sound Income Strategies LLC grew its holdings in shares of Runway Growth Finance by 18.6% in the fourth quarter. Sound Income Strategies LLC now owns 1,671,360 shares of the company's stock valued at $15,694,000 after acquiring an additional 261,768 shares in the last quarter. UBS Group AG grew its holdings 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 valued at $5,702,000 after acquiring an additional 231,744 shares in the last quarter. Finally, SBE LLC DBA Cedar Cove Wealth Partners bought a new position in Runway Growth Finance during the fourth quarter valued at $1,693,000. 64.61% of the stock is owned by institutional investors and hedge funds.

Runway Growth Finance Price Performance

RWAY stock traded up $0.19 during midday trading on Thursday, reaching $6.69. 223,214 shares of the stock were exchanged, compared to its average volume of 509,407. The stock has a market capitalization of $241.53 million, a PE ratio of 7.28 and a beta of 0.72. Runway Growth Finance has a 52 week low of $6.36 and a 52 week high of $11.40. 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 company has a fifty day moving average price of $7.11 and a 200 day moving average price of $8.52.

Runway Growth Finance (NASDAQ:RWAY - Get Free Report) last issued its quarterly earnings data on Thursday, March 12th. The company reported $0.32 earnings per share for the quarter, missing analysts' consensus estimates of $0.36 by ($0.04). The firm had revenue of $30.04 million for the quarter, compared to the consensus estimate of $31.60 million. Runway Growth Finance had a return on equity of 11.52% and a net margin of 24.79%. As a group, analysts expect that Runway Growth Finance will post 1.42 EPS for the current fiscal year.

Runway Growth Finance Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Tuesday, March 24th. Shareholders of record on Tuesday, March 10th were given a $0.33 dividend. This represents a $1.32 dividend on an annualized basis and a dividend yield of 19.7%. The ex-dividend date was Tuesday, March 10th. Runway Growth Finance's payout ratio is 143.48%.

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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