Hercules Capital, Inc. is a business development company. The firm specializing in providing venture debt, debt, senior secured loans, and growth capital to privately held venture capital-backed companies at all stages of development from startups, to expansion stage including select publicly listed companies and select special opportunity lower middle market companies that require additional capital to fund acquisitions, recapitalizations and refinancing and established-stage companies. The firm provides growth capital financing solutions for capital extension; management buy-out and corporate spin-out financing solutions; company, asset specific, or intellectual property acquisition financing; convertible, subordinated and/or mezzanine loans; domestic and international corporate expansion; vendor financing; revenue acceleration by sales and marketing development, and manufacturing expansion. It provides asset-based financing with a focus on cash flow; accounts receivable facilities; equipment loans or leases; equipment acquisition; facilities build-out and/or expansion; working capital revolving lines of credit; inventory. The firm also provides bridge financing to IPO or mergers and acquisitions or technology acquisition; dividend recapitalizations and other sources of investor liquidity; cash flow financing to protect against share price volatility; competitor acquisition; pre-IPO financing for extra cash on the balance sheet; public company financing to continue asset growth and production capacity; short-term bridge financing; and strategic and intellectual property acquisition financings. It also focuses on customized financing solutions, emerging growth, mid venture, and late venture financing. The firm invests primarily in structured debt with warrants and, to a lesser extent, in senior debt and equity investments. The firm generally seeks to invest in companies that have been operating for at least six to 12 months prior to the date of their investment. It prefers to invest in technology, energy technology, sustainable and renewable technology, and life sciences. Within technology the firm focuses on advanced specialty materials and chemicals; communication and networking, consumer and business products; consumer products and services, digital media and consumer internet; electronics and computer hardware; enterprise software and services; gaming; healthcare services; information services; business services; media, content and information; mobile; resource management; security software; semiconductors; semiconductors and hardware; and software sector. Within energy technology, it invests in agriculture; clean technology; energy and renewable technology, fuels and power technology; geothermal; smart grid and energy efficiency and monitoring technologies; solar; and wind. Within life sciences, the firm invests in biopharmaceuticals; biotechnology tools; diagnostics; drug discovery, development and delivery; medical devices and equipment; surgical devices; therapeutics; pharma services; and specialty pharmaceuticals. It also invests in educational services. The firm invests primarily in United States based companies and considers investment in the West Coast, Mid-Atlantic regions, Southeast and Midwest; particularly in the areas of software, biotech and information services. The firm prefers to invest between $10 million to $250 million in equity per transactions. It invests generally between $1 million to $40 million in companies focused primarily on business services, communications, electronics, hardware, and healthcare services. The firm invests primarily in private companies but also have investments in public companies. For equity investments, the firm seeks to represent a controlling interest in its portfolio companies which may exceed 25% of the voting securities of such companies. The firm seeks to invest a limited portion of its assets in equipment-based loans to early-stage prospective portfolio companies. These loans are generally for amounts up to $3 million but may be up to $15 million for certain energy technology venture investments. The firm allows certain debt investments have the right to convert a portion of the debt investment into equity. It also co-invests with other private equity firms. The firm seeks to exit its investments through initial public offering, a private sale of equity interest to a third party, a merger or an acquisition of the company or a purchase of the equity position by the company or one of its stockholders. The firm has structured debt with warrants which typically have maturities of between two and seven years with an average of three years; senior debt with an investment horizon of less than three years; equipment loans with an investment horizon ranging from three to four years; and equity related securities with an investment horizon ranging from three to seven years. The firm prefers to invest through its balance sheet capital. The firm formerly known as Hercules Technology Growth Capital, Inc. Hercules Capital, Inc. was founded in December 2003 and is based in Palo Alto, California with additional offices in Connecticut; Boston, Massachusetts; San Diego, California; Westport, Connecticut; Elmhurst, Illinois; Santa Monica, California; McLean, Virginia; New York, New York; Radnor, Pennsylvania; and Washington, District of Columbia and London, United Kingdom.
Hercules Capital Stock Up 2.8 %
HTGC Stock opened at $16.02 on Monday. The firm has a market capitalization of $2.04 billion, a PE ratio of 145.65 and a beta of 1.36. The company has a quick ratio of 3.84, a current ratio of 3.84 and a debt-to-equity ratio of 1.13. Hercules Capital has a twelve month low of $12.61 and a twelve month high of $19.09. The stock's 50 day moving average is $14.14 and its 200-day moving average is $16.17.
Hercules Capital (NYSE:HTGC - Get Rating) last released its quarterly earnings results on Thursday, July 28th. The financial services provider reported $0.32 EPS for the quarter, missing analysts' consensus estimates of $0.33 by ($0.01). Hercules Capital had a net margin of 4.86% and a return on equity of 11.63%. The company had revenue of $72.12 million during the quarter, compared to analysts' expectations of $72.41 million. During the same period in the previous year, the company posted $0.32 earnings per share. The company's quarterly revenue was up 3.7% compared to the same quarter last year. Sell-side analysts expect that Hercules Capital will post 1.35 EPS for the current fiscal year.
Hercules Capital Increases Dividend
The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, August 16th. Shareholders of record on Tuesday, August 9th will be given a $0.50 dividend. This represents a $2.00 dividend on an annualized basis and a yield of 12.48%. This is an increase from Hercules Capital's previous quarterly dividend of $0.33. The ex-dividend date of this dividend is Monday, August 8th. Hercules Capital's dividend payout ratio is presently 1,200.11%.
Wall Street Analysts Forecast Growth
HTGC has been the subject of several research analyst reports. JMP Securities lowered their price objective on shares of Hercules Capital from $19.00 to $18.00 and set a "market outperform" rating for the company in a research note on Monday, August 1st. Wells Fargo & Company upped their price objective on shares of Hercules Capital from $18.50 to $19.00 and gave the company an "overweight" rating in a report on Monday, April 25th. Piper Sandler cut their price objective on shares of Hercules Capital from $18.50 to $15.50 and set a "neutral" rating on the stock in a research report on Tuesday, June 28th. TheStreet lowered Hercules Capital from a "b" rating to a "c-" rating in a research report on Monday, July 11th. Finally, Oppenheimer lowered Hercules Capital from an "outperform" rating to a "market perform" rating and cut their price target for the stock from $18.00 to $15.00 in a report on Friday, July 29th. One analyst has rated the stock with a sell rating, four have assigned a hold rating and four have given a buy rating to the company's stock. According to data from MarketBeat, the company presently has a consensus rating of "Hold" and an average price target of $17.66.
Insider Buying and Selling at Hercules Capital
In other Hercules Capital news, Director Thomas J. Fallon bought 10,000 shares of the business's stock in a transaction dated Thursday, May 12th. The shares were purchased at an average price of $14.88 per share, for a total transaction of $148,800.00. Following the purchase, the director now directly owns 61,604 shares of the company's stock, valued at $916,667.52. The acquisition was disclosed in a legal filing with the SEC, which is available through this link. Company insiders own 1.40% of the company's stock.
