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.
Wall Street Analysts Forecast Growth
HTGC has been the subject of several recent research reports. Compass Point dropped their target price on shares of Hercules Capital to $15.75 in a report on Tuesday, August 9th. Piper Sandler cut their price target on shares of Hercules Capital from $18.50 to $15.50 and set a "neutral" rating on the stock in a report on Tuesday, June 28th. Keefe, Bruyette & Woods downgraded Hercules Capital from an "outperform" rating to a "market perform" rating and set a $18.00 target price for the company. in a research note on Friday, April 22nd. Oppenheimer downgraded Hercules Capital from an "outperform" rating to a "market perform" rating and decreased their target price for the company from $18.00 to $15.00 in a research note on Friday, July 29th. Finally, TheStreet downgraded Hercules Capital from a "b" rating to a "c-" rating in a research note on Monday, July 11th. One equities research analyst has rated the stock with a sell rating, four have given a hold rating and four have assigned a buy rating to the company. Based on data from MarketBeat.com, the company presently has a consensus rating of "Hold" and a consensus target price of $17.38.
Hercules Capital Stock Performance
HTGC opened at $15.79 on Monday. The business's 50 day moving average is $14.27 and its 200-day moving average is $16.12. The stock has a market cap of $2.01 billion, a PE ratio of 143.56 and a beta of 1.36. The company has a current ratio of 3.84, a quick 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.
Hercules Capital (NYSE:HTGC - Get Rating) last released its quarterly earnings results on Thursday, July 28th. The financial services provider reported $0.32 earnings per share 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 business had revenue of $72.12 million for the quarter, compared to the consensus estimate of $72.41 million. During the same period last year, the firm posted $0.32 EPS. The business's quarterly revenue was up 3.7% on a year-over-year basis. On average, analysts predict that Hercules Capital will post 1.35 earnings per share for the current year.
Hercules Capital Increases Dividend
The company also recently announced a quarterly dividend, which will be paid on Tuesday, August 16th. Investors of record on Tuesday, August 9th will be issued a dividend of $0.50 per share. This is a boost from Hercules Capital's previous quarterly dividend of $0.33. The ex-dividend date of this dividend is Monday, August 8th. This represents a $2.00 annualized dividend and a yield of 12.67%. Hercules Capital's payout ratio is presently 1,272.84%.
