Hercules Capital Posts Better-Than-Expected 4Q Results; Shares Gain Pre-Market

Hercules Capital reported better-than-expected 4Q results driven by a rise in new debt and equity commitments. Shares of the specialty finance company rose 1.1% in pre-market trading.

Hercules Capital’s (HTGC) 4Q net investment income surged 5.1% to $0.37 per share on a year-over-year basis and beat the Street estimates of $0.33 per share. Total investment income increased 6.7% to $75.3 million and surpassed the consensus estimate of $70.6 million.

The company’s new debt and equity commitments came in at $150.8 million in the quarter. Early loan repayments totaled $282.3 million, with the net asset value landing at $11.26 per share. (See Hercules Capital stock analysis on TipRanks)

Hercules Capital CEO Scott Bluestein commented, “During Q4 our portfolio generated net investment income in excess of our base shareholder distribution and this allowed us to declare a $0.05 supplemental distribution to our shareholders.”

On Jan. 8, Piper Sandler analyst Crispin Love increased the stock’s price target to $16 (2.4% upside potential) from $13 and reiterated a Buy rating, based on the assumption that “Hercules trades at 155% of net asset value.”

The consensus rating among analysts is a Strong Buy based on 5 unanimous Buys. The average analyst price target stands at $15.65 and implies that shares are fully valued at current levels. Shares have jumped more than 46% over the past six months.

Additionally, Hercules Capital scores a 9 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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