Hercules Capital (HTGC) AI Stock Analysis

• Market Cap: $3.34B
• Dividend Yield: 10.27%
• Average Volume (3M): 860.09K
• Price to Earnings (P/E): 12.2
• Beta (1Y): 0.69
• Revenue Growth: -15.88%
• EPS Growth: -13.91%
• Country: US
• Employees: 100
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 0.50
• Shares Outstanding: 181,675,690
• 10 Day Avg. Volume: 918,873
• 30 Day Avg. Volume: 860,091
• PEG Ratio: -0.42
• Price to Book (P/B): 1.63
• Price to Sales (P/S): 7.78
• P/FCF Ratio: -27.40
• Enterprise Value/Market Cap: 1.65
• Enterprise Value/Revenue: 15.81
• Enterprise Value/Gross Profit: 19.49
• Enterprise Value/Ebitda: 22.29
• 1Y Price Target: $20.45
• Price Target Upside: 11.14% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 57 Neutral
• Price Target: $19.00 ▲(3.26% Upside)

Hercules Capital's overall stock score is driven by strong earnings call performance and attractive valuation, offset by financial performance challenges and bearish technical indicators. The company's robust balance sheet and high dividend yield are positive factors, but profitability and cash flow issues need to be addressed.

Positive Factors

Record Fundings and Income Growth

The significant increase in fundings and income growth indicates strong demand for Hercules Capital's services, enhancing its market position and revenue potential.

Strong Balance Sheet and Liquidity

A robust balance sheet with high liquidity provides Hercules Capital with financial flexibility to capitalize on growth opportunities and withstand market volatility.

Improved Portfolio Credit Quality

Enhanced credit quality reduces risk exposure and potential losses, supporting sustainable long-term profitability and financial health.

Negative Factors

Declining Revenue Trend

A declining revenue trend poses a challenge to maintaining profitability and could impact the company's ability to invest in future growth initiatives.

Negative Operating Cash Flow

Negative operating cash flow indicates potential liquidity issues, which could constrain Hercules Capital's ability to finance operations and growth without external funding.

Profitability Challenges

Negative profitability impacts return on equity and could hinder Hercules Capital's ability to generate shareholder value and reinvest in the business.

Hercules Capital Business Overview & Revenue Model

Company Description

Hercules Capital (HTGC) is a leading specialty finance company that provides debt and equity growth capital to venture capital-backed companies in the technology, life sciences, and sustainable and renewable technology sectors. Founded in 2003, the company focuses on helping innovative companies by offering customized financing solutions, including loans, structured finance, and equity investments, to support their growth and operational needs.

How the Company Makes Money

Hercules Capital generates revenue primarily through interest income from its debt investments, which include secured loans and credit facilities to growth-stage companies. The company charges interest rates that are typically higher than traditional bank loans due to the higher risk associated with lending to early-stage companies. Additionally, Hercules earns fees from structuring and origination services, as well as management fees from its investment funds. The company also benefits from equity investments in the companies it finances, allowing it to participate in the growth and success of its portfolio companies. Significant partnerships with venture capital firms and access to a network of innovative companies contribute to Hercules's ability to source high-quality investment opportunities, which further enhances its revenue potential.

Hercules Capital Financial Statement Overview

Summary

Hercules Capital's financial performance is challenged by declining revenue and negative net income in the TTM period, indicating profitability issues. Strong equity positions and low leverage are positives, but negative cash flow is a significant concern.

Income Statement

Hercules Capital's income statement shows a declining trend in revenue over the recent periods, decreasing from $460.7 million in 2023 to $388.3 million in TTM (Trailing-Twelve-Months). The net income turned negative in TTM, indicating challenges in profitability. Gross profit margin remains high, indicating efficient cost management despite revenue decline. However, the negative net income and declining revenue growth are concerning.

Balance Sheet

The balance sheet reveals a strong equity position with stockholders' equity consistently high relative to total assets, resulting in a healthy equity ratio. However, the debt-to-equity ratio is low due to minimal debt levels. This indicates low leverage, which is generally positive, but it also reflects limited growth through financing. The return on equity has seen fluctuations, impacted by varying net income levels.

Cash Flow

Cash flow analysis shows negative operating cash flow in TTM, indicating cash management issues. Free cash flow is also negative, reflective of operational challenges. The free cash flow to net income ratio is unfavorable, showing inefficiencies in converting earnings to cash. A positive aspect is the significant investing cash inflow in TTM, possibly from asset sales or investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	348.92M	415.93M	460.67M	184.64M	255.13M	297.77M
Gross Profit	282.97M	361.69M	459.07M	140.79M	218.16M	268.78M
EBITDA	247.39M	263.43M	405.29M	250.62M	213.39M	224.43M
Net Income	-4.29M	260.13M	337.48M	156.83M	174.16M	227.26M
Balance Sheet
Total Assets	4.28B	3.83B	3.42B	3.03B	2.60B	2.62B
Cash, Cash Equivalents and Short-Term Investments	53.30M	42.68M	98.90M	2.90B	133.12M	198.28M
Total Debt	2.08B	1.79B	1.56B	1.58B	1.24B	1.30B
Total Liabilities	2.13B	1.84B	1.61B	1.63B	1.29B	1.33B
Stockholders Equity	2.15B	1.99B	1.80B	1.40B	1.31B	1.29B
Cash Flow
Free Cash Flow	-633.61M	-118.09M	67.39M	-424.91M	128.51M	207.66M
Operating Cash Flow	-633.61M	-118.09M	68.28M	-424.80M	128.62M	207.80M
Investing Cash Flow	329.84M	-705.00K	-887.00K	-114.00K	-106.00K	-137.00K
Financing Cash Flow	318.15M	119.20M	22.75M	314.52M	-229.87M	-85.04M

Hercules Capital Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 18.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HTGC, the sentiment is Negative. The current price of 18.4 is below the 20-day moving average (MA) of 19.12, below the 50-day MA of 19.10, and above the 200-day MA of 18.31, indicating a neutral trend. The MACD of -0.13 indicates Positive momentum. The RSI at 35.32 is Neutral, neither overbought nor oversold. The STOCH value of 8.60 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HTGC.

Hercules Capital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TSLX	74 Outperform	$2.12B	11.23	11.66%	9.28%	-6.29%	-15.46%
GBDC	71 Outperform	$3.68B	9.77	9.33%	11.93%	32.19%	-13.72%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
PFLT	63 Neutral	$878.08M	10.47	7.37%	13.90%	55.25%	-47.71%
FSK	58 Neutral	$4.19B	19.22	3.39%	18.72%	-8.32%	-65.56%
HTGC	57 Neutral	$3.34B	12.21	12.81%	10.27%	-15.88%	-13.91%
PNNT	48 Neutral	$427.69M	30.42	2.89%	14.66%	-35.46%	-67.15%

Hercules Capital Corporate Events

Hercules Capital Announces Q2 2025 Cash Distribution

On July 29, 2025, Hercules Capital announced a second quarter cash distribution of $0.47 per share, payable in August 2025. The company reported record financial results for Q2 2025, with total gross debt and equity commitments reaching $1.0 billion and net investment income of $88.7 million, providing 125% coverage of the base cash distribution. Hercules Capital also strengthened its financial position by closing a $350 million offering of unsecured notes and increasing its credit facility with MUFG Bank to $440 million. These achievements underscore Hercules Capital’s robust growth and strategic positioning in the specialty financing industry.

The most recent analyst rating on (HTGC) stock is a Hold with a $18.75 price target. To see the full list of analyst forecasts on Hercules Capital stock, see the HTGC Stock Forecast page.

Hercules Capital Holds Annual Stockholders Meeting

On June 18, 2025, Hercules Capital held its Annual Meeting of Stockholders where several key decisions were made. Stockholders elected Scott Bluestein, Wade Loo, and DeAnne Aguirre as Class III directors until 2028, approved the executive officer compensation, and ratified PricewaterhouseCoopers LLP as the independent public accountant for 2025. However, they did not authorize the company to issue shares below the net asset value.

The most recent analyst rating on (HTGC) stock is a Hold with a $18.75 price target. To see the full list of analyst forecasts on Hercules Capital stock, see the HTGC Stock Forecast page.

Hercules Capital Completes $350M Public Offering

On June 16, 2025, Hercules Capital, Inc. completed a public offering of $350 million in 6.000% Notes due 2030, which are unsecured and rank senior to subordinated debt. The company plans to use the proceeds to repay outstanding secured debt. Additionally, on June 10, 2025, Hercules Funding IV LLC, a subsidiary of Hercules Capital, amended its Loan and Security Agreement with MUFG Bank, increasing the facility size to $440 million and extending the maturity to 2029.

The most recent analyst rating on (HTGC) stock is a Hold with a $18.75 price target. To see the full list of analyst forecasts on Hercules Capital stock, see the HTGC Stock Forecast page.