Pennantpark $ (PFLT) AI Stock Analysis

• Market Cap: $1.01B
• Dividend Yield: 12.02%
• Average Volume (3M): 1.24M
• Price to Earnings (P/E): 11.4
• Beta (1Y): 0.60
• Revenue Growth: 93.63%
• EPS Growth: 24.41%
• Country: US
• Employees: N/A
• Sector: Financial
• Sector Strength: 85
• Industry: Asset Management
• EPS (TTM): 0.28
• Shares Outstanding: 99,217,896
• 10 Day Avg. Volume: 1,096,656
• 30 Day Avg. Volume: 1,236,307
• PEG Ratio: -0.34
• Price to Book (P/B): 0.78
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -1.27
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 1.54
• Enterprise Value/Gross Profit: 11.98
• Enterprise Value/Ebitda: 3.43
• 1Y Price Target: $10.92
• Price Target Upside: 6.74% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

PennantPark demonstrates strong profitability and valuation metrics, indicating a solid investment potential. The positive earnings call highlights strategic growth, yet cash flow concerns and technical bearish signals present risks that necessitate close monitoring.

Positive Factors

Credit Quality

PFLT has an admirable long-term credit quality record with losses far lower than non-accruals since 2011.

Dividend Management

Management expects the dividend to be covered comfortably throughout the remainder of the fiscal year, with no anticipated dividend cut.

Portfolio Growth

Strong originations exceeded moderate payoffs, resulting in a 6.8% increase in the size of PFLT's investment portfolio.

Negative Factors

Loan Yield

The investment portfolio increased by 20% due to strong originations, which offset lower loan yields.

Net Investment Income

Core net investment income (NII) of $0.28 per share was below the quarterly dividend of $0.3075, which led to a decrease in net asset value (NAV) by 2.4%.

Pennantpark $ Business Overview & Revenue Model

Company Description

PennantPark Floating Rate Capital Ltd. (PFLT) is a business development company that primarily invests in U.S. middle-market companies. It focuses on providing customized financing solutions, primarily through direct lending and investing in floating rate loans. The company's investment strategy is aimed at generating both income and capital appreciation for its investors.

How the Company Makes Money

PennantPark Floating Rate Capital Ltd. (PFLT) generates revenue primarily through the interest income earned from its investment portfolio of floating rate loans. These loans are typically extended to middle-market companies, which are generally defined as companies with earnings before interest, taxes, depreciation, and amortization (EBITDA) between $10 million and $50 million. PFLT aims to maintain a diversified portfolio across various industries to minimize risk. Additionally, the company may earn fee income from structuring and managing these loans. The floating rate nature of the loans provides a hedge against interest rate fluctuations, potentially leading to increased earnings in rising interest rate environments. A significant factor contributing to PFLT's earnings is its strategic partnerships and relationships within the financial sector, which help it source and manage investments effectively.

Pennantpark $ Financial Statement Overview

Summary

Strong profitability with a net profit margin of 43.5% and improving balance sheet metrics like an equity ratio of 41.1%. However, cash flow is negative, indicating sustainability risks.

Income Statement

The income statement reveals a significant increase in net income over time, with a strong net profit margin of 43.5% for the TTM. Revenue growth is volatile, but current figures show a positive trajectory. EBIT margin is also strong at 19.0%, indicating efficient operations. However, the absence of EBITDA figures limits deeper profitability analysis.

Balance Sheet

The balance sheet is solid, with a decent equity ratio of 41.1% indicating a stable financial position. The debt-to-equity ratio has improved, showing reduced leverage risk. ROE is strong at 7.2% for the TTM, reflecting good returns for shareholders. However, the high total liabilities relative to assets could be a concern in a downturn.

Cash Flow

Cash flow analysis shows a negative operating cash flow, which is concerning for sustainability. The free cash flow growth rate is negative, primarily due to significant cash outflows. The operating cash flow to net income ratio is negative, indicating that the company is not generating cash as efficiently as its net income suggests.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
215.75M	167.82M	139.34M	11.61M	61.91M	22.68M
	Gross Profit
90.79M	108.60M	110.06M	-12.52M	45.00M	548.74K
	EBIT
63.89M	92.92M	106.64M	38.18M	56.92M	18.81M
	EBITDA
83.63M	92.92M	-28.23M	0.00	0.00	0.00
	Net Income Common Stockholders
102.61M	91.84M	39.26M	3.45M	56.52M	18.41M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
111.36M	112.05M	99.99M	47.88M	49.83M	57.51M
	Total Assets
2.47B	2.11B	1.18B	1.22B	1.17B	1.15B
	Total Debt
184.22M	1.18B	495.43M	672.78M	652.63M	653.21M
	Net Debt
72.86M	1.06B	394.88M	624.90M	602.81M	595.70M
	Total Liabilities
1.40B	1.23B	526.01M	696.77M	680.25M	671.02M
	Stockholders Equity
1.07B	877.29M	653.61M	527.09M	490.61M	477.27M
Cash Flow		Free Cash Flow
-797.61M	-801.38M	140.56M	-49.96M	49.57M	-4.94M
	Operating Cash Flow
-797.61M	-801.38M	140.56M	-49.96M	49.57M	-4.94M
	Investing Cash Flow
-376.57M	0.00	0.00	-112.57M	41.02B	-39.84B
	Financing Cash Flow
783.74M	812.87M	-91.53M	47.70M	-56.31M	-909.16K

Pennantpark $ Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.23
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PFLT, the sentiment is Positive. The current price of 10.23 is above the 20-day moving average (MA) of 9.94, above the 50-day MA of 10.22, and below the 200-day MA of 10.45, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 56.86 is Neutral, neither overbought nor oversold. The STOCH value of 60.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PFLT.

Pennantpark $ Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TRIN	73 Outperform	$959.42M	6.77	17.56%	13.75%	46.14%	34.91%
SLRC	71 Outperform	$903.42M	10.29	8.86%	9.90%	14.33%	25.35%
PFLT	70 Outperform	$1.01B	11.40	7.59%	12.02%	93.63%	24.41%
CGBD	67 Neutral	$1.04B	10.93	6.92%	12.92%	-11.85%	-3.73%
BCSF	66 Neutral	$1.02B	8.97	9.87%	10.71%	12.24%	-3.21%
NMFC	65 Neutral	$1.16B	10.86	8.11%	11.91%	-3.55%	-20.43%
Sector *	64 Neutral	$12.82B	9.83	7.68%	17000.34%	12.38%	-5.56%

Pennantpark $ Corporate Events

PennantPark Announces May 2025 Monthly Distribution

On May 2, 2025, PennantPark Floating Rate Capital Ltd. announced a monthly distribution of $0.1025 per share for May 2025, payable on June 2, 2025, to stockholders of record as of May 15, 2025. This distribution is expected to be paid from taxable net investment income, with specific tax characteristics to be reported on Form 1099 after the year-end. The announcement highlights the company’s continued commitment to providing returns to its shareholders and its strategic positioning in the market as a regulated investment company, offering potential tax benefits to non-U.S. stockholders.

Spark’s Take on PFLT Stock

According to Spark, TipRanks’ AI Analyst, PFLT is a Neutral.

PennantPark’s strong financial performance, particularly in profitability and balance sheet stability, underpins its overall score. The company’s attractive valuation and positive earnings call further support its stock potential. However, the negative cash flow situation and bearish technical indicators present notable risks. While there are strengths in income growth and strategic exits, cash flow inefficiencies and market sentiment require close monitoring.

To see Spark’s full report on PFLT stock, click here.

Pennantpark Amends Credit Facility for Better Terms

On April 16, 2025, PennantPark Floating Rate Funding I, LLC, a subsidiary of PennantPark Floating Rate Capital Ltd., amended its credit facility agreement, reducing the interest rate spread, extending the reinvestment and maturity periods by one year, and adjusting the maximum first lien advance rate and lender commitments. This amendment, announced on April 22, 2025, reflects favorable terms in the current market, potentially benefiting investors and enhancing the company’s financial flexibility.

Spark’s Take on PFLT Stock

According to Spark, TipRanks’ AI Analyst, PFLT is a Neutral.

PennantPark Floating Rate Capital shows strong profitability and valuation metrics, indicating potential for income generation. However, technical analysis points to a bearish trend with stock trading below key averages. While the earnings call highlighted positive growth, cash flow concerns and unrealized losses present risks. Overall, the stock is moderately attractive with a need for close monitoring of cash flow improvements.

To see Spark’s full report on PFLT stock, click here.

PennantPark Appoints New Chief Compliance Officer

On April 15, 2025, Frank Galea resigned as Chief Compliance Officer of PennantPark Floating Rate Capital Ltd. with no disagreements reported regarding company operations, policies, or practices. Gerald Cummins, a seasoned professional with a background at ACA Group and Alaric Compliance Services, has been appointed as his successor, indicating a smooth transition in the company’s compliance leadership.

Spark’s Take on PFLT Stock

According to Spark, TipRanks’ AI Analyst, PFLT is a Outperform.

PennantPark’s stock is moderately attractive with strong profitability and a solid balance sheet but requires careful management of cash flow issues. The valuation is compelling due to a low P/E ratio and high dividend yield. The positive earnings call further supports a favorable view, although technical indicators suggest caution.

To see Spark’s full report on PFLT stock, click here.

PennantPark to Announce Q2 2025 Financial Results

On April 3, 2025, PennantPark Floating Rate Capital Ltd. announced it will release its financial results for the second fiscal quarter ended March 31, 2025, on May 12, 2025, after market close. The company will host a conference call on May 13, 2025, to discuss these results, providing stakeholders an opportunity to gain insights into its financial performance and strategic direction.

PennantPark Announces April 2025 Monthly Distribution

On April 2, 2025, PennantPark Floating Rate Capital Ltd. announced a monthly distribution of $0.1025 per share for April 2025, payable on May 1, 2025, to stockholders of record as of April 15, 2025. The distribution is expected to be paid from taxable net investment income, with specific tax characteristics reported to stockholders on Form 1099 after the calendar year ends. This announcement underscores the company’s ongoing commitment to providing returns to its investors and highlights its strategic focus on generating qualified interest income and short-term capital gains, potentially benefiting non-U.S. stockholders with tax exemptions.

PennantPark Announces March 2025 Distribution

On March 4, 2025, PennantPark Floating Rate Capital Ltd. announced a monthly distribution of $0.1025 per share, payable on April 1, 2025, to stockholders of record as of March 14, 2025. This distribution is expected to be paid from taxable net investment income, and the tax characteristics will be reported to stockholders after the calendar year ends. The company operates as a regulated investment company, allowing certain distributions to be exempt from U.S. withholding tax for non-U.S. stockholders, potentially impacting its appeal to international investors.

PennantPark Announces February 2025 Distribution Details

PennantPark Floating Rate Capital Ltd. announced its monthly distribution of $0.1025 per share for February 2025, which will be payable on March 3, 2025, to stockholders of record as of February 18, 2025. The distribution, expected to be paid from taxable net investment income, may include qualified interest income and short-term capital gains exempt from U.S. withholding tax for non-U.S. stockholders. This announcement highlights PennantPark’s ongoing commitment to providing consistent returns to its investors while navigating the complexities of tax regulations for non-U.S. stakeholders.