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Horizon Technology (HRZN)
NASDAQ:HRZN
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Horizon Technology
(NASDAQ:HRZN)
50Neutral
Positive Factors
Analyst Rating
The analyst reiterates a Buy rating, expecting a dividend yield of 14.2% and stock price appreciation, leading to a substantial total return.
Investment Yield
HRZN maintains a strong demand for its loans and has spillover income to support its dividend, which is expected to yield 17.7% annually.
Stock Appreciation
Despite a lower price target, HRZN's shares are projected to appreciate by 34.4%, contributing to an estimated 52% total return.
Negative Factors
Leverage Increase
HRZN's leverage increased due to a larger loan portfolio and reduced equity, nearing the upper end of its target range, indicating a potential need to raise equity.
Net Asset Value Decline
A GAAP net loss and a dividend drove net asset value down 7.0%.
Net Loss Impact
HRZN experienced a GAAP net loss due to unrealized mark-downs on certain loans, leading to a decrease in net asset value by 10.2%.
Horizon Technology (HRZN) vs. S&P 500 (SPY)
Market Cap
N/A
Dividend Yield17.46%
Average Volume (3M)634.68K
Price to Earnings (P/E)―
Beta (1Y)0.54
Revenue Growth-22.40%
EPS Growth-114.06%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength84
IndustryAsset Management
Share Statistics
EPS (TTM)-0.53
Shares Outstanding40,354,960
10 Day Avg. Volume650,587
30 Day Avg. Volume634,677
Financial Highlights & Ratios
PEG Ratio-13.13
Price to Book (P/B)0.98
Price to Sales (P/S)0.00
P/FCF Ratio-5.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$7.65Price Target Upside4.65% Upside
Rating ConsensusHold
Number of Analyst Covering5
Horizon Technology Business Overview & Revenue Model
Company DescriptionHorizon Technology Finance Corporation is a business development company specializing in lending and and investing in development-stage investments. It focuses on making secured debt and venture lending investments to venture capital backed companies in the technology, life science, healthcare information and services, and cleantech industries. It seeks to invest in companies in the United States.
How the Company Makes MoneyHorizon Technology makes money through a diversified revenue model that includes subscription-based services, software licensing fees, and sales of proprietary technology products. Key revenue streams include cloud service subscriptions, AI-powered software solutions, and cybersecurity tools. The company also generates income through strategic partnerships with other technology firms, providing integrated solutions that enhance customer offerings. Additionally, Horizon Technology benefits from long-term contracts with enterprise clients, ensuring a steady flow of recurring revenue.
Horizon Technology Financial Statement Overview
Summary
Horizon Technology exhibits a complex financial profile marked by fluctuations in revenue and profitability. The latest period shows significant revenue recovery and a reduction in debt, but historical volatility and operational inefficiencies pose concerns. The company's ability to sustain growth and stability remains crucial.Income Statement
Horizon Technology's revenue growth has been inconsistent, with significant fluctuations over the years. The company experienced a significant revenue decline in 2023, followed by a strong recovery in 2024. Gross profit margin was stable for 2024, but net profit margin was highly volatile, reflecting operational challenges. EBIT margin was relatively high, indicating efficient management of operating expenses.45
Neutral
Balance Sheet
The balance sheet shows improving equity with a strong equity ratio and no debt as of 2024, signaling financial stability. However, the company's high leverage in previous years may pose a risk if similar conditions arise in the future. The return on equity has been fluctuating, reflecting the variability in net income.62
Positive
Cash Flow
The cash flow statements show volatile free cash flow, with significant growth in 2024. The operating cash flow to net income ratio was low, indicating potential inefficiencies in converting net income into cash. However, the company managed to improve its free cash flow position significantly in the latest period.50
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 66.61M | 1.69M | -9.87M | 26.64M | 33.27M | 10.33M | Gross Profit |
| 59.77M | 1.69M | -9.87M | 6.66M | 17.31M | -2.33M | EBIT |
| 44.70M | -4.16M | -1.34M | 41.07M | 28.18M | 6.59M | EBITDA |
| 14.03M | 0.00 | 11.94M | 0.00 | 0.00 | 0.00 | Net Income Common Stockholders |
| -3.19M | -5.63M | -17.18M | 21.15M | 27.78M | 6.36M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 71.33M | 70.26M | 46.63M | 20.61M | 38.05M | 19.50M | Total Assets |
| 802.29M | 821.83M | 802.36M | 766.83M | 513.96M | 407.16M | Total Debt |
| 452.49M | 0.00 | 462.24M | 434.08M | 257.61M | 185.82M | Net Debt |
| 383.69M | -70.26M | 389.15M | 413.47M | 219.56M | 166.32M | Total Liabilities |
| 470.17M | 485.65M | 478.38M | 448.38M | 268.63M | 194.56M | Stockholders Equity |
| 332.12M | 336.18M | 323.98M | 318.45M | 245.34M | 212.60M |
| Cash Flow | Free Cash Flow | ||||
| -57.68M | 3.94M | 50.07M | -246.28M | -75.99M | -25.28M | Operating Cash Flow |
| -61.32M | 3.94M | 50.07M | -246.28M | -75.99M | -25.28M | Investing Cash Flow |
| -29.29M | 0.00 | 0.00 | -372.01M | -291.49M | -190.23M | Financing Cash Flow |
| 19.42M | 21.21M | 50.51M | 229.46M | 75.52M | 55.66M |
Horizon Technology Technical Analysis
Negative
7.31
Price Trends
8.31
Negative
8.59
Negative
8.97
Negative
Market Momentum
-0.28
Negative
37.14
Neutral
33.32
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HRZN, the sentiment is Negative. The current price of 7.31 is below the 20-day moving average (MA) of 7.75, below the 50-day MA of 8.31, and below the 200-day MA of 8.97, indicating a bearish trend. The MACD of -0.28 indicates Negative momentum. The RSI at 37.14 is Neutral, neither overbought nor oversold. The STOCH value of 33.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HRZN.
Horizon Technology Risk Analysis
Horizon Technology disclosed 104 risk factors in its most recent earnings report. Horizon Technology reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Horizon Technology Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $15.11B | 10.60 | 10.29% | 8.86% | 14.14% | -31.30% | |
71 Outperform | $1.31B | 25.94 | 3.27% | 14.98% | -28.04% | -69.52% | |
70 Outperform | $3.09B | 13.25 | 11.30% | 9.09% | -7.29% | -38.60% | |
65 Neutral | $1.16B | 10.79 | 8.11% | 11.98% | -3.55% | -20.43% | |
64 Neutral | $12.83B | 9.83 | 7.64% | 16985.66% | 12.34% | -5.73% | |
60 Neutral | $295.03M | 5.88 | 18.18% | 6.77% | 21.99% | 23.40% | |
50 Neutral | ― | -11.21% | 17.46% | -22.40% | -114.06% |
* Financial Sector Average
Performance Comparison
HRZN
Horizon Technology
7.31
-2.79
-27.62%
HTGC
Hercules Capital
17.80
0.20
1.14%
NMFC
New Mountain Finance
10.75
-0.49
-4.36%
NEWT
Newtek Business
11.20
-1.19
-9.60%
ARCC
Ares Capital
21.91
2.43
12.47%
GSBD
Goldman Sachs BDC
11.29
-1.94
-14.66%
Horizon Technology Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: -17.03%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a challenging environment with significant macroeconomic headwinds impacting the company's NAV and stressed assets. However, Horizon reported strong portfolio yields, liquidity, and positive developments in some portfolio companies. Despite these positives, the ongoing market volatility and uncertainties, particularly regarding tariffs, weigh heavily on the company's performance and outlook.Q1-2025 Updates
Positive Updates
Portfolio Growth and Investment Capacity
Despite macroeconomic challenges, Horizon increased its debt portfolio by $20 million in the first quarter. The company also raised its committed and approved backlog to nearly $236 million, providing a solid base for future growth opportunities.
High Portfolio Yield
Horizon achieved a debt portfolio yield of 15% for the quarter, which is among the highest in the BDC industry. This is expected to lead to increased net investment income over time.
Strong Liquidity Position
The company reported $126 million in available liquidity and a potential new investment capacity of $307 million, indicating a strong balance sheet ready to support growth.
Positive Developments in Portfolio Companies
Emalex Biosciences met pivotal trial endpoints for its drug to treat Tourette syndrome, and Kodiak Robotics announced the use of driverless trucks in commercial operations, with plans to go public at a $2.5 billion valuation.
Negative Updates
Net Asset Value Decline
The company's NAV decreased from $8.43 to $7.57 per share due to adjustments to fair value, paid distributions, and unrealized depreciations.
Stressed Assets and NAV Impact
The macro environment, including tariff-related uncertainties, negatively impacted Horizon's potential recovery from some stressed assets, leading to a significant decrease in NAV.
Nonaccruals and Loan Defaults
The company experienced downgrades of investments in InBrace and Standvast to one-rated investments, with reductions in fair values to zero. Additionally, Soli Organic faced a blockage notice from its senior lender, potentially affecting its nonaccrual status.
Market Volatility and Uncertainty
Tariff-related uncertainty and macro volatility have dampened optimism, affecting the venture capital ecosystem and exit markets for tech and life science companies.
Company Guidance
During the Horizon Technology Finance Corporation's first quarter 2025 earnings call, the company provided guidance that reflected a cautious yet optimistic outlook. They reported a net investment income of $0.27 per share and aimed to deliver net investment income at or above declared distributions over time. Horizon managed to grow its debt portfolio by $20 million, achieving a yield of 15% on debt investments, which stands at the top of the Business Development Company (BDC) industry. The company declared regular monthly distributions of $0.11 per share through September 2025, leveraging an undistributed spillover income of $1 per share. They also increased their committed and approved backlog to nearly $236 million. Despite market volatility, Horizon remains positioned to grow its portfolio, supported by a strong liquidity position with $126 million available. The company maintains a target leverage range of 1.2 to 1.3 times debt-to-equity, and their debt portfolio yield and onboarding yields are strong at 15% and 13%, respectively. Management expressed confidence in the long-term growth potential, driven by a robust pipeline of opportunities, continued high demand for venture debt capital, and operational independence post the Monroe Capital and Wendel Group partnership.Horizon Technology Corporate Events
Private Placements and FinancingM&A TransactionsBusiness Operations and Strategy
Horizon Technology Enters New Investment Management Agreement
Positive
Mar 31, 2025
On March 31, 2025, Horizon Technology Finance Corporation entered into a new investment management agreement with Horizon Technology Finance Management LLC following a transaction where Momentum US Bidco LLC, an affiliate of Wendel SE, acquired a 75% stake in Monroe Capital LLC’s affiliates, including the indirect parent of the Adviser. The agreement maintains the same terms as the previous one, ensuring continuity in investment advisory services. This strategic partnership aims to support Monroe’s growth initiatives and expand its U.S. private credit platform, with Wendel committing $1 billion for seed capital and GP commitments. Monroe will continue to operate independently, retaining its leadership and investment strategies, while Wendel’s involvement is expected to enhance Monroe’s market position and scalability.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.