PSEC

Prospect Capital Corporation

Fundamental data last updated:October 7, 2026

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company profile

SECTOR

Financial Services

industry

Asset Management

Exchange

NASDAQ

County of HQ

US

Next Earnings Date

Pending Announcement

Business Summary

Prospect Capital Corporation is a business development company. It specializes in middle market, mature, mezzanine finance, later stage, emerging growth, leveraged buyouts, refinancing, acquisitions, recapitalizations, turnaround, growth capital, development, capital expenditures and subordinated debt tranches of collateralized loan obligations, cash flow term loans, market place lending and bridge transactions. It also makes real estate investments particularly in multi-family residential real estate asset class. The fund makes secured debt, senior debt, senior and secured term loans, unitranche debt, first-lien and second lien, private debt, private equity, mezzanine debt, and equity investments in private and microcap public businesses. It focuses on both primary origination and secondary loans/portfolios and invests in situations like debt financings for private equity sponsors, acquisitions, dividend recapitalizations, growth financings, bridge loans, cash flow term loans, real estate financings/investments. It also focuses on investing in small-sized and medium-sized private companies rather than large public companies. The fund typically invests across all industry sectors, with a particular expertise in the energy and industrial sectors. It invests in aerospace and defense, chemicals, conglomerate services, consumer services, ecological, electronics, financial services, machinery, manufacturing, media, pharmaceuticals, retail, software, specialty minerals, textiles and leather, transportation, oil and gas production, coal production, materials, industrials, consumer discretionary, information technology, utilities, pipeline, storage, power generation and distribution, renewable and clean energy, oilfield services, healthcare, food and beverage, education, business services, and other select sectors. It prefers to invest in the United States and Canada. The fund seeks to invest between $10 million to $500 million per transaction in companies with EBITDA between $5 million and $150 million, sales value between $25 million and $500 million, and enterprise value between $5 million and $1000 million. It fund also co-invests for larger deals. The fund seeks control acquisitions by providing multiple levels of the capital structure. The fund focuses on sole, agented, club, or syndicated deals.

 


VALUATION

P/E

-30.35

Market Cap ($M USD)

$1.19B

Forward P/E

7.41

PEG

0.01

PRICE TO SALES

11.95

PRICE TO BOOK

0.25

EV / EBITDA

-464.16

5-Year Average P/E

Free Cash Flow Yield

34.75%

DCF Value

$-5.77

Graham Number

N/A

Price to FCF

2.88

EV to FCF

6.99

Earnings Yield

-3.30%

FCF Yield

34.75%

DIVIDEND

Yield

22.36%

Annual Payout

$0.53

Payout Ratio

-866.45%

Consecutive Years of Dividend Growth

5-Year Dividend Growth Rate

Financial Health & Profitability

Earnings Per Share

-$0.08

Next Year EPS Growth Estimate

$0.32

Next Year Revenue Growth Estimate

$573.98M

Return on Equity (ROE)

-1.12%

FREE CASH FLOW

Operating Margin

-6.17%

Debt-to-Equity

0.70

Piotroski F-Score

5

Altman Z-Score

0.10

Return on Invested Capital (ROIC)

-0.10%

Current Ratio

3.10

Quick Ratio

3.10

Net Debt to EBITDA

-273.11

Interest Coverage

-0.05

Gross Profit margin

-23.29%

FCF PER SHARE

$0.85

REVENUE PER SHARE

$0.21

Gainseekers Quantitative Analysis

Summary

The market’s perception of Prospect Capital Corporation seems starkly misaligned with its intrinsic value. Trading well below its DCF value and lacking a Graham Number, the stock’s valuation raises eyebrows. The Forward P/E of 5.89 suggests potential growth, yet the negative Earnings Yield and Altman Z-score of 0.12 signal financial distress and heightened risk. The company’s negative ROIC and operating margins further underscore management’s struggle to generate returns, painting a picture of a business in need of strategic overhaul.

AI Exposure / Tech Reliance

In the realm of asset management, Prospect Capital's adaptability to AI and tech shifts is crucial. While the industry is ripe for automation and data analytics, the company's current metrics do not explicitly reflect a tech-forward strategy. Its resilience will depend on leveraging tech to enhance operational efficiency and client engagement.

The Bull Case

For the value-driven investor, Prospect Capital offers intriguing prospects. The FCF Yield of 0.45% and a Piotroski F-Score of 5 suggest some operational efficiency and potential for improvement. Despite negative margins, the company's low Debt/Equity ratio of 0.70 indicates a manageable debt load, providing a cushion for future growth. These factors could appeal to those betting on a turnaround story.

The Bear Case

However, the structural risks are glaring. The Price/Book ratio of 0.26 and Price/Sales of 12.45 highlight a disconnect between market valuation and underlying fundamentals. With a negative EPS and operating margin, the company struggles to convert sales into profit. The stock's proximity to its 52-week low suggests investor skepticism, compounded by a staggering payout ratio of -910.86%, raising questions about dividend sustainability.

Market Sentiment & Smart Money

Short Interest %

Analyst Consensus

Hold

Average Analyst Price Target

$2.50

Institutional Ownership %

1-Year Beta

0.81

Insider Buying % (6 Mo)

Distance to 52-Week High

47.68%

Distance to 52-Week Low

10.97%

EARNINGS SURPRISE %

44.27%

50-DAY SMA

$2.56

200-DAY SMA

$2.69

⚠️ Financial Disclaimer:
This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate. We may earn a commission from partner links.