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Hercules Capital Inc (HTGC)
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Upturn Advisory Summary
02/20/2025: HTGC (1-star) has a low Upturn Star Rating. Not recommended to BUY.
Upturn Star Rating
Not Recommended Performance
These Stocks/ETFs, based on Upturn Advisory, consistently fall short of market performance, signaling caution before investing.
AI Based Fundamental Rating
Below Average Performance
These Stocks/ETFs, based on Upturn Advisory, often underperform the market, warranting careful consideration before investing.
Analysis of Past Performance
Type Stock | Historic Profit 17.11% | Avg. Invested days 56 | Today’s Advisory Consider higher Upturn Star rating |
Upturn Star Rating | Upturn Advisory Performance  2.0 | Stock Returns Performance  2.0 |
| Profits based on simulation | Last Close 02/20/2025 |
Key Highlights
Company Size Mid-Cap Stock | Market Capitalization 3.76B USD | Price to earnings Ratio 13.48 | 1Y Target Price 21.17 |
Price to earnings Ratio 13.48 | 1Y Target Price 21.17 | ||
Volume (30-day avg) 903210 | Beta 1.3 | 52 Weeks Range 16.25 - 22.04 | Updated Date 02/21/2025 |
52 Weeks Range 16.25 - 22.04 | Updated Date 02/21/2025 | ||
Dividends yield (FY) 8.55% | Basic EPS (TTM) 1.61 |
Earnings Date
Report Date 2025-02-13 | When Before Market | Estimate 0.5031 | Actual 0.49 |
Profitability
Profit Margin 53.28% | Operating Margin (TTM) 84.75% |
Management Effectiveness
Return on Assets (TTM) 7.1% | Return on Equity (TTM) 13.87% |
Valuation
Trailing PE 13.48 | Forward PE 11.05 | Enterprise Value 5438097920 | Price to Sales(TTM) 7.62 |
Enterprise Value 5438097920 | Price to Sales(TTM) 7.62 | ||
Enterprise Value to Revenue 15.82 | Enterprise Value to EBITDA - | Shares Outstanding 173155008 | Shares Floating 167860545 |
Shares Outstanding 173155008 | Shares Floating 167860545 | ||
Percent Insiders 2.05 | Percent Institutions 29.03 |
AI Summary
Hercules Capital Inc. (HTGC): A Comprehensive Overview
Company Profile
History & Background
Founded in 2003, Hercules Capital, Inc. (HTGC) is a leading specialty finance company focused on providing debt and equity capital to venture capital-backed and private equity-backed companies in the technology, life sciences, and sustainable and renewable technology industries. The company has a proven track record of success, having invested in over 700 companies across its 20-year history. Its portfolio includes high-growth companies like Spotify, Cloudflare, and Grubhub.
Core Business Areas
- Debt Capital: HTGC provides senior secured loans, second lien loans, and unitranche loans to its portfolio companies.
- Equity Capital: Through its Hercules Capital Specialty Finance Fund (HCAP), the company invests in preferred stock, common stock, and warrants.
- Capital Solutions: HTGC also offers custom-tailored financing solutions to meet the specific needs of its clients.
Leadership & Corporate Structure
- Scott Bluestein: CEO and Chairman
- Darren C. Baker: Chief Operating Officer and President
- J. Eric Rice: President of Hercules Capital Specialty Finance Fund
- Michael P. Seery: Chief Credit Officer
- Board of Directors: Comprises experienced professionals from diverse backgrounds, including technology, finance, and law.
Top Products & Market Share
Top Products:
- Senior Secured Term Loans: Represent the largest portion of HTGC's portfolio, offering borrowers attractive terms with lower risk.
- Unitranche Loans: Provide borrowers with a single loan facility combining senior secured and junior debt, offering flexibility and growth capital.
- Preferred Stock Investments: Offer investors stable returns with potential for upside through warrants.
Market Share:
HTGC is a prominent player within the specialty finance market, particularly in the technology and life sciences sectors. However, determining the precise market share is challenging due to the fragmented nature of the industry and varying methodologies used by different sources.
Product Performance & Market Reception:
HTGC has consistently delivered strong performance with a high-quality portfolio and low default rates. The company has been recognized by industry publications and awards for its investment performance and commitment to innovation.
Total Addressable Market
The total addressable market for HTGC is substantial. The global venture capital market alone is expected to reach $884 billion by 2027. Additionally, the life sciences and sustainable technology sectors represent significant growth opportunities for the company.
Financial Performance
Recent Financial Performance (2022 Q4)
- Revenue: $104.2 million
- Net Income: $23.2 million
- EPS: $0.35
- Profit Margin: 19.2%
Financial Highlights:
- Strong revenue and earnings growth over the past five years.
- Stable net interest margin and low credit losses.
- Consistent dividend payouts with a current yield of around 6%.
- Healthy cash flow and balance sheet with ample liquidity.
Dividends & Shareholder Returns
Dividend History:
HTGC has a consistent record of paying dividends since 2012. The current annual dividend payout is $1.40 per share, representing a yield of approximately 6.2%.
Shareholder Returns:
Over the past five years, HTGC has delivered strong shareholder returns, outperforming major market indices like the S&P 500.
Growth Trajectory
Historical Growth:
HTGC has demonstrated consistent revenue and earnings growth over the past five years, benefitting from strong demand in its target markets.
Future Growth Projections:
Analysts expect continued growth for HTGC, driven by increasing demand for venture capital and private equity financing, particularly in technology and life sciences.
Growth Initiatives:
HTGC is actively pursuing growth initiatives through expanding its product offerings, entering new markets, and seeking strategic partnerships.
Market Dynamics
Industry Overview:
The specialty finance industry is characterized by fragmented competition, diverse players, and increasing regulatory scrutiny. The rise of fintech and alternative lending platforms adds further challenges.
Hercules Capital's Positioning:
HTGC is well-positioned within the market with its strong brand recognition, experienced team, and diversified portfolio. The company's focus on niche sectors and customized solutions provides a competitive advantage.
Competitors
Key Competitors:
- FS KKR Capital Corp. (FSK)
- Golub Capital BDC, Inc. (GBDC)
- TPG RE Finance Trust (TRTX)
- Solar Capital Ltd. (SLRC)
- Main Street Capital Corp. (MAIN)
Competitive Advantages:
- Deep industry expertise and long-standing relationships.
- Flexible and tailored financing solutions.
- Strong track record of performance and low credit losses.
Competitive Disadvantages:
- Smaller market share compared to some larger competitors.
- Exposure to interest rate fluctuations and market volatility.
Potential Challenges & Opportunities
Key Challenges:
- Maintaining portfolio quality amid economic uncertainties.
- Managing rising interest rates and potential impact on borrowers.
- Increased competition from alternative lending platforms.
Potential Opportunities:
- Expanding into new market segments like healthcare or clean energy.
- Developing innovative financial products and solutions.
- Pursuing strategic acquisitions to enhance capabilities and market reach.
Recent Acquisitions
Hercules Capital has not made any acquisitions in the last three years.
AI-Based Fundamental Rating & Analysis
Based on an AI analysis of publicly available financial data, HTGC receives a score of 8 out of 10. This score is driven by the company's solid financial performance, healthy balance sheet, and attractive dividend yield. However, potential challenges like rising interest rates and increased competition could impact future growth.
Disclaimer
This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.
Sources
- Hercules Capital, Inc. Investor Relations website
- SEC filings
- Zacks Research
- Yahoo Finance
- MarketWatch
- S&P Global Market Intelligence
About Hercules Capital Inc
Exchange NYSE | Headquaters San Mateo, CA, United States | ||
IPO Launch date 2005-06-09 | CEO, Chief Investment Officer, President & Director Mr. Scott Bluestein | ||
Sector Financial Services | Industry Asset Management | Full time employees 100 | Website https://www.htgc.com |
Full time employees 100 | Website https://www.htgc.com | ||
Hercules Capital, Inc. is a business development company. The firm specializing in providing private equity, venture debt, and growth capital to privately held venture capital-backed companies at all stages of development from mid venture to expansion stage including select publicly listed companies and select special opportunity companies that require additional capital to fund acquisitions, recapitalizations and refinancing and established-stage companies. The firm provides growth capital financing solutions for capital extension; management buy-out and corporate spin-out financing solutions; company, asset specific, or intellectual property acquisition financing; convertible, subordinated and/or mezzanine loans; domestic and international corporate expansion; vendor financing; revenue acceleration by sales and marketing development, and manufacturing expansion. It provides asset-based financing with a focus on cash flow; accounts receivable facilities; equipment loans or leases; equipment acquisition; facilities build-out and/or expansion; working capital revolving lines of credit; inventory. The firm also provides bridge financing to IPO or mergers and acquisitions or technology acquisition; dividend recapitalizations and other sources of investor liquidity; cash flow financing to protect against share price volatility; competitor acquisition; pre-IPO financing for extra cash on the balance sheet; public company financing to continue asset growth and production capacity; short-term bridge financing; and strategic and intellectual property acquisition financings. It also focuses on customized financing solutions, emerging growth, mid venture, and late venture financing. The firm invests primarily in structured debt with warrants and, to a lesser extent, in senior debt and equity investments. The firm generally seeks to invest in companies that have been operating for at least six to 12 months prior to the date of their investment. It prefers to invest in technology, SaaS Finance, energy technology, sustainable
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