Hercules Capital (NYSE:HTGC) Posts Quarterly Earnings Results, Beats Expectations By $0.02 EPS

Hercules Capital (NYSE:HTGC) released its earnings results on Thursday. The financial services provider reported $0.50 earnings per share for the quarter, beating the consensus estimate of $0.48 by $0.02, Zacks reports. Hercules Capital had a net margin of 67.68% and a return on equity of 16.13%. The business had revenue of $134.41 million during the quarter, compared to analysts’ expectations of $146.71 million. During the same period last year, the business earned $0.50 earnings per share. The firm’s revenue was up 8.4% on a year-over-year basis.

Here are the key takeaways from Hercules Capital’s conference call:

• Record quarterly performance: Total investment income reached $149.1 million and net investment income was $92.9 million, or $0.50 per share. NII covered the base distribution by 125% and the full distribution, including the $0.07 supplemental, by 106%.
• Hercules reported record first-half originations of $2.74 billion, up 35.6% year over year, while assets under management grew 14.4% to approximately $6.1 billion. Management expects both the public BDC and private-credit funds to contribute to future growth.
• Credit performance remained relatively stable, with non-accrual investments representing just 0.1% of portfolio fair value, while leverage declined materially to 103.9% on a GAAP basis and available BDC liquidity stood at $652.9 million. The company also issued $325 million of five-year unsecured notes after quarter-end to support refinancing and future originations.
• Prepayments surged to $572.1 million in Q2 but are expected to normalize to $200 million-$300 million in Q3, reducing prepayment-related revenue. Management also guided core yield lower to 11.8%-12% as higher-yielding legacy assets are replaced and the impact of prior rate cuts continues.
• Management noted that banks and other lenders have become increasingly aggressive on deal structures, while a growing number of companies in the pipeline may not meet Hercules’ underwriting standards. Q3 originations are expected to be seasonally lower and back-end weighted.

Hercules Capital Price Performance

Hercules Capital stock traded up $0.52 during trading hours on Friday, reaching $16.46. 2,309,787 shares of the stock were exchanged, compared to its average volume of 1,384,773. The company has a current ratio of 1.89, a quick ratio of 1.89 and a debt-to-equity ratio of 1.14. Hercules Capital has a twelve month low of $13.70 and a twelve month high of $19.67. The company has a market cap of $3.08 billion, a P/E ratio of 8.19 and a beta of 0.79. The stock has a 50 day moving average of $15.71 and a two-hundred day moving average of $15.84.

Hercules Capital Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, August 18th. Shareholders of record on Tuesday, August 11th will be paid a dividend of $0.40 per share. The ex-dividend date is Tuesday, August 11th. This is a positive change from Hercules Capital’s previous quarterly dividend of $0.07. This represents a $1.60 dividend on an annualized basis and a yield of 9.7%. Hercules Capital’s dividend payout ratio is currently 90.40%.

Institutional Inflows and Outflows

A number of hedge funds have recently added to or reduced their stakes in HTGC. LPL Financial LLC increased its stake in shares of Hercules Capital by 1.6% in the 4th quarter. LPL Financial LLC now owns 1,823,405 shares of the financial services provider’s stock valued at $34,316,000 after purchasing an additional 29,292 shares during the last quarter. UBS Group AG grew its position in Hercules Capital by 14.4% in the third quarter. UBS Group AG now owns 1,318,768 shares of the financial services provider’s stock valued at $24,938,000 after acquiring an additional 165,762 shares during the last quarter. Qube Research & Technologies Ltd raised its stake in Hercules Capital by 77.0% during the third quarter. Qube Research & Technologies Ltd now owns 1,027,274 shares of the financial services provider’s stock worth $19,426,000 after acquiring an additional 446,860 shares in the last quarter. Franklin Resources Inc. raised its stake in Hercules Capital by 5.0% during the fourth quarter. Franklin Resources Inc. now owns 975,355 shares of the financial services provider’s stock worth $18,356,000 after acquiring an additional 46,726 shares in the last quarter. Finally, Voloridge Investment Management LLC lifted its holdings in shares of Hercules Capital by 22.2% in the fourth quarter. Voloridge Investment Management LLC now owns 707,651 shares of the financial services provider’s stock worth $13,318,000 after acquiring an additional 128,790 shares during the last quarter. 19.69% of the stock is owned by institutional investors.

More Hercules Capital News

Here are the key news stories impacting Hercules Capital this week:

• Positive Sentiment: In-line earnings and record investment income: HTGC reported second-quarter earnings of $0.50 per share, matching estimates and the year-ago result. Total investment income rose 8.5%, helping produce record first-half results and supporting the company’s ability to fund shareholder distributions. HTGC Q2 Earnings Meet Estimates, Stock Up on Record Investment Income
• Positive Sentiment: Positive analyst stance: Ladenburg Thalmann lowered its price target from $21 to $20 but maintained a “buy” rating, implying approximately 21.5% upside from the referenced $16.46 share price. Ladenburg Thalmann HTGC Price Target Update
• Positive Sentiment: Distribution supported by earnings: Hercules announced a quarterly distribution that management said was backed by earnings, reinforcing the stock’s appeal to income-focused investors. Hercules Capital Announces Strong Q2 Distribution Backed by Earnings
• Neutral Sentiment: Expected portfolio activity: Management anticipates $200 million to $300 million of prepayments in the third quarter while targeting an 11.8%–12% core yield. Prepayments can generate gains and reinvestment opportunities but may temporarily reduce interest income if replacement investments are delayed. Hercules Capital Q3 Prepayment and Core Yield Outlook
• Negative Sentiment: Revenue missed expectations: Quarterly revenue was $134.41 million, below the $146.71 million consensus estimate. Higher expenses also weighed on results, limiting the benefit from stronger investment income. Hercules Capital Reports Second Quarter 2026 Financial Results

Analyst Ratings Changes

HTGC has been the topic of a number of recent analyst reports. LADENBURG THALM/SH SH lowered their price target on Hercules Capital from $21.00 to $20.00 and set a “buy” rating on the stock in a research report on Friday. Citizens Jmp decreased their price target on shares of Hercules Capital from $24.00 to $22.00 and set a “market outperform” rating on the stock in a research note on Wednesday, April 22nd. Keefe, Bruyette & Woods reduced their price objective on Hercules Capital from $19.00 to $18.00 and set an “outperform” rating for the company in a report on Thursday, April 16th. Piper Sandler increased their target price on Hercules Capital from $16.50 to $17.00 and gave the stock a “neutral” rating in a research note on Wednesday, May 6th. Finally, UBS Group boosted their price target on Hercules Capital from $15.00 to $15.50 and gave the company a “neutral” rating in a research note on Monday, May 18th. One analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating and three have issued a Hold rating to the stock. Based on data from MarketBeat, the company presently has an average rating of “Moderate Buy” and an average price target of $18.46.

Hercules Capital Company Profile

Hercules Capital, Inc is a specialty finance company organized as a business development company (BDC) that provides tailored debt financing solutions to high‐growth companies. Through its external management structure, Hercules Capital extends senior secured loans, subordinated debt and growth capital designed to support research and development, expansion initiatives and working capital needs. The firm primarily partners with venture capital and private equity sponsors to finance innovative enterprises across various developmental stages.

The company’s investment portfolio is concentrated in technology, life sciences and sustainable and renewable technology sectors, reflecting its focus on industries with strong growth prospects and recurring capital requirements.