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Hercules Capital (HTGC) Q1 Earnings Beat on Higher Revenues
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Hercules Capital Inc.’s (HTGC - Free Report) first-quarter 2020 net investment income of 37 cents per share outpaced the Zacks Consensus Estimate by a penny. The bottom line also grew 23.3% from the year-ago reported figure.
The results reflect higher total investment income and a strong balance sheet position. However, a rise in operating expenses acted as a headwind.
Net investment income was $40.6 million, up 39.8% from the prior-year quarter.
Total Investment Income & Expenses Rise
Total investment income was $73.6 million, up 25.2% from the year-ago quarter. The upside was mainly driven by a higher average debt investment balance and rise in income from acceleration due to early loan repayments. The top line beat the Zacks Consensus Estimate of $69.8 million.
Total quarterly operating expenses increased 11% year over year to $33 million. The increase resulted from a rise in all expense components, except stock-based compensation costs.
Solid Portfolio Value & New Commitments
The fair value of Hercules Capital’s total investment portfolio was $2.3 billion as of Mar 31, 2020.
In the reported quarter, the company provided $256.8 million in new debt and equity commitments, as well as realized early loan repayments of $150.5 million.
Strong Balance Sheet Position
As of Mar 31, 2020, Hercules Capital’s net asset value was $9.92 per share compared with $10.55 on Dec 31, 2019.
The company had $438.2 million in liquidity — including $34.3 million of unrestricted cash and cash equivalents, and $403.9 million in credit facilities — as of Mar 31, 2020.
At the end of the first quarter, the weighted average cost of debt — comprising interest and fees — was 5.2%, down from 5.9% at the end of the prior-year quarter.
Our Take
Hercules Capital’s loan origination activity continues to be on track. However, elevated expense levels might hurt the bottom line to some extent. Further, lower rates remain a matter of concern.
Hercules Capital, Inc. Price, Consensus and EPS Surprise
FS KKR Capital Corp. (FSK - Free Report) , KKR & Co. Inc. (KKR - Free Report) and TriplePoint Venture Growth BDC Corp. (TPVG - Free Report) are scheduled to announce quarterly numbers on May 6.
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Hercules Capital (HTGC) Q1 Earnings Beat on Higher Revenues
Hercules Capital Inc.’s (HTGC - Free Report) first-quarter 2020 net investment income of 37 cents per share outpaced the Zacks Consensus Estimate by a penny. The bottom line also grew 23.3% from the year-ago reported figure.
The results reflect higher total investment income and a strong balance sheet position. However, a rise in operating expenses acted as a headwind.
Net investment income was $40.6 million, up 39.8% from the prior-year quarter.
Total Investment Income & Expenses Rise
Total investment income was $73.6 million, up 25.2% from the year-ago quarter. The upside was mainly driven by a higher average debt investment balance and rise in income from acceleration due to early loan repayments. The top line beat the Zacks Consensus Estimate of $69.8 million.
Total quarterly operating expenses increased 11% year over year to $33 million. The increase resulted from a rise in all expense components, except stock-based compensation costs.
Solid Portfolio Value & New Commitments
The fair value of Hercules Capital’s total investment portfolio was $2.3 billion as of Mar 31, 2020.
In the reported quarter, the company provided $256.8 million in new debt and equity commitments, as well as realized early loan repayments of $150.5 million.
Strong Balance Sheet Position
As of Mar 31, 2020, Hercules Capital’s net asset value was $9.92 per share compared with $10.55 on Dec 31, 2019.
The company had $438.2 million in liquidity — including $34.3 million of unrestricted cash and cash equivalents, and $403.9 million in credit facilities — as of Mar 31, 2020.
At the end of the first quarter, the weighted average cost of debt — comprising interest and fees — was 5.2%, down from 5.9% at the end of the prior-year quarter.
Our Take
Hercules Capital’s loan origination activity continues to be on track. However, elevated expense levels might hurt the bottom line to some extent. Further, lower rates remain a matter of concern.
Hercules Capital, Inc. Price, Consensus and EPS Surprise
Hercules Capital, Inc. price-consensus-eps-surprise-chart | Hercules Capital, Inc. Quote
Currently, Hercules Capital carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Date of Other Finance Stocks
FS KKR Capital Corp. (FSK - Free Report) , KKR & Co. Inc. (KKR - Free Report) and TriplePoint Venture Growth BDC Corp. (TPVG - Free Report) are scheduled to announce quarterly numbers on May 6.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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