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Hercules Capital (HTGC) Q3 Earnings Beat, Revenues Rise Y/Y
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Hercules Capital Inc.’s (HTGC - Free Report) third-quarter 2020 net investment income of 34 cents per share surpassed the Zacks Consensus Estimate of 32 cents. However, the bottom line declined 8.1% from the year-ago reported figure.
Results were aided by an improvement in total investment income. Moreover, the balance sheet position remained strong during the quarter. However, a rise in operating expenses was a headwind.
Net investment income was $38.7 million, down marginally from the prior-year quarter.
Total Investment Income & Expenses Rise
Total investment income was $70.3 million, up 1.6% from the year-ago quarter. The upside was mainly driven by higher average debt investment balances, partly offset by lower core yields. The top line surpassed the Zacks Consensus Estimate of $68 million.
Total operating expenses increased 4.1% year over year to $31.6 million. The rise resulted from higher total employee compensation costs.
Portfolio Value & New Commitments Solid
The fair value of Hercules Capital’s total investment portfolio was $2.42 billion as of Sep 30, 2020.
In the reported quarter, the company delivered $514.3 million in new debt and equity commitments as well as realized early loan repayments of $190.8 million.
Balance Sheet Position Strong
As of Sep 30, 2020, Hercules Capital’s net asset value was $10.26 per share compared with $10.55 on Dec 31, 2019.
The company had $465.1 million in liquidity — including $27.6 million of unrestricted cash and cash equivalents, and $437.5 million in credit facilities — as of Sep 30, 2020.
At the end of the third quarter, the weighted average cost of debt — comprising interest and fees — was 5.1%, in line with the prior-year quarter end.
Our Take
Hercules Capital’s loan origination activity continues to be on track, which will likely support the top line in the quarters ahead. However, as the company continues to undertake efforts to improve originations; expenses are expected to increase in the near term, thereby, hurting profits to an extent.
Hercules Capital, Inc. Price, Consensus and EPS Surprise
Performance & Earnings Release Dates of Other Finance Stocks
Ares Capital Corporation’s (ARCC - Free Report) third-quarter 2020 core earnings of 39 cents per share beat the Zacks Consensus Estimate by a penny. However, the bottom line declined 18.8% year over year.
TriplePoint Venture Growth BDC Corp. (TPVG - Free Report) and FS KKR Capital Corp. (FSK - Free Report) are scheduled to announce quarterly numbers on Nov 5 and Nov 9, respectively.
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The 2020 Election Stock Report reveals specific stocks you’ll want to own immediately after the results are announced – 6 if Trump wins, 6 if Biden wins. Past election reports have led investors to gains of +71%, +83%, even +185% in the following months. This year’s picks could be even more lucrative.
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Hercules Capital (HTGC) Q3 Earnings Beat, Revenues Rise Y/Y
Hercules Capital Inc.’s (HTGC - Free Report) third-quarter 2020 net investment income of 34 cents per share surpassed the Zacks Consensus Estimate of 32 cents. However, the bottom line declined 8.1% from the year-ago reported figure.
Results were aided by an improvement in total investment income. Moreover, the balance sheet position remained strong during the quarter. However, a rise in operating expenses was a headwind.
Net investment income was $38.7 million, down marginally from the prior-year quarter.
Total Investment Income & Expenses Rise
Total investment income was $70.3 million, up 1.6% from the year-ago quarter. The upside was mainly driven by higher average debt investment balances, partly offset by lower core yields. The top line surpassed the Zacks Consensus Estimate of $68 million.
Total operating expenses increased 4.1% year over year to $31.6 million. The rise resulted from higher total employee compensation costs.
Portfolio Value & New Commitments Solid
The fair value of Hercules Capital’s total investment portfolio was $2.42 billion as of Sep 30, 2020.
In the reported quarter, the company delivered $514.3 million in new debt and equity commitments as well as realized early loan repayments of $190.8 million.
Balance Sheet Position Strong
As of Sep 30, 2020, Hercules Capital’s net asset value was $10.26 per share compared with $10.55 on Dec 31, 2019.
The company had $465.1 million in liquidity — including $27.6 million of unrestricted cash and cash equivalents, and $437.5 million in credit facilities — as of Sep 30, 2020.
At the end of the third quarter, the weighted average cost of debt — comprising interest and fees — was 5.1%, in line with the prior-year quarter end.
Our Take
Hercules Capital’s loan origination activity continues to be on track, which will likely support the top line in the quarters ahead. However, as the company continues to undertake efforts to improve originations; expenses are expected to increase in the near term, thereby, hurting profits to an extent.
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.
Performance & Earnings Release Dates of Other Finance Stocks
Ares Capital Corporation’s (ARCC - Free Report) third-quarter 2020 core earnings of 39 cents per share beat the Zacks Consensus Estimate by a penny. However, the bottom line declined 18.8% year over year.
TriplePoint Venture Growth BDC Corp. (TPVG - Free Report) and FS KKR Capital Corp. (FSK - Free Report) are scheduled to announce quarterly numbers on Nov 5 and Nov 9, respectively.
Have You Seen Zacks’ 2020 Election Stock Report?
The upcoming election could be a massive buying opportunity for savvy investors. Trillions of dollars will shift into new market sectors after the election. The question is, which sectors will soar for each candidate? Zacks has put together a new special report to help readers like you target big profits.
The 2020 Election Stock Report reveals specific stocks you’ll want to own immediately after the results are announced – 6 if Trump wins, 6 if Biden wins. Past election reports have led investors to gains of +71%, +83%, even +185% in the following months. This year’s picks could be even more lucrative.
Check out Zacks’ 2020 Election Stock Report >>