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4 Reasons to Invest in Horizon Technology (HRZN) Stock Now
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Horizon Technology Finance Corporation (HRZN - Free Report) stock looks like an attractive pick right now, given its solid fundamentals and good growth prospects. Hence, it seems a good idea to add the stock to your portfolio now.
The company has been witnessing upward earnings estimate revisions of late, reflecting analysts’ optimism regarding its earnings growth potential. Over the past 60 days, the Zacks Consensus Estimate for HRZN’s 2023 earnings has been revised 9.5% upward. Thus, the company currently carries a Zacks Rank #2 (Buy).
In the past year, shares of HRZN have lost 7.7% compared with the industry’s decline of 3.8%.
Image Source: Zacks Investment Research
Given its robust fundamentals and solid Zacks Rank, the company’s price performance is expected to improve in the near term.
We have mentioned some factors below that make Horizon Technology stock a solid pick now.
Earnings Growth: The company’s earnings witnessed growth of 5% in the last three to five years, higher than the industry average of 1%. The uptrend is expected to continue in the near term. In 2023, HRZN’s earnings are projected to grow 26.7%.
Moreover, HRZN has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 20.5%.
Revenue Strength: Horizon Technology’s total investment income witnessed a compound annual growth rate of 26.3% over the last four years (2018-2022), with the uptrend continuing in the first six months of 2023. The top line is expected to continue to grow in the near term, which can be seen from the projected sales growth rates of 42.4% for 2023 and 3.6% for 2024.
Superior Return on Equity (ROE): Horizon Technology currently has an ROE of 15.64%, higher than the industry average of 11.86%. This shows that the company reinvests its cash more efficiently than its peers.
Favorable Valuation: The HRZN stock looks undervalued right now when compared with its peers. It has a price/cash flow ratio of 8.73, lower than the industry average of 9.37. Also, its price/earnings (F1) ratio of 6.77 compares favorably with the industry’s 7.10.
The consensus estimate for SEIC’s current-year earnings has been revised 3.8% upward over the past 60 days. Over the past three months, SEIC’s share price has increased 4.4%.
Moody’s current-year earnings estimates have been revised 2.7% upward over the past 60 days. MCO’s shares have gained 5.5% over the past three months.
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4 Reasons to Invest in Horizon Technology (HRZN) Stock Now
Horizon Technology Finance Corporation (HRZN - Free Report) stock looks like an attractive pick right now, given its solid fundamentals and good growth prospects. Hence, it seems a good idea to add the stock to your portfolio now.
The company has been witnessing upward earnings estimate revisions of late, reflecting analysts’ optimism regarding its earnings growth potential. Over the past 60 days, the Zacks Consensus Estimate for HRZN’s 2023 earnings has been revised 9.5% upward. Thus, the company currently carries a Zacks Rank #2 (Buy).
In the past year, shares of HRZN have lost 7.7% compared with the industry’s decline of 3.8%.
Image Source: Zacks Investment Research
Given its robust fundamentals and solid Zacks Rank, the company’s price performance is expected to improve in the near term.
We have mentioned some factors below that make Horizon Technology stock a solid pick now.
Earnings Growth: The company’s earnings witnessed growth of 5% in the last three to five years, higher than the industry average of 1%. The uptrend is expected to continue in the near term. In 2023, HRZN’s earnings are projected to grow 26.7%.
Moreover, HRZN has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 20.5%.
Revenue Strength: Horizon Technology’s total investment income witnessed a compound annual growth rate of 26.3% over the last four years (2018-2022), with the uptrend continuing in the first six months of 2023. The top line is expected to continue to grow in the near term, which can be seen from the projected sales growth rates of 42.4% for 2023 and 3.6% for 2024.
Superior Return on Equity (ROE): Horizon Technology currently has an ROE of 15.64%, higher than the industry average of 11.86%. This shows that the company reinvests its cash more efficiently than its peers.
Favorable Valuation: The HRZN stock looks undervalued right now when compared with its peers. It has a price/cash flow ratio of 8.73, lower than the industry average of 9.37. Also, its price/earnings (F1) ratio of 6.77 compares favorably with the industry’s 7.10.
Other Key Picks
A couple of other top-ranked stocks from the finance space are SEI Investments Company (SEIC - Free Report) and Moody's Corporation (MCO - Free Report) . SEIC and MCO currently carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The consensus estimate for SEIC’s current-year earnings has been revised 3.8% upward over the past 60 days. Over the past three months, SEIC’s share price has increased 4.4%.
Moody’s current-year earnings estimates have been revised 2.7% upward over the past 60 days. MCO’s shares have gained 5.5% over the past three months.