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It's been a good week for Hercules Capital, Inc. (NYSE:HTGC) shareholders, because the company has just released its latest annual results, and the shares gained 3.1% to US$21.27. Revenues of US$494m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$1.61, missing estimates by 8.4%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Hercules Capital after the latest results.
View our latest analysis for Hercules Capital
After the latest results, the nine analysts covering Hercules Capital are now predicting revenues of US$534.0m in 2025. If met, this would reflect a meaningful 8.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 30% to US$1.97. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$521.7m and earnings per share (EPS) of US$1.99 in 2025. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a modest lift to to revenue forecasts.
Even though revenue forecasts increased, there was no change to the consensus price target of US$20.97, suggesting the analysts are focused on earnings as the driver of value creation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Hercules Capital at US$25.00 per share, while the most bearish prices it at US$16.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Hercules Capital's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 8.2% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.7% per year. So it's pretty clear that, while Hercules Capital's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.