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Hercules Capital Inc.’s HTGC fourth-quarter 2024 net investment income of 49 cents per share matched the Zacks Consensus Estimate. The bottom line, however, declined 12.5% from the year-ago quarter.
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Results primarily benefited from a decent balance sheet position and robust funding commitments. However, lower net investment income and a rise in operating expenses were headwinds.
Net investment income was $81.1 million, down 5.7% year over year.
For 2024, net investment income per share of $2.00 lagged the consensus estimate of $2.01 and declined 3.8% year over year. Net investment income was $325.8 million, up 7.2% from 2023.
HTGC Investment Income Down, Expenses Rise
Total investment income in the fourth quarter was $121.8 million, down marginally from the year-ago quarter. Also, the top line lagged the Zacks Consensus Estimate of $124.09 million. The fall was mainly due to a lower weighted average yield on the debt investment portfolio.
For 2024, total investment income grew 7.1% to $493.6 million. The top line lagged the Zacks Consensus Estimate of $495.9 million.
Total gross operating expenses jumped 13.9% to $43.5 million. The rise was due to an increase in all cost components except loan fees.
HTGC Portfolio Value & New Commitments Remain Solid
The fair value of Hercules Capital’s total investment portfolio was $3.66 billion as of Dec. 31, 2024.
In the fourth quarter, the company delivered $619.5 million in gross new debt and equity commitments and $468 million in gross new funding. It realized early loan repayments of $225.2 million.
Hercules Capital’s Balance Sheet Position Decent
As of Dec. 31, 2024, Hercules Capital’s net asset value was $11.66 per share, up from $11.43 as of Dec. 31, 2023.
As of Dec. 31, 2024, the company had $658.8 million in liquidity, including $113.1 million of unrestricted cash and cash equivalents, and $545.7 million in credit facilities and SBA debenture.
At the end of the quarter, the weighted average cost of debt, comprising interest and fees, was 5%, up from 4.9% at the end of the prior-year quarter.
Our View on HTGC Stock
Hercules Capital’s absence of global diversification limits the company’s growth prospects. Further, efforts to improve originations will likely keep expenses elevated, hurting bottom-line expansion. Nonetheless, rising demand for customized financing will likely aid total investment income.
Hercules Capital Stock Price, Consensus and EPS Surprise
Hercules Capital, Inc. price-consensus-eps-surprise-chart | Hercules Capital, Inc. Quote