Prospect Capital Corporation (PSEC) AI Stock Analysis

Prospect Capital Corporation operates as a business development company that provides customized financial solutions to middle-market companies across sectors including energy, healthcare, technology, and consumer services. The company participates in mezzanine finance, leveraged buyouts, refinancing, and growth capital. Its investment strategies feature secured debt, senior and subordinated loans, equity investments, collateralized loan obligations, unitranche debt, and multi-family residential real estate. Prospect Capital generally deploys between $10 million and $500 million per transaction, focusing on businesses with EBITDA between $5 million and $150 million and enterprise values between $5 million and $1 billion.

Prospect Capital reported FY2026 revenue of $639.5M, rebounding from -$276.8M in FY2025 and $467.4M in FY2024. Net income for FY2026 reached $153.7M with a net margin of 24.0% and EPS of $0.67, compared to a net income of -$469.9M in FY2025. Over the 5-year period from FY2021 to FY2026, revenue recorded a CAGR of -8.9%. In the latest quarter ended June 30, 2026, quarterly revenue fell 6.7% year-over-year, while quarterly earnings declined 78.2% year-over-year. Operating margin for FY2026 stood at 51.0%, while the trailing twelve-month operating margin was 70.3%.

As of June 30, 2026, Prospect Capital held $43.6M in cash and short-term investments alongside total debt of $1.86B, resulting in net debt of $1.82B. Total assets stood at $6.45B against shareholders' equity of $4.50B, yielding a debt-to-equity ratio of 0.41 and a current ratio of 0.11. Operating cash flow and free cash flow in FY2026 both totaled $516.3M. In FY2026, capital deployment included $335.5M paid in dividends and $10.9M in share buybacks, while the share count expanded 14.8% over 5 years.

Prospect Capital carries a market cap of $854.1M and an enterprise value of $4.22B. It trades at a trailing P/E of 26.7x, above the 12.1x median of its US-listed Financial Services peers, though its forward P/E of 9.4x is below the peer median of 10.8x. Its price-to-book stands at 0.4x and EV-to-revenue is 17.2x. Over the past year, the stock fell 29.8%, contrasting with a 16.8% gain for the S&P 500 benchmark. Over five years, the stock dropped 61.8% while the S&P 500 rose 83.0%.

Prospect Capital pays a monthly dividend with an annualized forward rate of $0.42 per share, yielding 26.25% based on a last close of $1.60. The payout ratio stands at 20.9%, and the company has paid dividends for 23 consecutive years. Over the past 5 years, dividend growth annualized at -5.6%. The last ex-dividend date was October 28, 2026.

Wall Street coverage includes 1 analyst rating, categorized as Strong Sell. The mean price target is $2.00, representing an upside of 25.0% over the last close of $1.60. For the fiscal year ending June 30, 2027, consensus estimates forecast EPS of $0.38 on revenue of $620.6M. The company beat EPS estimates in each of the last 4 quarters, and its next earnings date is scheduled for November 5, 2026.

This page is an AI-written research summary of Prospect Capital Corporation (PSEC). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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