Hercules Capital Inc. Common Stock (HTGC)

FairStock Score: 91/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for businesses that earn good returns on capital and sell at sensible prices. Hercules Capital is a business development company that provides venture debt and growth capital to private, venture-backed firms. In the quarter ended 2026-06-30, it reported net income of $130.2 million and diluted EPS of $0.67, up from $78.9 million and $0.43 in the quarter ended 2025-06-30. For FY2025, net income was $339.7 million and diluted EPS $1.85; FY2024 was $263.0 million and $1.61; FY2023 was $337.5 million and $2.31. That is not smooth, but the long-term earnings record is real. FairStock's calculations at the 2026-10-13 close show a P/E of 8.12 and P/B of 1.33, with ROE of 17.32% and ROCE of 6.60%. The dividend yield is 10.85%, the Graham Number is $23.50, and the margin of safety is 30.21%. The PEG ratio is 0.12. The FairStock Score is 91/100, and its rule labels the company a Stalwart, based on profit growth of 8.4% a year over five years. The moat is not wide: as a lender, Hercules depends on credit discipline, deal access, and cost of funds. Financial health is mixed. D/E is 1.03, Piotroski F-Score is 6/9, and Altman Z-Score is 0.83, while trailing FCF is only $8.4 million for a 0.3% FCF yield. A 10.85% yield is attractive only if credit losses stay contained. At 1.33 times book and 8.12 times earnings, the price looks modest, but the low Altman score and lumpy quarterly earnings argue for caution. This is a show-me story: income is strong, but cash flow and credit quality need watching.

In plain English: Hercules Capital lends money to growing private companies, often ones backed by venture capital. The business looks profitable and pays a very large dividend, but its cash generation after investments is thin and quarterly results can swing sharply. At the recent price, the shares look inexpensive compared with the company's earnings and accounting value.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer