PennantPark Floating Rate Capital Ltd. Common Stock (PFLT)

FairStock Score: 40/100 — MIXED

Key Financials

AI Analysis

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

As a value investor, I start with what is verifiable. PennantPark is a private-debt business development company that lends $2 million to $20 million to middle-market companies, mostly in the U.S., through floating-rate loans. That can be a useful niche, but I do not see a wide moat; origination relationships matter, yet credit cycles dominate. Financial health is the weak link. FairStock shows D/E of 1.55, trailing free cash flow of -$58.4 million and an FCF yield of -9.1%; Altman Z is 0.13 and Piotroski is 5/9. A 14.26% dividend yield is attractive only if it is covered, and negative free cash flow makes coverage a central question. Valuation is the counterweight. At the $6.44 close on 2026-10-26, FairStock calculates P/B of 0.62, P/E of 12.63 and a Graham Number of $10.85, implying a 41.20% margin of safety; beta is 0.77. The company is therefore an asset play, not a high-return compounder. Growth is lumpy: filed net income was $91.8 million in FY2024 (period ended 2024-09-30) and $66.4 million in FY2025 (period ended 2025-09-30); fiscal Q1 2026 (quarter ended 2025-12-31) was -$3.6 million, fiscal Q2 2026 (quarter ended 2026-03-31) was $28.7 million, and fiscal Q3 2026 (quarter ended 2026-06-30) was $7.6 million versus $19.3 million in fiscal Q3 2025 (quarter ended 2025-06-30). I would want the discount to compensate for leverage, credit risk and uneven earnings.

In plain English: PennantPark Floating Rate Capital lends money to middle-sized private companies, mostly through loans whose interest payments move with rates. The business has made money, but results are uneven and cash flow has been negative. At $6.44, the stock looks cheap compared with the value of its assets on the books, though the high dividend comes with real risk.

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Data as of 2026-10-26 close · note generated 2026-10-28 · model deepseek-flash

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

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