Prospect Capital Corporation Common Stock (PSEC)

FairStock Score: 87/100 — HIGH CONVICTION

Key Financials

AI Analysis

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

As a Buffett/Graham-style investor, I start with business quality and price. Prospect Capital is a BDC that lends to and invests in middle-market companies. There is no obvious durable moat here; returns depend on credit selection, spread income, and capital access. The filed figures show lumpy earnings: in fiscal Q3 2026, the quarter ended 2026-03-31, net income was $56.5M and diluted EPS $0.05; fiscal Q2 2026, ended 2025-12-31, had net income $23.7M but diluted EPS -$0.01; fiscal Q1 2026, ended 2025-09-30, had net income $78.0M and diluted EPS $0.08. More sobering, fiscal Q3 2025, ended 2025-03-31, produced a net loss of $139.9M and diluted EPS -$0.39. For FY2026, ended 2026-06-30, net income was $153.7M and diluted EPS $0.06. At the $1.67 close on 2026-10-13, FairStock's P/B is 0.29 and its Graham Number is $2.78, suggesting a 39.93% margin of safety; TTM FCF was $516.3M, or a 58.9% FCF yield. But FairStock's P/E is 27.83, ROE is 3.37%, ROCE is 4.30%, and the 19.27% dividend yield looks suspiciously high. Financial health signals are poor: Piotroski F-Score 0/9 and Altman Z-Score -0.15. The 52-week range is $1.66-$3.13, so the stock is near its low. FairStock's Lynch category is none because only two years of filed results exist. I see a statistically cheap but fragile asset manager: the discount may be real value, or the market may be pricing credit deterioration.

In plain English: Prospect Capital is a financial company that lends to and invests in middle-sized businesses. Its recent results have been uneven and some financial-strength checks look weak, but the stock trades far below the value of its accounting net assets. At the close on 2026-10-13, the price looks cheap versus accounting value and cash flow, though the very high dividend and weak recent quarter point to real risk.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

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

Sources (SEC EDGAR): fiscal Q3 2026 10-Q (period ended 2026-03-31) · fiscal Q2 2026 10-Q (period ended 2025-12-31) · fiscal Q1 2026 10-Q (period ended 2025-09-30) · fiscal Q3 2025 10-Q (period ended 2025-03-31) · FY2026 10-K (period ended 2026-06-30) · FY2020 10-K (period ended 2020-08-31)

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