Prospect Capital Corporation
- Open
- 2.33
- Day high
- 2.34
- Day low
- 2.25
- Prev close
- 2.33
- Volume
- 3.1M
- Mkt cap
- $1.1B
- P/E (TTM)
- —
- EPS (TTM)
- —
- P/B
- 0.2
- P/S
- 11.3
- Yield
- 23.11%
- Per share
- $0.52
- ▲Insiders net buying $6.2M over the last 3 months (8 open-market buys, 0 sales)
- 🏛Institutions mixed (13F)
Prospect Capital Corporation (PSEC) is a Financial Services company listed on NASDAQ. The stock is down 34% over the past year. Over the trailing 3 months, insiders filed 8 open-market buys and 0 sales (SEC Form 4). Drillr has 1 published research article covering PSEC.
Prospect Capital Corporation (PSEC) financials & analyst ratings
Fundamentals (TTM)
Source: exchange market data + company filings. Figures are trailing-twelve-month or as most recently reported. For informational purposes only — not investment advice.
PSEC earnings date, history & EPS estimates
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| May 8, 2026 | $0.11 | $0.16 | +44.3% | $150M | -8.1% |
| Nov 6, 2025 | $0.10 | $0.17 | +70.0% | $121M | -22.3% |
| Aug 26, 2025 | $0.13 | $0.17 | +30.8% | $-150M | -190.7% |
| May 8, 2025 | $0.14 | $0.19 | +35.7% | $-93M | -155.7% |
| Nov 8, 2024 | $0.17 | $0.21 | +23.5% | $-82M | -140.1% |
| Aug 28, 2024 | $0.18 | $0.25 | +38.9% | $398M | +93.6% |
| May 8, 2024 | $0.20 | $0.23 | +15.0% | $132M | -35.9% |
| Feb 8, 2024 | $0.22 | $0.24 | +9.1% | $211M | -6.1% |
| Aug 29, 2023 | $0.21 | $0.23 | +9.5% | $16M | -86.6% |
| Feb 8, 2023 | $0.26 | $0.27 | +3.8% | $82M | -61.5% |
| Nov 9, 2022 | $0.20 | $0.25 | +25.0% | $203M | +8.7% |
| Aug 29, 2022 | $0.19 | $0.21 | +10.5% | $174M | -1.3% |
PSEC insider trading activity (SEC Form 4)
| Date | Insider | Type | Shares | Price |
|---|---|---|---|---|
| Jun 25, 2026 | Barry John Fdirector, 10 percent owner, officer: CHIEF EXECUTIVE OFFICER | Buy | 67,648 | $2.27 |
| Jun 25, 2026 | Barry John Fdirector, 10 percent owner, officer: CHIEF EXECUTIVE OFFICER | Buy | 1,000,000 | $2.27 |
| Jun 24, 2026 | Barry John Fdirector, 10 percent owner, officer: CHIEF EXECUTIVE OFFICER | Buy | 1,000,000 | $2.25 |
| May 28, 2026 | Barry John Fdirector, 10 percent owner, officer: CHIEF EXECUTIVE OFFICER | Buy | 430,000 | $2.32 |
| May 28, 2026 | Barry John Fdirector, 10 percent owner, officer: CHIEF EXECUTIVE OFFICER | Buy | 3,000 | $2.33 |
| May 27, 2026 | Barry John Fdirector, 10 percent owner, officer: CHIEF EXECUTIVE OFFICER | Buy | 100,000 | $2.33 |
| May 27, 2026 | Barry John Fdirector, 10 percent owner, officer: CHIEF EXECUTIVE OFFICER | Buy | 32,000 | $2.29 |
| May 26, 2026 | Barry John Fdirector, 10 percent owner, officer: CHIEF EXECUTIVE OFFICER | Buy | 100,000 | $2.28 |
| Feb 13, 2026 | Eliasek M Grierdirector, officer: Chief Operating Officer | Buy | 942,800 | $2.92 |
| Sep 29, 2025 | Barry John Fdirector, 10 percent owner, officer: CHIEF EXECUTIVE OFFICER | Buy | 925,000 | $2.72 |
| Sep 29, 2025 | Eliasek M Grierdirector, officer: Chief Operating Officer | Buy | 370,000 | $2.71 |
| Sep 26, 2025 | Barry John Fdirector, 10 percent owner, officer: CHIEF EXECUTIVE OFFICER | Buy | 741,158 | $2.62 |
| Sep 25, 2025 | Barry John Fdirector, 10 percent owner, officer: CHIEF EXECUTIVE OFFICER | Buy | 384,000 | $2.66 |
| Sep 24, 2025 | Barry John Fdirector, 10 percent owner, officer: CHIEF EXECUTIVE OFFICER | Buy | 374,500 | $2.66 |
| Sep 19, 2025 | Stark Eugene Sdirector | Buy | 2,500 | $2.79 |
Source: PSEC SEC Form 4 filings, latest Jun 25, 2026. For informational purposes only — not investment advice.
See the full PSEC insider & 13F page →Prospect Capital Corporation company profile
Overview
Prospect Capital Corporation (NASDAQ:PSEC) is a business development company founded in 2004 that specializes in providing financing solutions to middle-market companies. As one of the largest publicly traded business development companies in the United States, Prospect Capital has deployed over $20 billion across more than 400 investments since its inception. The company operates as an externally managed investment fund that focuses on debt and equity investments in private companies, with additional exposure to real estate and structured credit products.
Business
Prospect Capital operates as a business development company (BDC), which is a specialized type of investment company regulated under the Investment Company Act of 1940. BDCs are designed to provide capital to small and medium-sized businesses that may have difficulty accessing traditional bank financing or public capital markets. The company's core business involves providing various forms of financing to middle-market companies, which are typically businesses with annual revenues between $25 million and $500 million and EBITDA between $5 million and $150 million. Prospect Capital's investment portfolio is diversified across multiple asset classes and structures: • First Lien Debt (65.5% of portfolio): Senior secured loans that have the highest priority in a company's capital structure, meaning they get paid first in case of bankruptcy or liquidation. This represents the company's largest and fastest-growing segment, providing relatively stable income with lower risk. • Second Lien Debt (10.5% of portfolio): Subordinated secured debt that ranks below first lien debt but above unsecured debt and equity. These investments typically offer higher yields than first lien debt but carry increased risk. • Unsecured Debt and Equity Investments (19.8% of portfolio): This includes various forms of mezzanine financing, preferred equity, and common equity stakes in portfolio companies. These investments often provide both current income and potential upside through equity appreciation. • Subordinated Structured Notes (4.2% of portfolio): Investments in collateralized loan obligations (CLOs) and other structured credit products. The company has been strategically reducing this segment over time. Beyond traditional middle-market lending, Prospect Capital operates a real estate investment platform through its private REIT strategy, focusing on multifamily residential properties, student housing, self-storage facilities, and senior living communities. The company has invested in over 110 properties with an aggregate initial value of approximately $4 billion.
Revenue model
Prospect Capital generates revenue primarily through interest income from its debt investments and dividend income from its equity holdings. As a BDC, the company is required to distribute at least 90% of its taxable income to shareholders to maintain its tax-advantaged status, similar to a real estate investment trust (REIT). The company's revenue streams include: 1. Interest Income: The majority of revenue comes from interest payments on first lien, second lien, and unsecured debt investments. The portfolio currently generates an 11.5% annualized yield on performing interest-bearing investments. 2. Fee Income: Prospect Capital earns various fees from portfolio companies, including origination fees, structuring fees, and monitoring fees for ongoing advisory services. 3. Capital Gains: When the company exits equity investments or realizes gains on debt investments, these contribute to total returns, though they can be volatile. 4. Real Estate Income: Through its private REIT platform, the company generates rental income and capital appreciation from its property portfolio. The company's paying customers are primarily middle-market private companies seeking growth capital, acquisition financing, or refinancing solutions. These businesses often cannot access public debt markets due to their size and may find traditional bank financing insufficient for their needs. Several factors influence Prospect Capital's margins and profitability: Positive margin drivers include rising interest rates (as most loans are floating rate), successful portfolio company performance leading to lower defaults, efficient capital deployment, and the company's focus on moving toward higher-yielding first lien investments. Negative margin drivers include credit deterioration in the portfolio leading to non-performing loans, increased competition in middle-market lending compressing spreads, rising funding costs, and economic downturns that could impact portfolio company performance. The company's relatively low leverage compared to peers provides some protection but also limits potential returns.
Competitive moat
Prospect Capital's competitive advantages are moderate and primarily stem from its scale, established relationships, and diversified funding sources rather than from strong structural moats. The company's key competitive strengths include its substantial scale as one of the largest BDCs, which provides advantages in deal sourcing, due diligence capabilities, and the ability to lead larger transactions. With $7 billion in assets under management and relationships with 48 banks in its credit facility, Prospect Capital can compete for deals that smaller BDCs cannot handle. The company has built strong institutional relationships over its 20-year operating history, including connections with private equity sponsors, investment banks, and other intermediaries that generate deal flow. Its diversified funding sources, including unsecured debt markets, preferred equity, and a large revolving credit facility, provide financing flexibility that some competitors lack. However, the BDC industry faces significant competitive pressures. The middle-market lending space has become increasingly crowded with direct lenders, private credit funds, and other BDCs competing for the same deals. This competition has compressed spreads and loosened lending standards across the industry. Potential disruption could come from several sources: larger private credit funds with permanent capital that can offer more flexible terms, traditional banks becoming more aggressive in middle-market lending as regulations evolve, or economic downturns that reveal weaknesses in underwriting standards. Additionally, the company's external management structure creates potential conflicts of interest and limits operational flexibility compared to internally managed competitors. The company's moat is not particularly strong, as the lending business is largely commoditized and success depends heavily on credit selection, market timing, and maintaining access to low-cost funding sources.
Risks & safety
Prospect Capital presents a moderate margin of safety with reasonable liquidity but elevated leverage concerns for a financial services company. • Liquidity Position: Strong near-term liquidity with $54.5 million in cash plus $1.7 billion in combined balance sheet cash and undrawn credit facility capacity. No immediate solvency risk. • Leverage Metrics: Net debt-to-total assets ratio of 28.7% is within regulatory limits but represents meaningful leverage. Total liabilities of $2.1 billion against total assets of $7.0 billion. • Credit Quality: Low non-accrual rate of 0.6% of total assets indicates good current portfolio performance, though this can deteriorate quickly in economic downturns. • Valuation Metrics: Trading at 0.37x price-to-book ratio, representing a significant discount to net asset value of $7.25 per share versus current price around $3.62. • Regulatory Constraints: As a BDC, subject to leverage limitations and distribution requirements that can limit financial flexibility during stress periods. • Interest Rate Sensitivity: Portfolio benefits from rising rates due to floating-rate loans, but funding costs also increase, creating some natural hedge.
Recent development
Over the past few years, Prospect Capital has executed a strategic portfolio transformation focused on reducing risk and improving asset quality. The company has systematically increased its allocation to first lien debt from 49.9% in 2022 to 65.5% currently, while simultaneously reducing exposure to higher-risk subordinated structured notes from 9.4% to 4.2%. The company has been actively managing its real estate portfolio through its private REIT strategy, having invested in 110 properties worth approximately $4 billion in aggregate initial value. Management has demonstrated disciplined capital allocation by exiting 49 properties with an average net realized internal rate of return of 24.4%, though the pace of exits has slowed due to current market conditions. Capital structure optimization has been a key focus, with the company maintaining a diversified funding base including unsecured debt, preferred securities, and bank facilities. The weighted average cost of unsecured debt has been managed at 4.33%, and the company has maintained 78% of its debt as unsecured, providing operational flexibility. Recent initiatives include launching preferred securities exchange offers to optimize the cost of capital and continuing to focus on lower middle-market lending opportunities that typically offer wider spreads than larger deals. Management has also emphasized maintaining conservative leverage ratios, currently operating significantly below regulatory maximums to preserve financial flexibility. The company has maintained its monthly distribution policy, recently announcing distributions of $0.45 per share for May through August 2025, continuing its track record of over $4.5 billion in lifetime distributions to shareholders.
PSEC company profile · for informational purposes only — not investment advice.
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