Clear Street initiates Runway Growth Finance stock with Hold rating

Investing.com - Clear Street initiated coverage on Runway Growth Finance Corp. (NASDAQ:RWAY) with a Hold rating and a price target of $11.00 on Thursday. According to InvestingPro data, the stock currently trades at $10.72, with a market capitalization of $394.4 million.

The research firm highlighted RWAY’s role in providing venture debt financing to late-stage and growth companies, offering investors high yield and exposure to innovation-driven sectors.

Clear Street noted that RWAY’s portfolio totals over $1 billion, with 90% in first lien loans and a yield of approximately 14%. The 2024 acquisition of Runway’s adviser by BC Partners enhances origination capacity and diversification potential.

The firm pointed to RWAY’s modest leverage, ample liquidity, and share repurchases supporting NAV as positive positioning factors. However, Clear Street expressed concern about potential credit risk, citing high PIK income and over 25% of loans performing below plan despite low non-accruals.

Clear Street also mentioned that legacy shareholder overhang may constrain near-term upside for the stock, concluding that shares are fairly valued considering these constraints.

In other recent news, Runway Growth Finance Corp reported its second-quarter 2025 earnings, revealing mixed results. The company recorded an earnings per share (EPS) of $0.38, which was slightly below the anticipated $0.3872, resulting in a -1.86% surprise. However, the revenue figures were more promising, with Runway Growth Finance achieving $35.15 million, exceeding the forecasted $34.27 million and marking a 2.57% positive surprise. These earnings and revenue results highlight the company’s recent financial performance. Additionally, the company’s stock experienced a modest after-hours increase. While the EPS did not meet expectations, the revenue surpassing predictions could be a point of interest for investors. These developments reflect the company’s current financial standing and recent activities.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.