Two 59%+ winners, four above 25% in Aug – How this AI model keeps picking winners
On Friday, Keefe, Bruyette & Woods analyst Paul Johnson adjusted the price target for Horizon Technology Finance (NASDAQ:HRZN) to $8.00 from the previous figure of $9.00, while the firm maintained its Underperform rating on the company’s stock.
Johnson’s analysis pointed to persistent venture capital fundraising headwinds affecting the business. He noted that credit issues have had a significant impact on the company’s net asset value (NAV) and net investment income (NII), with the NAV having decreased by 27% since 2022. Although non-accruals have declined, Johnson attributed this primarily to restructuring efforts, which also involved significant writedowns for several non-accruals. According to InvestingPro analysis, the company maintains strong liquidity with a current ratio of 5.08, though it reported negative earnings per share of -$0.16 in the last twelve months.
The analyst highlighted that Horizon Technology Finance’s earnings fell short of expectations even though the company did not earn an incentive fee. Despite the commitment to waive incentive fees to maintain its dividend payout of $0.33 per quarter, Johnson expressed skepticism about the company’s ability to fully cover its dividend following these waivers in 2026.
The revised estimates by Keefe, Bruyette & Woods reflect ongoing concerns regarding NAV degradation and an anticipated slight increase in the cost of debt for Horizon Technology Finance. This reassessment led to the reduced target price of $8.00. Johnson’s commentary underscores the challenges faced by the company amid a tough environment for venture capital fundraising and the broader implications for its financial performance.
In other recent news, Horizon Technology Finance Corporation reported fourth-quarter earnings that did not meet analyst expectations. The company posted net investment income of $0.27 per share, falling short of the consensus estimate of $0.32 per share. Revenue for the quarter was $23.55 million, which was below the anticipated $23.8 million. For the full year 2024, Horizon reported net investment income of $1.32 per share, aligning with its regular monthly distributions paid during the year. The total investment portfolio reached $697.9 million as of December 31, 2024, with the company funding seven loans totaling $59.1 million during the fourth quarter. Despite the growth in its portfolio, Horizon’s net asset value per share declined to $8.43 due to stressed investments in the fourth quarter. The company declared monthly distributions of $0.11 per share for April, May, and June 2025. Horizon concluded the year with $100.9 million in cash and $244 million in available credit facility capacity.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.