Prospect Capital (NASDAQ:PSEC) Trading 8.6% Higher on Earnings Beat

Prospect Capital Corporation (NASDAQ:PSEC) traded up 8.6% during trading on Tuesday after the company announced better than expected quarterly earnings. The stock traded as high as $2.84 and last traded at $2.8350. 2,991,955 shares changed hands during trading, a decline of 27% from the average session volume of 4,121,565 shares. The stock had previously closed at $2.61.

The financial services provider reported $0.19 EPS for the quarter, beating analysts’ consensus estimates of $0.10 by $0.09. The company had revenue of $176.00 million for the quarter, compared to analyst estimates of $156.34 million. Prospect Capital had a negative net margin of 39.56% and a positive return on equity of 11.79%.

Prospect Capital Dividend Announcement

The firm also recently disclosed a monthly dividend, which will be paid on Tuesday, May 19th. Stockholders of record on Tuesday, April 28th will be paid a $0.045 dividend. The ex-dividend date is Tuesday, April 28th. This represents a c) dividend on an annualized basis and a dividend yield of 18.8%. Prospect Capital’s payout ratio is presently -62.79%.

Key Prospect Capital News

Here are the key news stories impacting Prospect Capital this week:

• Positive Sentiment: Q2 results beat expectations — Prospect reported EPS of $0.19 versus consensus $0.10 and revenue of $176M, both above forecasts; management highlighted improvement in total investment income for the quarter. This supports near‑term sentiment and reduces earnings downside risk. Prospect Capital Announces Financial Results for December 2025
• Positive Sentiment: Portfolio shift toward higher‑quality first‑lien exposure — Management outlined a continued exit from subordinated notes and is targeting a ~71.4% first‑lien mix, which should improve credit quality and recoverability over time and may support NAV/stability. Prospect Capital outlines continued exit from subordinated notes and targets 71.4% first lien mix amid portfolio shift
• Positive Sentiment: Generous monthly dividend declared — Prospect announced monthly dividends of $0.045 per share (annualized yield ~19.6%). For income investors this is attractively high and likely draws buying interest; watch ex‑dividend dates noted in company filings. Prospect Capital Reports Quarterly Results, Declares 2026 Distributions
• Neutral Sentiment: Earnings call / transcript — Management’s Q2 call provides detail on portfolio repositioning, realized vs. unrealized gains, and liquidity; useful for assessing execution risk but contains no new guidance raising or lowering expectations materially. Prospect Capital Corporation (PSEC) Q2 2026 Earnings Call Transcript
• Neutral Sentiment: Affiliated fund performance noted — Prospect Enhanced Yield Fund reported strong short-term returns and a high cash dividend yield on NAV; positive signal for the group’s debt investing capability but only indirectly affects PSEC’s core balance sheet. Prospect Enhanced Yield Fund performance release
• Negative Sentiment: Profitability and margin caveats — Despite the EPS beat, Prospect still reports a negative net margin and a negative P/E (loss‑based measure), and portfolio sales/exits can produce realized losses or volatility in NAV. These factors keep fundamental risk elevated for dividend sustainability and valuation. Prospect Capital earnings snapshot

Wall Street Analyst Weigh In

A number of analysts have issued reports on PSEC shares. Wall Street Zen raised Prospect Capital from a “hold” rating to a “buy” rating in a report on Saturday, December 6th. Weiss Ratings reaffirmed a “sell (d)” rating on shares of Prospect Capital in a research report on Thursday, January 22nd. Two analysts have rated the stock with a Sell rating, Based on data from MarketBeat, the company presently has an average rating of “Sell” and a consensus price target of $2.50.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently bought and sold shares of PSEC. Catalyst Financial Partners LLC bought a new stake in Prospect Capital in the 4th quarter valued at $26,000. Bfsg LLC bought a new position in shares of Prospect Capital during the 4th quarter worth about $27,000. Navalign LLC acquired a new stake in shares of Prospect Capital during the 3rd quarter valued at about $28,000. Ground Swell Capital LLC bought a new stake in Prospect Capital in the fourth quarter valued at about $28,000. Finally, Evergreen Capital Management LLC acquired a new position in Prospect Capital in the fourth quarter worth about $30,000. 9.06% of the stock is owned by institutional investors.

Prospect Capital Price Performance

The company has a quick ratio of 1.22, a current ratio of 1.22 and a debt-to-equity ratio of 0.64. The company’s 50-day moving average is $2.69 and its 200-day moving average is $2.75. The stock has a market cap of $1.36 billion, a price-to-earnings ratio of -3.56 and a beta of 0.89.

Prospect Capital Company Profile

Prospect Capital Corporation is a publicly traded business development company listed on the Nasdaq stock exchange that specializes in providing private debt and equity financing solutions to middle-market companies across the United States. Structured as a closed-end, non-diversified management investment company under the Investment Company Act of 1940, Prospect Capital offers investors access to a diversified portfolio of senior secured loans, subordinated debt and selective equity interests in privately held businesses.

Since its founding in 2004, Prospect Capital has focused on tailoring financing structures to meet the growth, acquisition and recapitalization needs of its portfolio companies.