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Hercules Capital Inc (HCXY)
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Upturn Advisory Summary
01/05/2026: HCXY (1-star) has a low Upturn Star Rating. Not recommended to BUY.
Upturn Star Rating
Not Recommended Performance
These Stocks/ETFs, based on Upturn Advisory, consistently fall short of market performance, signaling caution before investing.
Analysis of Past Performance
Type Stock | Historic Profit -2.4% | Avg. Invested days 59 | Today’s Advisory Consider higher Upturn Star rating |
Upturn Star Rating | Upturn Advisory Performance  3.0 | Stock Returns Performance  1.0 |
| Profits based on simulation | Last Close 01/05/2026 |
Key Highlights
Company Size Small-Cap Stock | Market Capitalization 1.32B USD | Price to earnings Ratio 19.41 | 1Y Target Price - |
Price to earnings Ratio 19.41 | 1Y Target Price - | ||
Volume (30-day avg) - | Beta - | 52 Weeks Range 23.20 - 25.29 | Updated Date 06/28/2025 |
52 Weeks Range 23.20 - 25.29 | Updated Date 06/28/2025 | ||
Dividends yield (FY) 4.96% | Basic EPS (TTM) - |
Earnings Date
Report Date - | When - | Estimate - | Actual - |
Profitability
Profit Margin - | Operating Margin (TTM) - |
Management Effectiveness
Return on Assets (TTM) - | Return on Equity (TTM) - |
Valuation
Trailing PE 19.41 | Forward PE - | Enterprise Value - | Price to Sales(TTM) - |
Enterprise Value - | Price to Sales(TTM) - | ||
Enterprise Value to Revenue - | Enterprise Value to EBITDA - | Shares Outstanding - | Shares Floating - |
Shares Outstanding - | Shares Floating - | ||
Percent Insiders - | Percent Institutions - |
Upturn AI SWOT
Hercules Capital Inc
Company Overview
History and Background
Hercules Capital, Inc. (NYSE: HTGC) was founded in 2003. It is a business development company (BDC) that provides "growth capital" to venture capital-backed companies and privately held middle-market companies. Its evolution has focused on becoming a leading provider of financing solutions to the technology and life sciences sectors, expanding its investment strategies and geographic reach over time.
Core Business Areas
- Venture Lending: Providing debt financing, including term loans, growth capital, and working capital loans, to venture capital-backed companies, primarily in the technology and life sciences sectors. This includes funding for research and development, expansion, and acquisitions.
- Growth Equity: Investing in established, privately held middle-market companies with proven business models and strong growth potential. This often involves providing capital for strategic initiatives, buyouts, or recapitalizations.
- Specialty Finance: Offering a range of tailored financing solutions to specific industries or situations, leveraging its expertise and capital base to meet unique client needs.
Leadership and Structure
Hercules Capital Inc. operates as a BDC, overseen by a Board of Directors and managed by its executive team. Key leadership positions include the Chief Executive Officer, Chief Financial Officer, and senior investment professionals responsible for deal sourcing, underwriting, and portfolio management. The company has a structured investment committee process for approving new investments and managing existing ones.
Top Products and Market Share
Key Offerings
- Venture Debt Facilities: Term loans, revolvers, and other debt instruments provided to venture-backed companies. Market share data for specific BDC products is not publicly disclosed in a standardized format. Competitors include other BDCs and traditional lenders willing to lend to venture-backed companies, such as Golub Capital, Ares Management, and BlackRock's private credit arm. Revenue from this segment is a significant portion of the company's total investment income.
- Growth Capital Loans: Customized debt solutions for established middle-market companies, often used for expansion, acquisitions, or recapitalizations. Similar to venture debt, specific market share is difficult to ascertain. Competitors include other BDCs, private debt funds, and commercial banks.
- Unitranche Facilities: A hybrid debt instrument combining senior and subordinated debt in a single facility, offering simplicity and flexibility for borrowers. This is a growing area with increasing competition from various private credit funds.
Market Dynamics
Industry Overview
Hercules Capital operates in the private credit and venture debt market, a segment of the broader financial services industry. This market is characterized by high growth, driven by the increasing demand for flexible and specialized financing solutions from technology and life sciences companies. The BDC structure provides a unique regulatory framework for such investments. The industry is influenced by interest rate environments, venture capital funding trends, and overall economic conditions.
Positioning
Hercules Capital is a leading BDC specializing in venture debt and growth capital for technology and life sciences companies. Its competitive advantages include a deep understanding of these sectors, a long track record of successful investments, strong relationships with venture capital firms, and the ability to offer tailored, flexible financing solutions. Its BDC structure also allows for certain tax advantages.
Total Addressable Market (TAM)
The TAM for venture debt and growth capital is substantial and growing, driven by innovation in technology and life sciences. While precise figures for the exact TAM are difficult to define, it encompasses billions of dollars in funding needs for early-stage to mature private companies. Hercules Capital is well-positioned to capture a significant portion of this market due to its specialized focus and established reputation.
Upturn SWOT Analysis
Strengths
- Strong focus on high-growth technology and life sciences sectors.
- Established relationships with venture capital firms and private equity sponsors.
- Experienced management team with deep industry knowledge.
- Diversified portfolio across various stages of company development.
- BDC structure provides tax advantages and a stable funding source.
Weaknesses
- Concentration risk within specific sectors.
- Sensitivity to economic downturns and technology market volatility.
- Potential for higher default rates in early-stage investments.
- Reliance on external funding sources (debt and equity).
Opportunities
- Growing demand for venture debt and growth capital in emerging technologies.
- Expansion into new geographic markets or industry sub-sectors.
- Increased deal flow from venture capital exits and IPOs.
- Opportunities to provide ancillary services or co-investments.
- Potential for rising interest rates to increase net interest margins.
Threats
- Increased competition from other BDCs, private debt funds, and traditional lenders.
- Downturns in the venture capital or broader equity markets.
- Changes in regulatory landscape affecting BDCs.
- Interest rate volatility impacting borrowing costs and loan valuations.
- Cybersecurity risks and data breaches.
Competitors and Market Share
Key Competitors
- Golub Capital (GCAP)
- Ares Management Corporation (ARES)
- BlackRock, Inc. (BLK)
- Owl Rock Capital Corporation (ORCC)
Competitive Landscape
Hercules Capital benefits from its specialized focus on venture debt and growth capital, particularly within the technology and life sciences sectors, which can be a niche for more generalist lenders. Its deep industry expertise and strong relationships with venture capital firms are significant advantages. However, it faces intense competition from larger, diversified asset managers with significant private credit platforms and other specialized BDCs.
Growth Trajectory and Initiatives
Historical Growth: Hercules Capital has experienced significant historical growth, expanding its asset under management, portfolio diversification, and geographic reach. This growth has been driven by a consistent strategy of providing capital to innovative companies and a prudent approach to risk management.
Future Projections: Analyst estimates generally project continued growth for Hercules Capital, driven by the ongoing demand for its specialized financing solutions and a favorable market environment for venture debt. Projections often focus on increases in net investment income and net asset value per share.
Recent Initiatives: Recent initiatives likely include expanding its investment team, exploring new financing structures, and potentially increasing its focus on specific high-growth sub-sectors within technology and life sciences. The company may also be exploring strategic partnerships or co-investment opportunities.
Summary
Hercules Capital Inc. is a strong player in the venture debt and growth capital market, benefiting from its specialized focus and deep industry relationships. Its consistent dividend payouts and historical growth trajectory are positive indicators. However, it faces significant competition and is susceptible to market downturns. Continued prudent risk management and strategic expansion will be crucial for its future success.
Similar Stocks
Sources and Disclaimers
Data Sources:
- Hercules Capital Inc. Investor Relations
- SEC Filings (10-K, 10-Q)
- Financial News and Analysis Websites
- Industry Research Reports
Disclaimers:
This JSON output is for informational purposes only and does not constitute financial advice. Investment decisions should be made after consulting with a qualified financial advisor and conducting thorough due diligence. Market share data is based on estimates and industry perception, as precise figures are not always publicly available.
AI Summarization is directionally correct and might not be accurate.
Summarized information shown could be a few years old and not current.
Fundamental Rating based on AI could be based on old data.
AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.
About Hercules Capital Inc
Exchange NYSE | Headquaters - | ||
IPO Launch date 2018-09-27 | CEO - | ||
Sector Financials | Industry Investment Banking & Investment Services | Full time employees 67 | Website |
Full time employees 67 | Website | ||
Hercules Capital, Inc., formerly known as Hercules Technology Growth Capital, Inc., is a business development company specializing in providing venture debt, debt, senior secured loans, and growth capital to privately held venture capital-backed companies at all stages of development from startups, to expansion stage including select publicly listed companies and select special opportunity lower middle market companies that require additional capital to fund acquisitions, recapitalizations and refinancing and established-stage companies. The firm provides growth capital financing solutions for capital extension; management buy-out and corporate spin-out financing solutions; company, asset specific, or intellectual property acquisition financing; convertible, subordinated and/or mezzanine loans; domestic and international corporate expansion; vendor financing; revenue acceleration by sales and marketing development, and manufacturing expansion. It provides asset-based financing with a focus on cash flow; accounts receivable facilities; equipment loans or leases; equipment acquisition; facilities build-out and/or expansion; working capital revolving lines of credit; inventory. The firm also provides bridge financing to IPO or mergers and acquisitions or technology acquisition; dividend recapitalizations and other sources of investor liquidity; cash flow financing to protect against share price volatility; competitor acquisition; pre-IPO financing for extra cash on the balance sheet; public company financing to continue asset growth and production capacity; short-term bridge financing; and strategic and intellectual property acquisition financings. It also focuses on customized financing solutions, seed, startups, early stage, emerging growth, mid venture, and late venture financing. The firm invests primarily in structured debt with warrants and, to a lesser extent, in senior debt and equity investments. The firm generally seeks to invest in companies that have been operating for at least six to 12 months prior to
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