NYSE:HTGC

Stock Analysis Report

Executive Summary

Hercules Capital, Inc. is a business development company.

Rewards


Snowflake Analysis


Similar Companies

Share Price & News

How has Hercules Capital's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: HTGC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.1%

HTGC

-8.0%

US Capital Markets

-7.4%

US Market


1 Year Return

7.5%

HTGC

8.3%

US Capital Markets

10.5%

US Market

Return vs Industry: HTGC matched the US Capital Markets industry which returned 8.3% over the past year.

Return vs Market: HTGC underperformed the US Market which returned 10.5% over the past year.


Shareholder returns

HTGCIndustryMarket
7 Day-1.1%-8.0%-7.4%
30 Day4.7%-4.0%-3.6%
90 Day5.2%-2.1%-0.6%
1 Year18.5%7.5%10.4%8.3%12.8%10.5%
3 Year34.0%0.3%27.5%20.4%37.4%28.6%
5 Year69.4%4.0%70.2%54.4%61.3%43.6%

Price Volatility Vs. Market

How volatile is Hercules Capital's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Hercules Capital undervalued compared to its fair value and its price relative to the market?

19.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HTGC ($15.04) is trading below our estimate of fair value ($18.79)

Significantly Below Fair Value: HTGC is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: HTGC is good value based on its PE Ratio (8.8x) compared to the Capital Markets industry average (32.3x).

PE vs Market: HTGC is good value based on its PE Ratio (8.8x) compared to the US market (17.2x).


Price to Earnings Growth Ratio

PEG Ratio: HTGC's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: HTGC is good value based on its PB Ratio (1.4x) compared to the US Capital Markets industry average (6.6x).

Future Growth

How is Hercules Capital forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

-1.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HTGC's earnings are forecast to decline over the next 3 years (-1% per year).

Earnings vs Market: HTGC's earnings are forecast to decline over the next 3 years (-1% per year).

High Growth Earnings: HTGC's earnings are forecast to decline over the next 3 years.

Revenue vs Market: HTGC's revenue (7.7% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: HTGC's revenue (7.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HTGC's Return on Equity is forecast to be low in 3 years time (13.8%).

Past Performance

How has Hercules Capital performed over the past 5 years?

22.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HTGC has a large one-off gain of $30.3M impacting its December 31 2019 financial results.

Growing Profit Margin: HTGC's current net profit margins (64.7%) are higher than last year (36.5%).


Past Earnings Growth Analysis

Earnings Trend: HTGC's earnings have grown significantly by 22.7% per year over the past 5 years.

Accelerating Growth: HTGC's earnings growth over the past year (128.2%) exceeds its 5-year average (22.7% per year).

Earnings vs Industry: HTGC earnings growth over the past year (128.2%) exceeded the Capital Markets industry 8.4%.


Return on Equity

High ROE: HTGC's Return on Equity (15.3%) is considered low.


Return on Assets


Return on Capital Employed

Financial Health

How is Hercules Capital's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: HTGC has a low level of unsold assets or inventory.

Debt Coverage by Assets: HTGC's debt is not covered by short term assets (assets are 0.1x debt).


Financial Institutions Analysis

Asset Level: HTGC's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if HTGC has a sufficient allowance for bad loans.

Low Risk Liabilities: HTGC reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if HTGC has an acceptable proportion of non-loan assets held.

Low Risk Deposits: HTGC has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if HTGC has an appropriate level of bad loans.

Dividend

What is Hercules Capital's current dividend yield, its reliability and sustainability?

9.44%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Hercules Capital before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company9.4%marketbottom25%1.5%markettop25%3.9%industryaverage2.1%forecastin3Years8.8%

Current dividend yield vs market & industry

Notable Dividend: HTGC's dividend (9.44%) is higher than the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: HTGC's dividend (9.44%) is in the top 25% of dividend payers in the US market (3.9%)


Stability and Growth of Payments

Stable Dividend: HTGC's dividend payments have been volatile in the past 10 years.

Growing Dividend: HTGC's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (74.7%), HTGC's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HTGC's dividends in 3 years are forecast to be covered by earnings (89.7% payout ratio).

Management

How experienced are the management team and are they aligned to shareholders interests?

1.0yrs

Average management tenure


CEO

Scott Bluestein (41yo)

0.9yrs

Tenure

US$11,057,933

Compensation

Mr. Scott Bluestein serves as Chief Executive Officer, President and Director at Hercules Capital, Inc. since July 18, 2019. Mr. Bluestein served as an Interim Chief Executive Officer at Hercules Capital,  ...


CEO Compensation Analysis

Compensation vs Market: Scott's total compensation ($USD11.06M) is above average for companies of similar size in the US market ($USD3.92M).

Compensation vs Earnings: Scott's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Scott Bluestein
CEO, Chief Investment Officer0.9yrsUS$11.06m0.60% $10.4m
Melanie Grace
Chief Compliance Officer4.4yrsUS$901.12k0.031% $531.0k
Roy Liu
Managing Director15.8yrsno datano data
Seth Meyer
CFO & Chief Accounting Officer0.9yrsno data0.11% $1.8m
Steve Kuo
Senior MD & Group Head of Technology1.1yrsno datano data
Michael Hara
Managing Director of Investor Relations & Corporate Communications0yrsno datano data
Catherine Jhung
Managing Director of Business Development0yrsno datano data
Stephanie Lau-Chen
Vice President of Human Resources0.08yrsno datano data
R. Jadot
Senior MD & Group Head of Life Sciences0.8yrsno datano data
Michael Bowden
Managing Director of Portfolio Management1.1yrsno datano data

1.0yrs

Average Tenure

50yo

Average Age

Experienced Management: HTGC's management team is not considered experienced ( 1 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Scott Bluestein
CEO, Chief Investment Officer0.9yrsUS$11.06m0.60% $10.4m
Gayle Crowell
Independent Director1yrsno data0.0077% $132.8k
Robert Badavas
Chairman of the Board & Lead Independent Director0.9yrsUS$235.00k0.12% $2.0m
Carol Foster
Independent Director1.1yrsno data0.0056% $97.1k
Thomas Fallon
Independent Director5.6yrsUS$211.03k0.041% $703.8k
Jorge Titinger
Independent Director2.2yrsUS$217.76k0.0074% $127.7k
Doreen Ho
Independent Director3.3yrsUS$162.80k0.015% $266.4k
Joseph Hoffman
Independent Director4.8yrsUS$175.63k0.030% $511.8k
Bradford Koenig
Independent Director2.3yrsUS$220.23k0.013% $230.0k

2.2yrs

Average Tenure

60yo

Average Age

Experienced Board: HTGC's board of directors are not considered experienced ( 2.2 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 11.2%.


Top Shareholders

Company Information

Hercules Capital, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Hercules Capital, Inc.
  • Ticker: HTGC
  • Exchange: NYSE
  • Founded: 2003
  • Industry: Asset Management and Custody Banks
  • Sector: Diversified Financials
  • Market Cap: US$1.725b
  • Shares outstanding: 110.37m
  • Website: https://www.htgc.com

Number of Employees


Location

  • Hercules Capital, Inc.
  • 400 Hamilton Avenue
  • Suite 310
  • Palo Alto
  • California
  • 94301
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HTGCNYSE (New York Stock Exchange)YesCommon StockUSUSDJun 2005
19HDB (Deutsche Boerse AG)YesCommon StockDEEURJun 2005
0J4MLSE (London Stock Exchange)YesCommon StockGBUSDJun 2005

Biography

Hercules Capital, Inc. is a business development company. The firm 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 the date of their investment. It prefers to invest in technology, energy technology, sustainable and renewable technology, and life sciences. Within technology the firm focuses on advanced specialty materials and chemicals; communication and networking, consumer and business products; consumer products and services, digital media and consumer internet; electronics and computer hardware; enterprise software and services; gaming; healthcare services; information services; business services; media, content and information; mobile; resource management; security software; semiconductors; semiconductors and hardware; and software sector. Within energy technology, it invests in agriculture; clean technology; energy and renewable technology, fuels and power technology; geothermal; smart grid and energy efficiency and monitoring technologies; solar; and wind. Within life sciences, the firm invests in biopharmaceuticals; biotechnology tools; diagnostics; drug discovery, development and delivery; medical devices and equipment; surgical devices; therapeutics; pharma services; and specialty pharmaceuticals. It also invests in educational services. The firm invests primarily in United States based companies and considers investment in the West Coast, Mid-Atlantic regions, Southeast and Midwest; particularly in the areas of software, biotech and information services. It invests generally between $1 million to $40 million in companies focused primarily on business services, communications, electronics, hardware, and healthcare services. The firm invests primarily in private companies but also have investments in public companies. For equity investments, the firm seeks to represent a controlling interest in its portfolio companies which may exceed 25% of the voting securities of such companies. The firm seeks to invest a limited portion of its assets in equipment-based loans to early-stage prospective portfolio companies. These loans are generally for amounts up to $3 million but may be up to $15 million for certain energy technology venture investments. The firm allows certain debt investments have the right to convert a portion of the debt investment into equity. It also co-invests with other private equity firms. The firm seeks to exit its investments through initial public offering, a private sale of equity interest to a third party, a merger or an acquisition of the company or a purchase of the equity position by the company or one of its stockholders. The firm has structured debt with warrants which typically have maturities of between two and seven years with an average of three years; senior debt with an investment horizon of less than three years; equipment loans with an investment horizon ranging from three to four years; and equity related securities with an investment horizon ranging from three to seven years. The firm prefers to invest through its balance sheet capital. The firm formerly known as Hercules Technology Growth Capital, Inc. Hercules Capital, Inc. was founded in December 2003 and is based in Palo Alto, California with additional offices in Hartford, Connecticut; Boston, Massachusetts; Elmhurst, Illinois; Santa Monica, California; McLean, Virginia; New York, New York; Radnor, Pennsylvania; and Washington, District of Columbia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/26 00:42
End of Day Share Price2020/02/25 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.