Earnings Miss: Hercules Capital, Inc. Missed EPS By 18% And Analysts Are Revising Their Forecasts

Hercules Capital, Inc. (NYSE:HTGC) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Hercules Capital missed earnings this time around, with US$125m revenue coming in 2.3% below what the analysts had modelled. Statutory earnings per share (EPS) of US$0.42 also fell short of expectations by 18%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Hercules Capital

Taking into account the latest results, the most recent consensus for Hercules Capital from eight analysts is for revenues of US$535.1m in 2025. If met, it would imply a meaningful 8.2% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be US$1.99, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$548.1m and earnings per share (EPS) of US$2.03 in 2025. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The consensus has reconfirmed its price target of US$20.64, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Hercules Capital's market value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Hercules Capital, with the most bullish analyst valuing it at US$25.00 and the most bearish at US$16.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Hercules Capital's revenue growth is expected to slow, with the forecast 6.5% annualised growth rate until the end of 2025 being well below the historical 14% p.a. growth over the last five years. Compare this to the 283 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 6.0% per year. So it's pretty clear that, while Hercules Capital's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Still, earnings are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Hercules Capital analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for Hercules Capital (of which 1 is significant!) you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.