Prospect Capital Earnings Preview

Motley Fool Staff
Updated

Prospect Capital (NAS: PSEC) will try to beat its earnings estimates for the third consecutive quarter. The company will unveil its latest earnings Monday. Prospect Capital is a financial services company that primarily lends to and invests in middle market privately-held companies. It is a closed-end investment company.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Prospect Capital with six of seven analysts rating it hold. Analysts don't like Prospect Capital as much as competitor Main Street Capital Holdings overall. Three out of five analysts rate Main Street Capital Holdings a buy compared with one of seven for Prospect Capital. That rating hasn't budged in three months as analysts have remained unchanged in their opinion of the stock.

  • Revenue Forecasts: On average, analysts predict $59.3 million in revenue this quarter. That would represent a rise of 102.9% from the year-ago quarter.

  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.37 per share. Estimates range from $0.34 to $0.38.

What our community says:
CAPS All-Stars are solidly behind the stock with 97.4% giving it an "outperform" rating. The community at large backs the All-Stars with 97% awarding it a rating of "outperform." Fools are keen on Prospect Capital and haven't been shy with their opinions lately, logging 234 posts in the past 30 days. Even with a robust four out of five stars, Prospect Capital's CAPS rating falls a little short of the community's upbeat outlook.

Management:
Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows net margins over the past four quarters.

Quarter

Q3

Q2

Q1

Q4

Net Margin

62.1%

69.2%

64.3%

55.5%

One final thing: If you want to keep tabs on Prospect Capital movements, and for more analysis on the company, make sure you add it to your watchlist.

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At the time thisarticle was published

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