| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 48 | 12.3x | 17.6x | Around median | |
Growth | 75 | 12.1% | 7.1% | Top tier | |
Quality | 89 | — | — | Top tier | |
Safety | 62 | — | — | Around median | |
Capital Return | 31 | 7.22% | 2.15% | Bottom tier | |
Momentum | 56 | -0.9% | 2.3% | Around median | |
Sentiment | 2 | 1 | 3 | Bottom tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Hercules Capital operates in private lending to venture-backed and growth-stage companies, with a focus on the life sciences and technology sectors. The company generates its income primarily from interest on its debt portfolio and prepayment fees, in addition to the contribution from the private credit funds business managed by Hercules Adviser; assets under management across the platform reached approximately $6.1 billion in fiscal Q1 2026, up 21.8% from the comparable period. The asset portfolio was divided nearly equally between life sciences and technology, with no subsector accounting for more than 25%, while debt investments were spread across 139 companies.
EDGAR data for fiscal Q2 2026 showed revenue of $138.0 million, net income of $130.2 million, and earnings per share of $0.67, compared with revenue of $136.4 million, net income of $42.5 million, and earnings per share of $0.23 in fiscal Q1 2026. Fiscal Q2 net income was equivalent to approximately 94.3% of revenue, noting that the provided data does not present a separate figure for gross profit or its margin. In fiscal 2025, the company recorded revenue of $507.9 million, net income of $339.7 million, and earnings per share of $1.85.
The May 5, 2026 call indicated that total investment income in fiscal Q1 2026 reached a record $141.5 million and that net investment income was $88.1 million, or $0.48 per share. Net investment income covered the base distribution by 120% and the full distribution, including the supplemental distribution of $0.07, by 102%. The effective portfolio yield was 12.8% and the core yield was 12.2%, while Hercules Adviser contributed approximately $6.7 million to net investment income through distributions of $2.1 million and expense reimbursements of $4.6 million.
Automated analysis for informational purposes only — not investment advice.
The Hercules valuation target based on the 52-week range lies between $24.36 and $25.71, a relatively narrow range with a spread of approximately 5.5% between its endpoints. Compared with net asset value of $11.90 per share in fiscal Q1 2026, this range represents approximately 2.0 to 2.2 times net asset value, a premium that requires continued strong return on equity and distribution coverage. This is counterbalanced by the risk of a 1.9% decline in net asset value and an increase in leverage to 115.4% during the same quarter.
Figures in the text are as of 2026-08-31; the live price is shown at the top of the page.
Hercules generates its income primarily from interest on loans provided to growth-stage life sciences and technology companies, in addition to prepayment fees and PIK income. Hercules Adviser also manages institutional private credit funds and contributed approximately $6.7 million to the BDC's net investment income during fiscal Q1 2026. Total investment income in that quarter reached a record $141.5 million, while core income after excluding the impact of prepayments was $134.9 million.
EDGAR data showed revenue of $138.0 million, net income of $130.2 million, and earnings per share of $0.67 in fiscal Q2 2026. These results compare with revenue of $136.4 million, net income of $42.5 million, and earnings per share of $0.23 in fiscal Q1 2026. The provided data does not include details on the reasons for the jump in fiscal Q2 net income, so it cannot be attributed to a specific operating item.
The average internal credit rating was 2.11 in fiscal Q1 2026, compared with 2.20 in the previous quarter, and loans rated 1 and 2 increased to 70.5% from 66.6%. Loans rated 4 and 5 declined to 0.9% of the portfolio, the lowest level since fiscal Q2 2022. Non-accrual status was limited to one loan with a cost of $10.7 million and a fair value of $3.7 million.
Management stated on the May 5, 2026 call that artificial intelligence could change business models and profit margins and create winners and losers across multiple sectors. Conversely, it reported that several portfolio companies use artificial intelligence to improve efficiency, accelerate innovation, and speed their access to market. Hercules responded by updating its modeling assumptions and underwriting criteria and placing greater priority on loan duration, collateral, and covenants instead of pursuing a limited increase in yield.
Net investment income covered the base distribution by 120% in fiscal Q1 2026 and covered the full distribution, including the supplemental distribution of $0.07, by 102%. This was the twenty-third consecutive quarter in which the company provided a supplemental distribution alongside the quarterly base distribution. It also ended the period with accumulated undistributed earnings of $149.1 million, equivalent to $0.80 per outstanding share at the end of the quarter.
Management projected on the May 5, 2026 call that prepayments would range from $350 million to $500 million in fiscal Q2 2026, up from $225.8 million in fiscal Q1. Most of the increase is linked to known acquisition transactions and could lead to higher prepayment fees and the cash collection of PIK balances. Conversely, the sustained impact on income depends on the speed at which the funds are redeployed, particularly given expectations that new loan originations would moderate and be concentrated in the latter part of the quarter.
