Abstract
Hercules Capital will release its quarterly earnings on February 12, 2026 Post Market, with consensus pointing to modest top-line growth and stable profitability metrics as investors weigh fee income resilience and credit quality.
Market Forecast
The market’s current expectations suggest Hercules Capital’s quarterly revenue will be USD 138.89 million, with adjusted EPS projected at USD 0.49, alongside year-over-year revenue growth of 9.30% and an adjusted EPS decline of 2.77%; margin forecasts are not formally provided. The main business is expected to continue being driven by interest income with steady fee contributions, while outlook highlights a balanced pipeline of originations and repayments supporting net investment income stability. The most promising segment is interest income, anticipated to lead growth with revenue near USD 138.89 million and an estimated year-over-year increase of 9.30%.
Last Quarter Review
Hercules Capital reported revenue of USD 138.09 million, a gross profit margin of 100.00%, GAAP net profit attributable to the parent company of USD 120.00 million, a net profit margin of 86.67%, and adjusted EPS of USD 0.49, with year-over-year revenue growth of 10.26% and EPS growth of -3.92%. A key highlight was strong quarter-on-quarter net profit growth of 51.72%, reflecting improved investment income dynamics and disciplined expense control. Main business highlights showed interest income of USD 131.16 million and fee income of USD 6.94 million, with interest income accounting for approximately 94.98% of total revenue.
Current Quarter Outlook
Main Business: Interest Income and Net Investment Income Durability
Interest income remains the core driver of Hercules Capital’s performance, and the forecast points toward a continued revenue base near USD 138.89 million, with a year-over-year increase of 9.30%. This momentum is typically supported by sustained portfolio yields and a disciplined approach to leverage in business development company structures, which can maintain net investment income even as prepayment activity fluctuates. With a gross margin profile at 100.00%, the company converts nearly all revenue into gross profit, making operating discipline and credit performance the key variables for net margin. Investors will monitor how management balances new originations with repayments, as stable deployment rates can underpin the continuity of net investment income.
Most Promising Business: Interest Income Led Portfolio Yield and Scale
Interest income, at USD 131.16 million last quarter and projected to approximate USD 138.89 million this quarter, remains the largest contributor and the area with the clearest potential for incremental growth. The estimated 9.30% year-over-year revenue increase implies that overall portfolio earnings power is expanding, whether through modest asset growth, sustained portfolio yields, or fee accruals linked to originations. This segment’s promise depends on maintaining healthy spreads and disciplined underwriting, which directly impact net interest margins and risk-adjusted returns. Investors will watch for signals on pipeline strength and funding capacity to validate the revenue projection trajectory.
Stock Price Drivers: Earnings Mix, Credit Quality, and Fee Resilience
Stock performance this quarter is likely to hinge on the interaction between net investment income delivery and asset quality. With net profit margin at 86.67% last quarter, any changes in realized and unrealized gains, credit costs, or non-recurring items can sway GAAP earnings and headline EPS. Fee income contributed USD 6.94 million last quarter and acts as a secondary stabilizer; visibility into origination fees and prepayment fees could influence near-term investor sentiment. Management’s commentary on repayments, non-accruals, and deployment pace will be pivotal in shaping expectations for the next few quarters, particularly given the modest forecast EPS decline of 2.77% year-over-year.
Analyst Opinions
The majority of recent institutional views appear positive. A notable analyst maintained a Buy rating with a USD 24.00 price target, indicating confidence in Hercules Capital’s earnings power and balance sheet profile. The reinforcement of an investment grade BBB+ rating by a recognized rating agency underscores a stable outlook and risk management discipline, which supports the positive stance among institutions. In aggregate, bullish opinions outnumber cautious ones, driven by expectations for steady revenue, resilient net investment income, and disciplined credit stewardship across the investment portfolio.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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