Prospect Capital Corporation's Financial Overview

• Earnings Per Share (EPS) of $0.19 exceeded estimates, indicating strong profitability.
• The company's Price-to-Earnings (P/E) ratio of 39.68 reflects investor confidence in its financial health.
• Low debt-to-equity ratio of 0.031 suggests a conservative approach to debt, favorable for long-term stability.

Prospect Capital Corporation, listed on NASDAQ as PSEC, is a business development company that provides capital to middle-market companies. Since its IPO in July 2004, PSEC has invested over $21 billion in more than 450 investments, exiting over 325 successfully. The company is known for its significant distributions to shareholders, totaling $4.5 billion to date.

On May 8, 2025, PSEC reported earnings per share of $0.19, exceeding the estimated $0.14. This indicates strong profitability, despite revenue of $170.7 million falling short of the $174.3 million estimate. The company's price-to-earnings (P/E) ratio of 39.68 shows that investors are willing to pay a premium for its earnings, reflecting confidence in its financial health.

PSEC's price-to-sales ratio of 4.34 and enterprise value to sales ratio of 4.60 highlight the market's valuation of its revenue. These metrics suggest that investors see value in PSEC's sales performance, even as the company plans to declare distributions for September and October 2025, as highlighted by its recent financial results.

The enterprise value to operating cash flow ratio of 2.90 indicates PSEC's efficiency in generating cash from operations. With an earnings yield of 2.52%, the company offers a modest return on investment. Its low debt-to-equity ratio of 0.031 suggests a conservative approach to debt, which is favorable for long-term stability.

However, PSEC's current ratio of 0.38 raises potential liquidity concerns, as it suggests challenges in covering short-term liabilities with short-term assets. Despite this, the company's history of substantial distributions, amounting to $21.57 per share since inception, underscores its commitment to rewarding shareholders.