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Prospect Capital Corp - $PSEC - Earnings Analysis: Decreased investment income indicates a need for portfolio optimization.

By sagebytes in Business —

Business Model

Prospect Capital Corporation generates revenue primarily through interest income from its investments in senior and subordinated debt, dividend income from equity investments, and other income such as structuring and amendment fees.

Revenue Sources

  • Interest income from control investments
  • Interest income from non-control/non-affiliate investments
  • Dividend income from control, affiliate, and non-control/non-affiliate investments
  • Other income, including structuring fees, amendment fees, and royalty interests

Income Statement Analysis

  • Total Investment Income decreased by 12.08% due to a decrease in non-control/non-affiliate investments and structured credit securities.
  • Total Operating Expenses decreased by 13.1%.
  • Net Investment Income decreased by 10.83% due to decrease in investment income and offset by decrease in expenses.

Balance Sheet Analysis

  • Total assets decreased by 7.92% from June 30, 2024 to December 31, 2024.
  • Total stockholders equity decreased by 7.32% from June 30, 2024 to December 31, 2024.
  • Total Liabilities decreased by 15.45% from June 30, 2024 to December 31, 2024.

Cash Flow Analysis

  • Net cash from operating activities increased significantly from $174,487 to $452,229.
  • Net cash used in financing activities also increased from $172,844 to $478,341.
  • Cash and cash equivalents at the end of the period decreased by $37,529.

Recommendation

Rating: Hold

Reason for Rating: Neutral recommendation based on mixed financial performance and lack of specific management commentary.

Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.

Generated on: 2/12/2025, 1:02:40 AM