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Horizon Technology Finance (HRZN)
:HRZN
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Horizon Technology
(NASDAQ:HRZN)
46Neutral
Positive Factors
Dividend Yield and Stock Appreciation
The analyst reiterates a Buy rating, expecting a dividend yield of 14.2% and stock price appreciation, leading to a substantial total return.
Portfolio Growth
HRZN's investment portfolio grew for the second consecutive quarter after three quarters of decline or no growth.
Negative Factors
Financial Performance
A GAAP net loss and a dividend drove net asset value down 7.0%.
Horizon Technology (HRZN) vs. S&P 500 (SPY)
Market Cap
N/A
Dividend Yield14.22%
Average Volume (3M)372.99K
Price to Earnings (P/E)―
Beta (1Y)0.69
Revenue Growth-22.07%
EPS Growth75.49%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength77
IndustryAsset Management Services
Share Statistics
EPS (TTM)-0.12
Shares Outstanding40,315,006
10 Day Avg. Volume502,786
30 Day Avg. Volume372,994
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)12.16
Price to Cash Flow (P/CF)-3.60
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$9.75Price Target Upside6.21% Upside
Rating ConsensusHold
Number of Analyst Covering3
Horizon Technology Business Overview & Revenue Model
Company DescriptionHorizon Technology Finance Corp. is a finance company, which engages in the provision of capital in the form of secured loans to venture capital backed companies. It also involves in lending and investing in portfolio companies in technology, life science, healthcare information and services, and cleantech industries. The company was founded on March 16, 2010 and is headquartered in Farmington, CT.
How the Company Makes MoneyHorizon Technology makes money through a diversified revenue model that includes subscription-based services, software licensing fees, and sales of proprietary technology products. Key revenue streams include cloud service subscriptions, AI-powered software solutions, and cybersecurity tools. The company also generates income through strategic partnerships with other technology firms, providing integrated solutions that enhance customer offerings. Additionally, Horizon Technology benefits from long-term contracts with enterprise clients, ensuring a steady flow of recurring revenue.
Horizon Technology Financial Statement Overview
Summary
Horizon Technology's financial performance shows significant volatility. Despite a strong recovery in revenue in 2024 and a solid balance sheet with no debt, historical inconsistencies and operational inefficiencies are concerning. The stable gross profit margin and recent improvements in free cash flow are positives.Income Statement
Horizon Technology's revenue growth has been inconsistent, with significant fluctuations over the years. The company experienced a significant revenue decline in 2023, followed by a strong recovery in 2024. Gross profit margin was stable for 2024, but net profit margin was highly volatile, reflecting operational challenges. EBIT margin was relatively high, indicating efficient management of operating expenses.45
Neutral
Balance Sheet
The balance sheet shows improving equity with a strong equity ratio and no debt as of 2024, signaling financial stability. However, the company's high leverage in previous years may pose a risk if similar conditions arise in the future. The return on equity has been fluctuating, reflecting the variability in net income.62
Positive
Cash Flow
The cash flow statements show volatile free cash flow, with significant growth in 2024. The operating cash flow to net income ratio was low, indicating potential inefficiencies in converting net income into cash. However, the company managed to improve its free cash flow position significantly in the latest period.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 99.92M | -9.87M | 26.64M | 33.27M | 10.33M |
| Gross Profit | ||||
| 99.92M | -9.87M | 6.66M | 17.31M | -2.33M |
| EBIT | ||||
| 94.07M | -1.34M | 41.07M | 28.18M | 6.59M |
| EBITDA | ||||
| 0.00 | 11.94M | 0.00 | 0.00 | 0.00 |
| Net Income Common Stockholders | ||||
| -5.63M | -17.18M | 21.15M | 27.78M | 6.36M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 70.26M | 46.63M | 20.61M | 38.05M | 19.50M |
| Total Assets | ||||
| 821.83M | 802.36M | 766.83M | 513.96M | 407.16M |
| Total Debt | ||||
| 0.00 | 462.24M | 434.08M | 257.61M | 185.82M |
| Net Debt | ||||
| -70.26M | 389.15M | 413.47M | 219.56M | 166.32M |
| Total Liabilities | ||||
| 485.65M | 478.38M | 448.38M | 268.63M | 194.56M |
| Stockholders Equity | ||||
| 336.18M | 323.98M | 318.45M | 245.34M | 212.60M |
| Cash Flow | Free Cash Flow | |||
| 3.94M | 50.07M | -246.28M | -75.99M | -25.28M |
| Operating Cash Flow | ||||
| 3.94M | 50.07M | -246.28M | -75.99M | -25.28M |
| Investing Cash Flow | ||||
| 0.00 | 0.00 | -372.01M | -291.49M | -190.23M |
| Financing Cash Flow | ||||
| 21.21M | 50.51M | 229.46M | 75.52M | 55.66M |
Horizon Technology Technical Analysis
Negative
9.18
Price Trends
9.29
Negative
9.18
Negative
9.89
Negative
Market Momentum
-0.04
Positive
44.95
Neutral
48.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HRZN, the sentiment is Negative. The current price of 9.18 is below the 20-day moving average (MA) of 9.53, below the 50-day MA of 9.29, and below the 200-day MA of 9.89, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 44.95 is Neutral, neither overbought nor oversold. The STOCH value of 48.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HRZN.
Horizon Technology Risk Analysis
Horizon Technology disclosed 102 risk factors in its most recent earnings report. Horizon Technology reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Horizon Technology Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $4.94B | 9.53 | 19.26% | 5.33% | 51.80% | 12.05% | |
73 Outperform | $2.07B | 10.89 | 12.02% | 8.33% | 8.07% | -22.25% | |
72 Outperform | $1.41B | 21.85 | 3.96% | 15.02% | -28.04% | -69.52% | |
64 Neutral | $13.79B | 10.52 | 9.20% | 4.24% | 17.25% | -7.60% | |
60 Neutral | $291.80M | 9.04 | 9.26% | 18.89% | 22.53% | ― | |
58 Neutral | $684.02M | ― | -8.57% | 16.91% | 8.24% | -207.60% | |
46 Neutral | ― | -1.71% | 14.22% | -22.07% | 75.49% |
* Financial Sector Average
Performance Comparison
HRZN
Horizon Technology
9.18
-0.96
-9.47%
MAIN
Main Street Capital
55.76
13.47
31.85%
TCPC
BlackRock TCP Capital
8.12
-0.91
-10.08%
TPVG
TriplePoint Venture Growth
7.40
-0.67
-8.30%
TSLX
Sixth Street Specialty Lending
22.16
3.14
16.51%
GSBD
Goldman Sachs BDC
12.01
-1.20
-9.08%
Horizon Technology Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: -4.38% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant portfolio growth, strong financial positioning, and a robust pipeline of opportunities, indicating potential for future growth. However, it also noted challenges with a decreased net asset value, stressed investments, and a decline in net investment income. The macro environment and venture capital ecosystem's stress continue to pose challenges.Highlights
Portfolio Growth and High Yield
The portfolio grew to $698 million, with a yield of nearly 16% on debt investments for the full year, remaining at the top of the BDC industry.
Strong Financial Position
Strengthened balance sheet with a new $100 million senior secured credit facility, $20 million convertible debt offering, and $66 million raised from equity sales.
Robust Pipeline and Opportunities
A committed and approved backlog of $207 million and a pipeline of $1.4 billion of opportunities, indicating strong future growth potential.
Regular Distributions and Spillover Income
Declared regular monthly distributions of $0.11 per share through June 2025, with undistributed spillover income of $1.06 per share at year-end.
Lowlights
Net Asset Value Decrease
Net asset value decreased to $8.43 per share, primarily due to fair value markdowns of investments.
Stressed Investments and Credit Quality Concerns
Ongoing challenges with stressed investments, leading to lower net asset value and continued pressure on portfolio company valuations.
Decline in Net Investment Income
Net investment income for the fourth quarter was $0.27 per share, down from $0.45 per share in the fourth quarter of 2023.
Impact of Macro Environment
Continued stress in the venture capital ecosystem with tightened capital availability, a muted IPO and M&A market, affecting overall performance.
Company Guidance
In the fourth quarter of 2024, Horizon Technology Finance Corporation experienced a growth in its portfolio, achieving a portfolio yield of nearly 16% on debt investments for the year. Their net investment income (NII) was $1.32 per share, successfully covering the declared and paid regular monthly distributions. Despite these gains, the net asset value (NAV) decreased to $8.43 per share due to fair value markdowns of investments. The company ended the year with a committed and approved backlog of $207 million, and strengthened its balance sheet by securing a $100 million credit facility with Nuveen, issuing $20 million in convertible debt, and raising over $66 million through equity sales. Looking forward, Horizon anticipates continued portfolio growth and increased NII, supported by a robust pipeline and strong liquidity. Their Board declared regular monthly distributions of $0.11 per share through June 2025. As the venture lending market shows signs of recovery, Horizon remains optimistic about its prospects, focusing on maximizing the value of stressed investments and increasing NAV.Horizon Technology Corporate Events
Private Placements and FinancingM&A TransactionsBusiness Operations and Strategy
Horizon Technology’s Strategic Partnership with Wendel Group
Positive
Oct 22, 2024
Monroe Capital LLC has announced a strategic partnership with Wendel Group, which includes a $1 billion investment to bolster Monroe’s US private credit platform. The deal, set to close in early 2025, will see Wendel acquire a 75% stake in Monroe while allowing Monroe to maintain its independent operations and governance. This partnership aims to expand Monroe’s growth initiatives and strengthen Wendel’s asset management capabilities, with potential participation from AXA IM Prime in the transaction.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.