Prospect Capital Corporation offers extreme value at 6.6x forward earnings with a 4-for-4 beat streak and 17.6% free cash flow yield, but is in a confirmed price downtrend with a 1.4%/month declining 200-day moving average slope and faces negative revenue growth of -12%, making the setup a deep value trap risk.
Thesis pillars
- Revenue Declining Negative Growth→Stable
- Deep Value Beat Streak→Stable
- Confirmed Price Downtrend↓Deteriorating
- +1 more pillar — see the Why tab for full reasoning
Prospect Capital Corporation (PSEC) Stock Analysis
Inst Constrain edge
Financial Services · Asset Management
Hold if already holding. Not a fresh buy at $2.13, but acceptable to hold if already in. Reasons: Analyst target reached - limited upside remaining; Negative momentum.
Prospect Capital Corporation is a business development company that lends to and invests in privately held U.S. middle-market companies, primarily through senior secured first- and second-lien loans, with approximately $7 billion in total assets as of June 30, 2025. The... Read more
Hold if already holding. Not a fresh buy at $2.13, but acceptable to hold if already in. Reasons: Analyst target reached - limited upside remaining; Negative momentum. Chart setup: No clear chart pattern; technical signals are mixed. Maintain position. Not compelling to add more. Score 6.0/10, moderate confidence.
Passes 6/9 gates (clean insider activity, no SEC red flags, news events none recent, earnings proximity 32d clear, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum and favorable risk/reward ratio and death cross (50MA < 200MA). Suitability: aggressive.
About Prospect Capital Corporation
About Prospect Capital Corporation
Prospect Capital Corporation held approximately $7 billion in total assets as of June 30, 2025, deployed primarily as senior secured first- and second-lien loans to privately held U.S. middle-market companies with annual revenues below $750 million. The portfolio spans 32 industry categories, with no single industry exceeding 19.5% of the portfolio on a cost or fair-value basis, and Prospect also holds real estate and structured-credit positions through National Property REIT Corp.
Prospect operates as an externally managed, non-diversified BDC: Prospect Capital Management, led by John F. Barry III and M. Grier Eliasek, originates, structures and monitors every investment in exchange for a 2.00% annual base management fee on gross assets plus a two-part incentive fee — 20% of pre-incentive-fee net investment income above a 1.75% quarterly hurdle rate, and 20% of realized capital gains net of losses. Most loans are senior and secured, ranking ahead of unsecured debt and equity in a portfolio company's capital structure, with typical commitments below $250 million; up to 30% of assets may go to broadly traded public companies, non-U.S. issuers, or CLO equity and junior debt tranches, though Prospect has significantly exited CLO investing. As a regulated investment company, Prospect must invest at least 70% of assets in eligible U.S. private or thinly traded portfolio companies to retain its tax status.
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Prospect's 10-K flags a distinct risk from its industry diversification: the portfolio contains a limited number of portfolio companies, some of which comprise a substantial percentage of the total, exposing Prospect to a greater risk of significant loss if any single one defaults. That concentration sits alongside a second dependency the filing discloses directly — Prospect's results hinge on the continued service of Prospect Capital Management's senior management, particularly John F. Barry III and M. Grier Eliasek, whose departure the 10-K says could have a materially adverse effect on the company's ability to achieve its investment objective.
See also: Financial Services · Asset Management
From Prospect Capital Corporation's most recent 10-K filing, extracted July 6, 2026.
Recent developments
updated 2026-07-26Recent Developments — Prospect Capital Corporation
Latest news
- NEWS Prospect Capital (NASDAQ:PSEC) Stock Passes Above 200-Day Moving Average - Should You Sell? - MarketBeat — MarketBeat neutral
- NEWS Prospect Capital Corporation 5.35% Series A Fixed Rate Cumulative Perpetual Preferred Stock (PSEC/PA) - Minichart — Minichart neutral
- NEWS Earnings Preview: PSEC to Report Financial Results Post-market on May 07 - 富途牛牛 — 富途牛牛 neutral
- NEWS Prospect Capital Schedules Third Fiscal Quarter Earnings Release and Conference Call - marketscreener.com — marketscreener.com neutral
- NEWS Prospect Capital Schedules Third Fiscal Quarter Earnings Release and Conference Call - Moomoo — Moomoo neutral
Generated 2026-07-26T10:02:08Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- MEDIUMCustomerlimited number of portfolio companies10-K Item 1A: 'Our portfolio contains a limited number of portfolio companies, some of which comprise a substantial percentage of our portfolio'
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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Rating Breakdown
1 floor-breaker·1 ceiling hit
Price action weak — below key moving averages, no momentum carry. Needs a base before trend-continuation setups apply.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Hold if already holding. Not a fresh buy at $2.13, but acceptable to hold if already in. Reasons: Analyst target reached - limited upside remaining; Negative momentum. Chart setup: No clear chart pattern; technical signals are mixed. Maintain position. Not compelling to add more. Target $2.32 (+8.9%), stop $2.05 (−3.9%), A.R:R -3.9:1. Score 6.0/10, moderate confidence.
Take-profit target: $2.32 (-19.8% upside). Target $2.32 (+8.9%), stop $2.05 (−3.9%), A.R:R -3.9:1. Stop-loss: $2.05.
Analyst target reached - limited upside remaining; Negative momentum; Below 200-day MA.
Prospect Capital Corporation trades at a P/E of N/A (forward 6.1). TrendMatrix value score: 9.6/10. Verdict: Hold.
6 analysts cover PSEC with a consensus score of 2.0/5. Average price target: $2.
What does Prospect Capital Corporation do?Prospect Capital Corporation is a business development company that lends to and invests in privately held U.S....
Prospect Capital Corporation is a business development company that lends to and invests in privately held U.S. middle-market companies, primarily through senior secured first- and second-lien loans, with approximately $7 billion in total assets as of June 30, 2025. The externally managed BDC also holds real estate and structured-credit positions through National Property REIT Corp., earning income from portfolio interest, fees, and capital appreciation.