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Hercules Capital (HTGC): Revisiting Valuation After Strong Long-Term Returns and Recent Share Price Pause

Simply Wall St · 2d ago

Hercules Capital (HTGC) has quietly outperformed many income names over the past year, even with a softer past 3 months. With shares near 18.76, investors are weighing growth against payout stability.

See our latest analysis for Hercules Capital.

That recent 1 month share price return of 5.33 percent looks more like a healthy pause in a longer advance, especially alongside a 1 year total shareholder return of 8.9 percent and an impressive 5 year total shareholder return of 136.17 percent. This hints that income plus growth remains firmly on the table.

If Hercules Capital has you rethinking how you balance income and upside, this could be a good moment to explore fast growing stocks with high insider ownership for more ideas with momentum behind them.

With shares still trading at a discount to analyst targets and intrinsic value, investors now face a pivotal question: is Hercules Capital genuinely undervalued, or is the market already pricing in the bulk of its future growth?

Most Popular Narrative: 11.6% Undervalued

With Hercules Capital closing at $18.76 against a narrative fair value of $21.22, the current price implies investors are not fully paying for projected growth and margin gains.

In order for you to agree with the analyst's consensus, you would need to believe that by 2028, revenues will be $677.4 million, earnings will come to $455.0 million, and it would be trading on a PE ratio of 13.5x, assuming you use a discount rate of 9.7%.

Read the complete narrative.

Curious what kind of revenue runway, margin expansion, and earnings power are baked into that outlook, and how a single profit multiple ties it all together? The full narrative breaks down the numbers behind that confidence.

Result: Fair Value of $21.22 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, intensifying competition and Hercules Capital's heavy tilt toward tech and life sciences could pressure yields and magnify losses if those sectors stumble.

Find out about the key risks to this Hercules Capital narrative.

Build Your Own Hercules Capital Narrative

If the consensus view does not quite fit your outlook and you would rather dig into the numbers yourself, you can build a personalized Hercules Capital narrative in just a few minutes, starting with Do it your way.

A great starting point for your Hercules Capital research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.