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
Range Bound setup · Inst Constrain edge
Financial Services · Asset Management
Hold if already holding. Not a fresh buy at $2.22, but acceptable to hold if already in. Reasons: Analyst target reached - limited upside remaining; Weak growth.
Prospect Capital Corporation is a closed-end business development company (BDC) with approximately $7 billion in total assets as of June 30, 2025, one of the longest-running and largest in the industry. The company lends primarily to privately held U.S. middle-market businesses... Read more
Hold if already holding. Not a fresh buy at $2.22, but acceptable to hold if already in. Reasons: Analyst target reached - limited upside remaining; Weak growth. Chart setup: RSI 41 mid-range, Bollinger mid-band. Maintain position. Not compelling to add more. Score 5.3/10, moderate confidence.
Passes 6/9 gates (clean insider activity, no SEC red flags, news events none recent, earnings proximity 53d 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, making it one of the longest-running and largest business development companies (BDCs) in its category. Regulated as a BDC under the Investment Company Act of 1940 and as a regulated investment company under Subchapter M of the Internal Revenue Code, the company invests primarily in senior and secured first- and second-lien loans to private U.S. middle-market companies, alongside smaller equity and real estate positions.
Prospect Capital Management, the company's external investment adviser, earns a base management fee equal to an annual rate of 2.00% on gross assets, plus a two-part incentive fee: 100% of pre-incentive-fee net investment income between the 7.00% annualized hurdle rate and 8.75%, and 20% above that threshold, alongside a 20% capital gains incentive fee on realized gains net of losses and unrealized depreciation. The company funds a portion of its portfolio with borrowed money and issued preferred stock, subject to a 150% asset coverage requirement under the Investment Company Act of 1940. Beyond direct lending, Prospect invests a lesser portion of assets in senior and secured debt and controlling equity positions in real estate investment trusts through National Property REIT Corp., and historically held equity and debt tranches of collateralized loan obligations, though it has significantly exited most CLO positions. The portfolio spans 32 industry categories, with no individual industry — excluding CLO holdings — exceeding 19.5% of the portfolio on a cost or fair-value basis.
Show full overview
Prospect's investment structure carries two dependency risks not fully captured by its industry diversification: the portfolio contains a limited number of portfolio companies, some of which comprise a substantial percentage of the portfolio, exposing the company to a greater risk of significant loss if any single borrower defaults on its debt obligations. Separately, because Prospect is externally managed, its future success depends to a significant extent on the continued service of the Investment Adviser's senior management team, particularly John F. Barry III and M. Grier Eliasek — the filing states their departure 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 August 23, 2026.
Recent developments
updated 2026-09-13Recent 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 schedules FY26 earnings release for Aug 20 - scanx.trade — scanx.trade neutral
- NEWS Prospect Capital Corporation Announces Timing for Fiscal 2026 Form 10-K Filing, Earnings Release and Conference Call - Q — Quiver Quantitative neutral
- NEWS Prospect Capital Schedules Fiscal Year Earnings Release and Conference Call - marketscreener.com — marketscreener.com neutral
- NEWS Prospect Capital Corporation 5.35% Series A Fixed Rate Cumulative Perpetual Preferred Stock (PSEC/PA) - Minichart — Minichart neutral
Generated 2026-09-14T05:21:58Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- MEDIUMloan_portfolioportfolio 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.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
Rating Breakdown
2 floor-breakers
Revenue shrinking — -6.7% YoY. Growth thesis broken unless recovery story develops.static
Momentum below the gate floor. Component breakdown shows what dragged the score down.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Hold if already holding. Not a fresh buy at $2.22, but acceptable to hold if already in. Reasons: Analyst target reached - limited upside remaining; Weak growth. Chart setup: RSI 41 mid-range, Bollinger mid-band. Maintain position. Not compelling to add more. Target $2.28 (+2.7%), stop $2.10 (−5.7%), A.R:R -4.7:1. Score 5.3/10, moderate confidence.
Take-profit target: $2.28 (-23.4% upside). Target $2.28 (+2.7%), stop $2.10 (−5.7%), A.R:R -4.7:1. Stop-loss: $2.10.
Analyst target reached - limited upside remaining; Weak growth; Negative momentum.
Prospect Capital Corporation trades at a P/E of 37.0 (forward 6.3). TrendMatrix value score: 8.4/10. 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 closed-end business development company (BDC) with approximately $7 billion in total...
Prospect Capital Corporation is a closed-end business development company (BDC) with approximately $7 billion in total assets as of June 30, 2025, one of the longest-running and largest in the industry. The company lends primarily to privately held U.S. middle-market businesses with annual revenues below $750 million, mainly through senior and secured first-lien loans plus equity and equity-linked investments, with its portfolio spread across 32 industry categories. Prospect is externally managed by Prospect Capital Management, which earns a 2.00% annual base management fee plus a two-part inc