Jared Tan 17 Followers

Summary

Hercules Capital is rated Hold, with a $15.12 target price and 3.8% expected total return, including an 11.7% dividend yield.

I see downside risk as cheap debt from 2021–2022 is refinanced at over double the cost, pressuring net investment income.

HTGC trades at a 1.35x NAV, a premium to Trinity Capital, but my model forecasts run-rate NII 6.9% below consensus.

Repayment-driven fee income is unlikely to repeat in 3Q26, and total return scenarios range from +12.4% to -6.2%.

Coins moving from one stack to another

Richard Drury/DigitalVision via Getty Images

Investment Thesis

I am rating Hercules Capital, Inc. (HTGC) a Hold for now, as I wait for the 3Q26 results on October 29. The company and its closest internally managed venture lending peer, Trinity Capital (TRIN), will earn about the same per dollar of NAV, at 15.3% and 15.1%, respectively, after Hercules' refinancing takes full effect.…