MeritValue

Hercules Capital, Inc.

HTGCdata completeness 100%6 fiscal years on file

Data notes: no data for concept 'incomeTaxExpense'; no data for concept 'pretaxIncome'

The thesis, from the filings

Hercules Capital, Inc. earns about 14% on equity, but has diluted owners by 63% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $14.43 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$253.4M1$307.3M2$434.4M3$467.2M3$507.9M3
Net income$174.2M4$102.1M5$337.5M6$263M6$339.7M6
Operating cash flow$128.6M7−$424.8M8$68.3M9−$118.1M9−$425.8M9
Capital expenditure$106,00010$114,00011$887,00012$705,00012$89,00012
Free cash flow (derived)$128.5M7−$424.9M8$67.4M9−$118.8M9−$425.9M9
Total debt$1.24B13$1.57B14$1.55B15$1.77B16$2.29B16
Cash & equivalents$133.1M17$14.6M18$98.1M19$42.7M19$56.9M19
Diluted shares116.0M126.7M144.8M161.6M188.9M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$117.34
your share of equity
Profit it earned you last year
$17.99
Free cash flow it threw off
−$22.55
Debt you’d be carrying
$121.06

10 shares is a claim on $117.34 of net worth that earned you $17.99 and generated −$22.55 of cash last year, against $121.06 of debt.

iii. Is this a good business?
Moat signal · return on equity
14% avg · 5y
FY21 13%FY22 7%FY23 19%FY24 13%FY25 15%

It earned an average 14% on equity over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+63% shares · 5y

Share count is up 63% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 85% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
$14.43
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$263M
  • growthAssumed0.0%
Graham Number
$22.1
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001280784-24-000007 (InterestAndDividendIncomeOperating)
  2. 10-K · period ending 2022-12-31 · accession 0001280784-25-000007 (InterestAndDividendIncomeOperating)
  3. 10-K · period ending 2023-12-31 · accession 0001280784-26-000009 (InterestAndDividendIncomeOperating)
  4. 10-K · period ending 2021-12-31 · accession 0001280784-24-000007 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001280784-25-000007 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001280784-26-000009 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001280784-24-000007 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001280784-25-000007 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001280784-26-000009 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001280784-24-000007 (PaymentsToAcquireProductiveAssets)
  11. 10-K · period ending 2022-12-31 · accession 0001280784-25-000007 (PaymentsToAcquireProductiveAssets)
  12. 10-K · period ending 2023-12-31 · accession 0001280784-26-000009 (PaymentsToAcquireProductiveAssets)
  13. 10-K · period ending 2021-12-31 · accession 0000950170-23-003044 (LongTermDebt)
  14. 10-K · period ending 2022-12-31 · accession 0001280784-24-000007 (LongTermDebt)
  15. 10-K · period ending 2023-12-31 · accession 0001280784-25-000007 (LongTermDebt)
  16. 10-K · period ending 2024-12-31 · accession 0001280784-26-000009 (LongTermDebt)
  17. 10-K · period ending 2021-12-31 · accession 0001280784-24-000007 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0001280784-25-000007 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0001280784-26-000009 (CashAndCashEquivalentsAtCarryingValue)