MeritValue

PROSPECT CAPITAL CORP

PSECdata completeness 75%12 fiscal years on file

Data notes: no data for concept 'revenue'; no data for concept 'capex'; no data for concept 'depreciationAmortization'; no data for concept 'gainsOnRealEstateSales'; no data for concept 'realEstateImpairment'; no data for concept 'incomeTaxExpense'; no data for concept 'pretaxIncome'

The thesis, from the filings

PROSPECT CAPITAL CORP earns about -1% on equity, and has bought back 23% of its shares over 5 years. The cash-flow models don't apply cleanly here — the ledger says why below.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 2024FY 2024FY 2025FY 2025FY 2026
Revenue—————
Net income$262.8M1$234.1M1−$469.9M1−$490.5M1$153.7M1
Operating cash flow$280M2—$523.2M2—$516.3M2
Capital expenditure—————
Free cash flow (derived)—————
Total debt$2.43B3—$2.09B4—$1.86B4
Cash & equivalents$85.9M5—$50.8M6—$43.6M6
Diluted shares625.3M429.0M440.3M462.3M479.9M

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
$61.03
your share of equity
Profit it earned you last year
$3.2
Free cash flow it threw off
—
Debt you’d be carrying
$38.77

10 shares is a claim on $61.03 of net worth that earned you $3.2 last year, against $38.77 of debt.

iii. Is this a good business?
Moat signal · return on equity
-1% avg · 5y
FY24 7%FY24 —FY25 -16%FY25 —FY26 5%

It earned an average -1% 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
−23% shares · 5y

Share count is down 23% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has fallen 24% — deleveraging.

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 v0.5.0
DCF · Growth Exit 10Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
DCF · Growth Exit 5Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
Earnings Power Value
not applicable
business development company / RIC — reported earnings are dominated by unrealised marks on private holdings, and a RIC must distribute ~90% of income so it cannot retain earnings to compound. Capitalising them would be meaningless, not merely imprecise. Price/NAV is the applicable lens.
Graham Number
not applicable
business development company / RIC — reported earnings are dominated by unrealised marks on private holdings, and a RIC must distribute ~90% of income so it cannot retain earnings to compound. Capitalising them would be meaningless, not merely imprecise. Price/NAV is the applicable lens.

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2024-06-30 · accession 0001287032-26-000269 (NetIncomeLoss)
  2. 10-K · period ending 2024-06-30 · accession 0001287032-26-000269 (NetCashProvidedByUsedInOperatingActivities)
  3. 10-K · period ending 2024-06-30 · accession 0001287032-25-000232 (LongTermDebt)
  4. 10-K · period ending 2025-06-30 · accession 0001287032-26-000269 (LongTermDebt)
  5. 10-K · period ending 2024-06-30 · accession 0001287032-25-000232 (CashAndCashEquivalentsAtCarryingValue)
  6. 10-K · period ending 2025-06-30 · accession 0001287032-26-000269 (CashAndCashEquivalentsAtCarryingValue)