PennantPark Floating Rate Capital Ltd. (PFLT)
Valuation Overview•Is PennantPark Floating Rate Capital Ltd. Overvalued or Undervalued?
The market is pricing the stock in line with historical averages, assuming steady-state growth.
Moderate quality score of 56/100, reflecting stable operating margins and manageable leverage.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Average quality business weighed down by significant solvency concerns.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. This outlook is strongly supported by highly attractive capital returns, anchored by a strong dividend yield, though free cash flow coverage appears tight.
PFLT demonstrates strong business quality with robust profitability and healthy margins. However, this is severely offset by a highly leveraged balance sheet (Debt/EBITDA > 4.0x) and elevated financial risk.
The company maintains stable top-line performance paired with highly explosive earnings growth (104.6% EPS 3Y CAGR). This growth is supported by elite operational efficiency, sustaining an impressive 49.9% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $58.4M | +2.2% | — | — | +23.7% | |
| EBITDA | $52.9M | — | +100.1% | — | — | |
| Net Income | $28.7M | -27.7% | +167.9% | — | +18.2% | |
| EPS (Diluted) | $0.29 | -48.6% | +104.6% | +8.9% | -0.7% | |
| Free Cash Flow | -$8.9M | +111.9% | — | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 49.8% | 54.3% | 53.0% | 60.7% |
| Operating Margin | 49.9% | 47.2% | 46.0% | 50.1% |
| Net Margin | 34.8% | 47.4% | 43.7% | 48.7% |
| FCF Margin | 117.4% | -82.4% | -60.0% | -146.5% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.28 | $0.27 | -3.6% | ||
| Q1'26 | $0.30 | $0.27 | -10.0% | ||
| Q4'25 | $0.29 | $0.28 | -1.9% | ||
| Q3'25 | $0.28 | $0.25 | -10.7% | ||
| Q2'25 | $0.33 | $0.28 | -15.2% | ||
| Q1'25 | $0.31 | $0.33 | +6.5% | ||
| Q4'24 | $0.32 | $0.32 | +0.7% | ||
| Q3'24 | $0.32 | $0.31 | -3.1% |
Total return is -16.4% (1Y), lagging the benchmark by -41.4%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -14.1% | -23.4% | — |
| 1Y | -16.4% | -41.4% | +11.6% |
| 3YCAGR | +1.9% | -17.3% | +34.8% |
| 5YCAGR | +1.4% | -11.3% | +47.7% |
| 10YCAGR | +4.4% | -9.1% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about PennantPark Floating Rate Capital Ltd. (PFLT) valuation, health, and returns.
Based on peer relative multiples, PennantPark Floating Rate Capital Ltd. appears Fair versus peers compared to industry peers.
PennantPark Floating Rate Capital Ltd. has multiple valuation anchors: Peer Relative Fair Value: $7.99 | Wall Street Analyst Target: $9.75 (implying +30.3% upside). A convergence of these signals offers higher conviction.
PennantPark Floating Rate Capital Ltd. displays fair financial health with a composite quality score of 56/100, supported by a Piotroski F-Score of 4/9, Return on Invested Capital (ROIC) of 2.1%.
PennantPark Floating Rate Capital Ltd. pays a 16.1% dividend yield, covered by a 168% payout ratio with 0 years of growth, supplemented by a 0.0% buyback yield.
PennantPark Floating Rate Capital Ltd.'s current growth trajectory is Decelerating. The company achieved +2.2% 1Y revenue growth and -48.6% 1Y EPS growth, compared to its 3Y revenue CAGR of N/A.
Wall Street consensus is Buy based on 11 analysts, beating EPS expectations in 42% of recent quarters with a -5-quarter streak. The consensus price target represents a +30.3% change from current levels.
Investment risks for PennantPark Floating Rate Capital Ltd. include: -30.9% 1-year max drawdown, stretched payout ratio. Volatility risk is characterized by a beta of 0.78x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.