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What's in Store for Horizon Technology (HRZN) in Q4 Earnings?

Horizon Technology Finance Corporation HRZN is scheduled to announce fourth-quarter and full-year 2021 results on Mar 1, after market close. Its quarterly revenues and earnings are anticipated to have improved on a year-over-year basis.

In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate. Results reflected an improvement in total investment income and solid portfolio activity. However, higher expenses hurt results to some extent.

Horizon Technology has an impressive earnings surprise history. The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 5.43%.

Earnings & Sales Projections for Q4

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 33 cents, unchanged over the past seven days. The figure indicates a jump of 57.1% from the year-ago quarter’s reported number.

The consensus estimate for sales of $14.8 million suggests 46.7% growth on a year-over-year basis.

Other Key Factors

While announcing the fourth-quarter portfolio update in January, Horizon Technology noted that it originated $118.2 million of new loans through its platform during the quarter. Further, HRZN witnessed liquidity events from seven portfolio companies, including principal prepayments of $55.0 million and receipt of warrant and equity proceeds worth $0.4 million.

Also, the company received regularly scheduled principal payments on investments totaling $2.9 million. Thus, driven by these factors, the company’s total interest income from investments (constituting a significant portion of its total investment income) is expected to have improved year over year.

Horizon Technology has been recording higher expenses over the past several quarters. As it continues to invest in venture growth stage companies, operating expenses are expected to have been elevated in the fourth quarter.

Earnings Whispers

According to our quantitative model, it cannot be conclusively predicted whether Horizon Technology will be able to beat the Zacks Consensus Estimate this time. This is because it does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Horizon Technology has an Earnings ESP of 0.00%.

Zacks Rank: The company currently carries a Zacks Rank #3.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Stocks in the Same Industry

Hercules Capital Inc.’s HTGC fourth-quarter 2021 net investment income of 35 cents per share beat the Zacks Consensus Estimate of 33 cents. However, the bottom line fell 5.4% from the year-ago quarter figure.

HTGC recorded a fall in total investment income and higher expenses during the quarter. The balance sheet position remained strong and new commitments were robust.

Ares Capital Corporation’s ARCC fourth-quarter 2021 net investment income of 52 cents per share beat the Zacks Consensus Estimate of 50 cents. The bottom line, however, reflected a fall of 3.7% from the prior-year quarter.

The results were aided by a rise in total investment income. Portfolio activity remained solid for ARCC during the quarter. However, an increase in expenses was the undermining factor.

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Ares Capital Corporation (ARCC): Free Stock Analysis Report
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Horizon Technology Finance Corporation (HRZN): Free Stock Analysis Report
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