Prospect Capital Corporation (NASDAQ:PSEC) is poised to record an improvement in its earnings per share by 6.79% in the next 12 months. The company currently has an EPS of $0.83, a growth rate that puts investors in optimistic moods with an impending EPS of around $0.89. A positive growth in earnings may boost investors’ confidence and increase expectations. It is however important this expectation be compared to the company’s track record. This will enable investors to have a full picture on the prospects are reasonable and supported by past trends. To be able to draw meaningful conclusion from the company’s growth in earnings per share, it is important to examine its recent growth rates.
According to analysts Prospect Capital Corporation’s earnings are expected to go up by between from $0.69 to $1.04 in a year. This shows a much stronger EPS growth rate of 6.8% in the next one or two years. This is an optimist and encouraging trend in the near future. In the same duration, analysts are predicting revenue to drop from 727 Million to $717 in the next one year.
Past records are important indicators on the company’s future performance. It can be used to determine if the level of growth anticipated can be sustained or the company is likely to experience some further headwinds. Prospect Capital Corporation has recorded an underwhelming rate of growth of 187.28%. This growth rate is relatively sustainable in the long run as the company comes out of the high-growth periods. On the other hand, a frail company outlook raises numerous questions on the company’s ability to outperform.
The future of Prospect Capital Corporation looks bright owing to an impressive performance reported in the last one year. Problems in sustaining a double digit growth and near term challenges are some of the problems that the company is fighting. To correctly assess the opportunity available, it is important to evaluate whether the company’s stock have suffered a lot by any negative sentiment. In the event the market views a worse situation than it actually is, over-discounting may make the stock attractive to investors.