WhiteHorse Finance (NASDAQ:WHF) Announces Earnings Results, Misses Expectations By $0.03 EPS

WhiteHorse Finance (NASDAQ:WHF) released its quarterly earnings results on Tuesday. The investment management company reported $0.22 earnings per share for the quarter, missing analysts’ consensus estimates of $0.25 by ($0.03), FiscalAI reports. WhiteHorse Finance had a net margin of 26.88% and a return on equity of 8.89%. The business had revenue of $14.37 million for the quarter, compared to analyst estimates of $15.66 million.

Here are the key takeaways from WhiteHorse Finance’s conference call:

• NAV per share increased 2.6% to $11.77, supported by $5.8 million of net unrealized gains—primarily a $4.8 million markup on Chase Products—and more than $0.06 per share of accretion from share repurchases.
• Core net investment income declined to $4.7 million, or $0.217 per share, from $5.6 million, or $0.253 per share, in the prior quarter and fell below the $0.25 quarterly distribution. The company extended a temporary incentive fee waiver for the third quarter, reducing the fee rate to 17.5%.
• Management reported improved lending conditions, including lower leverage, higher pricing, stronger documentation and covenant protection on many new deals. Second-quarter gross deployments totaled $25.4 million, while new first-lien originations averaged approximately 4.2x EBITDA.
• Outward Hound was recapitalized after quarter end, with a substantial portion of debt converted to equity and the restructured term loan returning to accrual status in the third quarter. However, management expects the turnaround could take through 2027, with a potential realization not likely before 2028 absent a strategic buyer.
• The company has $85 million of unsecured notes maturing in December 2026 and ended the quarter with gross leverage of 1.30x and net effective leverage of 1.19x. Share repurchases were paused in late May, with approximately $9.5 million remaining under the authorization, while capacity for additional balance-sheet investments is limited to roughly $10 million.

WhiteHorse Finance Stock Down 1.1%

NASDAQ WHF opened at $7.07 on Thursday. The stock has a market capitalization of $151.84 million, a P/E ratio of 8.95 and a beta of 0.38. WhiteHorse Finance has a 52 week low of $6.07 and a 52 week high of $8.97. The company has a debt-to-equity ratio of 1.30, a quick ratio of 2.23 and a current ratio of 2.23. The stock has a fifty day moving average of $6.56 and a 200-day moving average of $6.89.

WhiteHorse Finance Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Monday, October 5th. Stockholders of record on Monday, September 21st will be paid a $0.25 dividend. This represents a $1.00 annualized dividend and a dividend yield of 14.1%. The ex-dividend date of this dividend is Monday, September 21st. WhiteHorse Finance’s dividend payout ratio (DPR) is 126.58%.

Insider Transactions at WhiteHorse Finance

In other WhiteHorse Finance news, Director John Bolduc bought 15,380 shares of the stock in a transaction on Thursday, June 18th. The stock was purchased at an average price of $6.49 per share, with a total value of $99,816.20. Following the acquisition, the director owned 317,297 shares of the company’s stock, valued at approximately $2,059,257.53. The trade was a 5.09% increase in their ownership of the stock. The purchase was disclosed in a document filed with the Securities & Exchange Commission, which is available at this hyperlink. Also, CEO Stuart D. Aronson bought 15,000 shares of the company’s stock in a transaction on Monday, June 15th. The shares were acquired at an average price of $6.41 per share, with a total value of $96,150.00. Following the transaction, the chief executive officer directly owned 127,000 shares in the company, valued at approximately $814,070. The trade was a 13.39% increase in their position. The SEC filing for this purchase provides additional information. Over the last quarter, insiders purchased 94,940 shares of company stock valued at $627,568. Corporate insiders own 3.80% of the company’s stock.

Hedge Funds Weigh In On WhiteHorse Finance

Hedge funds have recently added to or reduced their stakes in the stock. Advisory Services Network LLC bought a new stake in shares of WhiteHorse Finance in the 3rd quarter valued at about $26,000. Kestra Advisory Services LLC acquired a new stake in WhiteHorse Finance in the fourth quarter worth $44,000. Oxford Asset Management LLP bought a new position in shares of WhiteHorse Finance during the second quarter worth $105,000. O Shaughnessy Asset Management LLC bought a new position in shares of WhiteHorse Finance during the fourth quarter worth $88,000. Finally, Trexquant Investment LP acquired a new position in shares of WhiteHorse Finance in the 4th quarter valued at $108,000. Institutional investors and hedge funds own 13.20% of the company’s stock.

Analyst Upgrades and Downgrades

WHF has been the topic of several research analyst reports. Weiss Ratings cut WhiteHorse Finance from a “hold (c-)” rating to a “sell (d+)” rating in a report on Tuesday, June 2nd. JPMorgan Chase & Co. cut their price target on WhiteHorse Finance from $6.50 to $6.00 and set an “underweight” rating for the company in a report on Thursday, July 2nd. One research analyst has rated the stock with a Hold rating and two have issued a Sell rating to the stock. According to data from MarketBeat, the company currently has an average rating of “Sell” and a consensus price target of $6.00.

About WhiteHorse Finance

WhiteHorse Finance Corporation (NASDAQ: WHF) is a closed-end management investment company organized as a business development company under the Investment Company Act of 1940. The firm’s primary objective is to generate current income and, to a lesser extent, capital appreciation by making debt and equity investments in privately held middle-market companies. WhiteHorse Finance seeks to partner with established businesses across a range of industries, providing flexible financing solutions designed to support growth initiatives, acquisitions and recapitalizations.

The company’s investment portfolio predominantly comprises senior secured loans, second-lien debt, subordinated debt and select equity interests.