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Prospect Capital (PSEC) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Prospect Capital (PSEC) closed at $6.68 in the latest trading session, marking a +1.98% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.97%. Meanwhile, the Dow gained 1.09%, and the Nasdaq, a tech-heavy index, added 1.08%.

Coming into today, shares of the business development company had lost 1.65% in the past month. In that same time, the Finance sector lost 1.97%, while the S&P 500 lost 3.04%.

Wall Street will be looking for positivity from PSEC as it approaches its next earnings report date. This is expected to be February 6, 2019. In that report, analysts expect PSEC to post earnings of $0.22 per share. This would mark year-over-year growth of 10%. Meanwhile, our latest consensus estimate is calling for revenue of $183.72 million, up 13.13% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.95 per share and revenue of $755.51 million, which would represent changes of +20.25% and +14.85%, respectively, from the prior year.

Any recent changes to analyst estimates for PSEC should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. PSEC is holding a Zacks Rank of #1 (Strong Buy) right now.

Looking at its valuation, PSEC is holding a Forward P/E ratio of 6.89. Its industry sports an average Forward P/E of 9.86, so we one might conclude that PSEC is trading at a discount comparatively.

The Financial - Investment Management industry is part of the Finance sector. This group has a Zacks Industry Rank of 241, putting it in the bottom 6% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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