Horizon Technology Finance: Q1 Earnings Disappoint And Reinforce Dividend Weakness

Summary

• Horizon Technology Finance's earnings continue to decline, with a 37.6% price drop over the last year, leading to a potential HRZN dividend cut in 2025.
• The BDC's concentrated portfolio in healthcare technology and high non-accruals weaken its ability to generate positive growth in a high interest rate environment.
• HRZN's NAV has consistently declined, and net investment income fails to cover distributions, suggesting an unsustainable dividend and the need for a cut.
• Despite management's optimism, macroeconomic uncertainties and tariff policies pose significant risks, leading to a maintained sell rating on HRZN.

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Overview

When I previously covered Horizon Technology Finance (NASDAQ:HRZN), I issued a sell rating due to the declining earnings, increased non-accruals, and possibility for a dividend cut. Since the time of my last coverage, HRZN has

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.