B.Riley Financial analyst Bryce Rowe has reiterated their bullish stance on RWAY stock, giving a Buy rating yesterday.
Bryce Rowe has given his Buy rating for Runway Growth Finance Corp’s stock due to various factors. Rowe perceives that RWAY has a compelling risk-return profile. This is evident from its lower-risk balance sheet characterized by low debt/equity ratio, substantial available liquidity, and an investment portfolio largely comprising of first-lien, senior secured loans to mature growth companies with significant operating histories and enterprise values. Moreover, RWAY is trading at 92% of its net asset value (NAV), which is a discount compared to its peers who trade at an average of 112% of NAV. Rowe’s price target of $14.50 is 103% of NAV, suggesting a potential one-year total return of 25%, inclusive of a 13% dividend yield.
The third quarter results of 2023 also exceeded B. Riley’s and the consensus’ expectations, supported by prepayment fees and end-of-term payments. Additionally, repayments surpassed originations, and the company has a promising pipeline of late-stage venture debt investment opportunities that could convert into funded loans over the subsequent quarters. The balance sheet leverage has reduced with repayments outstripping originations. RWAY is well-positioned with significant capacity to grow the investment portfolio given more than $300M of available liquidity. Furthermore, RWAY’s board approved a $25M stock repurchase program, which could be an effective capital management tool, especially if the stock continues to trade at a substantial discount to NAV and peers.
In another report released yesterday, Compass Point also maintained a Buy rating on the stock with a $14.50 price target.
RWAY’s price has also changed moderately for the past six months – from $11.310 to $13.230, which is a 16.98% increase.
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Runway Growth Finance Corp (RWAY) Company Description:
Runway Growth Finance Corp is a specialty finance company focused on providing senior secured loans to high-growth-potential companies in technology, life sciences, healthcare information and services, business services, select consumer services and products and other high-growth industries.
Read More on RWAY:
- Runway Growth Finance reports Q3 EPS 54c, consensus 47c
- Runway Growth Finance Corp. Reports Third Quarter 2023 Financial Results
- Runway Growth Finance Corp. Announces Fourth Quarter Dividend of $0.40 with $0.06 Supplemental Distribution
- Runway Growth Finance board declares supplemental dividend of 6c per share
- Runway Growth Finance Corp. Announces Date for Third Quarter 2023 Financial Results and Conference Call
