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Gladstone Capital
(NASDAQ:GLAD)
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Rating:67Neutral
Price Target:
$21.00
▲(5.85% Upside)
Action:Reiterated
Date:10/02/26
The score is anchored by mixed fundamentals: strong reported profitability and improving leverage are weighed down by materially negative and volatile TTM cash flow. Valuation is a notable positive (low P/E and high dividend yield), while technicals are mildly supportive but not strong. The latest earnings call reinforces dividend support and origination visibility, partially offset by credit/non-earning asset and funding-cost risks.
Positive Factors
Stable portfolio yield and interest income
Growing interest income and an unchanged 11.8% weighted average yield support recurring revenue from GLAD's debt portfolio. This stability is important for a lender because predictable portfolio earnings provide a durable base for covering operating costs and shareholder distributions.
Negative Factors
Volatile and negative cash generation
Deeply negative trailing operating and free cash flow indicate that reported earnings are not consistently translating into cash. The reversal from 2025 and several prior periods of negative operating cash flow raise concerns about funding flexibility and the durability of cash available for investment and distributions.
Read all positive and negative factors
Positive Factors
Negative Factors
Stable portfolio yield and interest income
Growing interest income and an unchanged 11.8% weighted average yield support recurring revenue from GLAD's debt portfolio. This stability is important for a lender because predictable portfolio earnings provide a durable base for covering operating costs and shareholder distributions.
Read all positive factors
Gladstone Capital (GLAD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$424.98M
Dividend Yield11.06%
Average Volume (3M)159.20K
Price to Earnings (P/E)8.8
Beta (1Y)0.86
Revenue Growth-38.83%
EPS Growth-36.61%
CountryUS
Employees73
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)2.14
Shares Outstanding22,593,070
10 Day Avg. Volume165,543
30 Day Avg. Volume159,204
Financial Highlights & Ratios
PEG Ratio-0.21
Price to Book (P/B)1.01
Price to Sales (P/S)3.38
P/FCF Ratio11.21
Enterprise Value/Market Cap2.41
Enterprise Value/Revenue12.92
Enterprise Value/Gross Profit18.82
Enterprise Value/Ebitda18.03
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.96
Revenue Forecast (FY)$109.52M
Gladstone Capital Business Overview & Revenue Model
Company Description
Gladstone Capital Corporation functions as a Business Development Company (BDC) primarily focused on the lower middle market in the United States. The firm engages in a variety of investment strategies, including providing growth capital, supporti...
How the Company Makes Money
Gladstone Capital makes money primarily from investment income generated by its financing activities. Its core revenue stream is interest income earned on debt investments (typically senior secured and/or subordinated loans) made to portfolio comp...
Gladstone Capital Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Nov 16, 2026
Earnings Call Sentiment Positive
The call presented multiple constructive operational and financial indicators: rising interest income, stable high portfolio yield (11.8%), positive net portfolio appreciation, a healthy and growing pipeline, higher total assets and NAV per share, and distribution coverage above 100% (NII covers 109% of distributions). Offsetting concerns include a decline in total investment income driven by one-time fee normalization, a modest decline in NII, an increase in financing costs, a rise in non-earning assets including the re-default at Eegee's, and leverage ticking up to 100% of NAV. Overall, the positive indicators around portfolio yield stability, originations pipeline, NAV improvement and maintained shareholder distributions outweigh the manageable credit and income timing headwinds.Positive Updates
Fundings and Originations
Fundings totaled $82 million for the quarter, including four new investments totaling $67 million and $15 million in advances to existing portfolio companies. Exits and repayments were $40 million, yielding net originations of $42 million for the quarter.
Negative Updates
Decline in Total Investment Income
Total investment income declined by $1.5 million to $24.5 million compared with the prior quarter, primarily due to the loss of a large one-time prepayment fee received in the prior period.
Read all updates
Q3-2026 Updates
Positive
Negative
Fundings and Originations
Fundings totaled $82 million for the quarter, including four new investments totaling $67 million and $15 million in advances to existing portfolio companies. Exits and repayments were $40 million, yielding net originations of $42 million for the quarter.
Read all positive updates
Company Guidance
Management guided to modest net asset growth with originations pacing roughly $75M per quarter (consistent with ~$350M/year), repayments/exits running about $35–50M/qtr, and a committed pipeline well in excess of recent repayments that should support follow‑on investments; they do not expect reinvestments to reduce the weighted‑average yield (unchanged at 11.8%) and see new deals bidding spreads in the high‑6s/low‑7s (about a 7% spread over SOFR) with average leverage on new debt under ~3x EBITDA. Leverage remains modestly elevated (net/gross leverage around 100% of NAV), the company will continue to rely on floating‑rate bank facilities, and recently issued a $60M 7.0% note due Dec‑2029; balance sheet metrics at Jun‑30 were $970M total assets, $953M investments (fair value), $439M liabilities and $485.7M net assets (NAV $21.50/share). Near‑term cash flow guidance: August/September distributions of $0.15/month ($1.80 annual run rate, ~9.3% yield at a $19.35 share price), with the Board to set October distributions, and management expects net investment income ($11.0M / $0.49 per share this quarter, 109% of cash distributions) plus portfolio appreciation (Q = $3M unrealized) to continue to support dividends; note also five non‑earning debt investments with $46M cost ($26.7M fair value, ~3.1% of debt investments) and a $12M Imperative prepayment already received (with a slightly larger prepayment expected) that removes oil & gas exposure and will reduce upcoming PIK income.Gladstone Capital Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
70
Positive
Cash Flow
42
Neutral
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 79.21M | 144.76M | 120.26M | 65.83M | 33.03M | 97.55M |
| Gross Profit | 54.39M | 126.33M | 98.55M | 44.98M | 20.06M | 86.04M |
| EBITDA | 56.77M | 82.68M | 96.58M | 42.67M | 37.01M | 85.65M |
| Net Income | 50.26M | 58.11M | 94.72M | 42.67M | 19.91M | 84.30M |
Balance Sheet | ||||||
| Total Assets | 970.12M | 907.60M | 812.47M | 719.50M | 660.97M | 566.50M |
| Cash, Cash Equivalents and Short-Term Investments | 2.35M | 32.37M | 2.17M | 1.31M | 2.01M | 671.00K |
| Total Debt | 429.88M | 397.86M | 324.61M | 300.91M | 339.41M | 237.11M |
| Total Liabilities | 438.76M | 425.56M | 333.73M | 310.80M | 345.48M | 248.06M |
| Stockholders Equity | 530.74M | 482.04M | 478.74M | 408.69M | 315.49M | 318.44M |
Cash Flow | ||||||
| Free Cash Flow | -150.76M | 43.63M | 3.24M | -10.86M | -76.40M | -14.06M |
| Operating Cash Flow | -150.76M | 43.63M | 3.24M | -10.86M | -76.40M | -14.06M |
| Investing Cash Flow | 0.00 | -49.12M | 0.00 | 0.00 | -259.05M | -165.99M |
| Financing Cash Flow | 137.80M | 35.55M | -2.34M | 10.15M | 77.66M | 12.44M |
Gladstone Capital Technical Analysis
Negative
19.84
Price Trends
19.25
Negative
18.92
Negative
18.40
Positive
Market Momentum
-0.11
Positive
41.28
Neutral
32.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GLAD, the sentiment is Negative. The current price of 19.84 is above the 20-day moving average (MA) of 19.19, above the 50-day MA of 19.25, and above the 200-day MA of 18.40, indicating a neutral trend. The MACD of -0.11 indicates Positive momentum. The RSI at 41.28 is Neutral, neither overbought nor oversold. The STOCH value of 32.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GLAD.
Gladstone Capital Risk Analysis
Gladstone Capital disclosed 61 risk factors in its most recent earnings report. Gladstone Capital reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Gladstone Capital Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | $424.98M | 8.79 | 10.19% | 11.06% | -38.83% | -36.61% | |
64 Neutral | $662.78M | 13.03 | 4.82% | 17.26% | 12.58% | -40.06% | |
63 Neutral | $334.93M | -101.00 | -0.46% | 17.38% | -28.84% | -107.31% | |
60 Neutral | $336.45M | -3.17 | -17.68% | 18.95% | -141.00% | -809.18% | |
58 Neutral | $341.47M | 25.70 | 1.84% | 18.16% | 3.63% | ― | |
47 Neutral | $233.86M | -60.12 | >-0.01% | 21.62% | -10.96% | -110.82% |
* Financial Sector Average
GLAD
Gladstone Capital
18.81
0.63
3.49%
PFLT
Pennantpark
6.68
-0.96
-12.55%
SAR
Saratoga Investment
15.03
-3.78
-20.10%
TCPC
BlackRock TCP Capital
4.01
-0.73
-15.37%
CCAP
Crescent Capital BDC
9.09
-3.00
-24.79%
CION
CION Investment Corp
6.94
-1.01
-12.73%
Gladstone Capital Corporate Events
Business Operations and StrategyExecutive/Board Changes
Gladstone Capital Names Michael McQuigg as New President
Positive
Oct 1, 2026
On October 1, 2026, Gladstone Capital Corporation implemented its previously announced leadership transition by appointing Michael McQuigg as president, while Robert Marcotte stepped down from that role but remained chief executive officer. McQuig...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.