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Gladstone Investment (GAIN)
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Gladstone Investment (GAIN) AI Stock Analysis

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Gladstone Investment

(NASDAQ:GAIN)

Rating:72Outperform
Price Target:
$15.50
▲(8.70%Upside)
Gladstone Investment's overall stock score reflects its solid valuation and positive technical indicators, which are bolstered by a strong dividend yield and attractive P/E ratio. While financial performance is generally strong, concerns over revenue volatility and leverage highlight areas for improvement. The positive sentiment from the earnings call further supports the stock's favorable outlook.

Gladstone Investment (GAIN) vs. SPDR S&P 500 ETF (SPY)

Gladstone Investment Business Overview & Revenue Model

Company DescriptionGladstone Investment Corporation is business development company, specializes in lower middle market, mature stage, buyouts; refinancing existing debt; senior debt securities such as senior loans, senior term loans, lines of credit, and senior notes; senior subordinated debt securities such as senior subordinated loans and senior subordinated notes; junior subordinated debt securities such as subordinated notes and mezzanine loans; limited liability company interests, and warrants or options. The fund does not invest in start-ups. The fund seeks to invest in manufacturing, consumer products and business/consumer services sector. It seeks to invest in small and mid-sized companies based in the United States. The fund prefers to make debt investments between $5 million and $30 million and equity investments between $10 million and $40 million in companies. The fund seeks to invest in companies with revenue between $20 million and $100 million. The fund invests in companies with EBITDA from $3 million to $20 million. It seeks minority equity ownership and prefers to hold a board seat in its portfolio companies. It also prefers to take majority stake in its portfolio companies. The fund typically holds the investments for seven years and exits via sale or recapitalization, initial public offering, or sale to third party.
How the Company Makes MoneyGladstone Investment Corporation generates revenue through interest income from its debt investments and capital gains from its equity investments. The company primarily invests in secured first lien loans, second lien loans, and equity securities, targeting companies with strong management teams and growth potential. Additionally, GAIN may realize capital gains by exiting its equity investments when market conditions are favorable. The company also benefits from dividend income from its equity holdings. Significant partnerships with portfolio companies contribute to its earnings by enhancing the value of its investments through strategic guidance and operational support. Gladstone Investment's ability to effectively manage and grow its investment portfolio is crucial to maintaining its revenue streams.

Gladstone Investment Earnings Call Summary

Earnings Call Date:May 13, 2025
(Q4-2025)
|
% Change Since: 6.42%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with strong fiscal year performance, significant realized gains, and increased investment activity. However, there are some concerns regarding the slight decrease in portfolio value, ongoing non-accrual status of some portfolio companies, and exposure to tariff risks.
Q4-2025 Updates
Positive Updates
Strong Fiscal Year Performance
Gladstone Investment Corporation reported adjusted net investment income (NII) of $0.97 per share for the fiscal year, covering the $0.96 per share annual dividend. The total fair value of the portfolio increased to $979 million, up from $921 million at the prior year end.
Successful Exits and Realized Gains
The company successfully exited one of its portfolio companies, generating significant realized capital gains of $19.8 million.
Increased Investment Activity
For the year, Gladstone invested $221 million, up from $184 million in the prior year, including investments in four new portfolio companies.
Supplemental Distributions
Supplemental distributions of $1.66 per share were paid during the fiscal year, with an additional $0.54 per share declared post year-end.
Strong Investment Income Growth
Total investment income reached $93.7 million, up from $87.3 million in the prior year, driven by an increase in dividend and success fee income.
Strong Liquidity Position
Gladstone issued $126.5 million of publicly traded notes and completed an upsize of its credit facility to $270 million, with $214 million available.
Negative Updates
Slight Decrease in Portfolio Value
The portfolio value decreased slightly quarter-over-quarter from $1.1 billion, primarily due to exits and adjustments in valuation multiples.
Non-Accrual Status of Portfolio Companies
Four portfolio companies remain on non-accrual status, although improvements are noted in a few, with ongoing efforts to return them to accrual status.
Exposure to Tariff Risks
Concerns about tariff impacts on supply chains and customer demand were highlighted, with a specific focus on consumer-focused companies.
Company Guidance
During the fourth quarter and fiscal year ended March 31, 2025, Gladstone Investment Corporation reported positive financial performance, with an adjusted net investment income (NII) of $35.5 million, equating to $0.97 per share, thereby covering their annual dividend of $0.96 per share. The total fair value of their portfolio increased to $979 million, though it was slightly lower than the previous quarter's $1.1 billion. This discrepancy was due to a balance of new buyouts and the successful exit of a portfolio company, yielding significant realized capital gains of $19.8 million. Throughout the year, the company invested $221 million across four new portfolio companies and completed a dividend recap with Educators Resource. They maintained a monthly distribution of $0.08 per share and paid supplemental distributions totaling $1.66 per share for the year. Looking ahead, the management is cautiously optimistic about new acquisitions, despite economic uncertainties such as tariffs, and reported a net asset value (NAV) increase to $13.55 per share. The company ended the fiscal year with $55.3 million in spillover, sufficient for future distributions, and emphasized maintaining liquidity and flexibility to support portfolio growth.

Gladstone Investment Financial Statement Overview

Summary
Gladstone Investment shows strong long-term profitability and revenue growth, but recent volatility in revenue and increased leverage pose concerns. Cash flow management needs improvement despite transitioning to positive free cash flow.
Income Statement
65
Positive
Gladstone Investment has shown strong growth with a significant increase in total revenue from 2020 to 2025. The gross profit margin remains solid, reflecting effective cost management. However, the decline in total revenue between 2024 and 2025 suggests potential volatility. The consistent profitability, indicated by positive EBIT and net income, and high net profit margins are strong points. Yet, the revenue growth rate has fluctuated, indicating potential instability in revenue streams.
Balance Sheet
62
Positive
The company's balance sheet reflects a stable equity position with an increasing trend in stockholders' equity over the years. However, the debt-to-equity ratio has increased, highlighting a rise in leverage which could pose risks if not managed carefully. The equity ratio is stable, implying a balanced approach to financing, but the increasing debt levels require monitoring to avoid potential over-leverage.
Cash Flow
58
Neutral
Cash flow analysis shows a mixed picture, with fluctuations in operating cash flow and free cash flow over the years. The transition from negative to positive free cash flow in recent years is encouraging, but the inconsistency points to potential cash flow management issues. The operating cash flow to net income ratio indicates that the company is generating sufficient cash, but the variability suggests some operational cash challenges.
BreakdownMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue89.88M103.17M48.53M112.23M53.17M
Gross Profit61.63M79.05M32.66M99.15M48.73M
EBITDA65.32M85.31M35.55M102.32M42.45M
Net Income65.32M85.31M35.55M102.32M42.45M
Balance Sheet
Total Assets1.01B938.08M765.64M740.41M643.73M
Cash, Cash Equivalents and Short-Term Investments15.15M2.46M2.68M14.19M2.06M
Total Debt455.71M398.35M292.61M261.35M151.38M
Total Liabilities507.32M445.37M325.90M294.58M261.37M
Stockholders Equity499.08M492.71M439.74M445.83M382.36M
Cash Flow
Free Cash Flow16.31M-69.94M-4.50M36.60M-29.73M
Operating Cash Flow16.31M-69.94M-4.50M36.60M-29.73M
Investing Cash Flow-145.19M0.00-98.22M-42.72M-64.22M
Financing Cash Flow-4.37M69.91M-6.74M-24.50M28.07M

Gladstone Investment Technical Analysis

Technical Analysis Sentiment
Positive
Last Price14.26
Price Trends
50DMA
14.01
Positive
100DMA
13.37
Positive
200DMA
12.96
Positive
Market Momentum
MACD
0.06
Positive
RSI
57.90
Neutral
STOCH
43.81
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GAIN, the sentiment is Positive. The current price of 14.26 is above the 20-day moving average (MA) of 14.13, above the 50-day MA of 14.01, and above the 200-day MA of 12.96, indicating a bullish trend. The MACD of 0.06 indicates Positive momentum. The RSI at 57.90 is Neutral, neither overbought nor oversold. The STOCH value of 43.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GAIN.

Gladstone Investment Risk Analysis

Gladstone Investment disclosed 12 risk factors in its most recent earnings report. Gladstone Investment 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 Investment Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
$525.02M8.0213.17%6.75%33.42%-28.30%
70
Neutral
$645.56M7.4718.92%6.85%69.53%60.29%
68
Neutral
$16.73B11.759.79%3.76%11.87%-7.97%
61
Neutral
$542.95M10.966.70%11.47%12.83%-13.29%
58
Neutral
$527.49M15.47-1.88%14.21%2.30%-63.97%
53
Neutral
$456.46M28.033.05%11.91%1.13%-86.09%
48
Neutral
$472.74M49.431.95%13.26%-66.59%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GAIN
Gladstone Investment
14.10
2.10
17.50%
GLAD
Gladstone Capital
28.89
7.21
33.26%
PNNT
Pennantpark Investment
7.28
1.06
17.04%
CCAP
Crescent Capital BDC
14.49
-2.29
-13.65%
CION
CION Investment Corp
10.07
-0.56
-5.27%
PSBD
Palmer Square Capital BDC Inc.
14.10
-0.59
-4.02%

Gladstone Investment Corporate Events

DividendsFinancial Disclosures
Gladstone Investment Declares Monthly Cash Distributions
Positive
Jul 10, 2025

On July 10, 2025, Gladstone Investment Corporation announced that its board of directors declared monthly cash distributions of $0.08 per share for its common stockholders for July, August, and September 2025. Additionally, the company plans to report its earnings for the first fiscal quarter ended June 30, 2025, on August 12, 2025, followed by a conference call on August 13, 2025, to discuss the results. This announcement highlights the company’s ongoing commitment to providing returns to its shareholders and maintaining transparency with its financial performance.

The most recent analyst rating on (GAIN) stock is a Buy with a $14.50 price target. To see the full list of analyst forecasts on Gladstone Investment stock, see the GAIN Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
Gladstone Investment Updates Sales Agreements with M&T Securities
Neutral
Jun 3, 2025

On June 2, 2025, Gladstone Investment Corporation announced amendments to its sales agreements with several sales agents, including the addition of M&T Securities, Inc. as a new sales agent. These agreements allow for the issuance of up to $75 million of common stock, with M&T acting as a sales agent under mutually agreed terms and earning a commission of up to 2.0% on sales, while also being indemnified against certain liabilities.

The most recent analyst rating on (GAIN) stock is a Buy with a $14.00 price target. To see the full list of analyst forecasts on Gladstone Investment stock, see the GAIN Stock Forecast page.

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.Date of analysis: Jul 16, 2025