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Great Elm Capital Corporation (GECC)
NASDAQ:GECC
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Great Elm Capital
(NASDAQ:GECC)
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Rating:48Neutral
Price Target:―
Great Elm Capital Corporation's overall stock score reflects a blend of both strengths and challenges. Strong operational efficiency and a high dividend yield are counterbalanced by financial instability and liquidity concerns. Technical indicators and a positive earnings call sentiment offer some optimism, but the high P/E ratio and cash flow issues weigh on the score.
Positive Factors
Revenue Growth
Strong revenue growth indicates successful investment strategies and expanding market opportunities, enhancing long-term financial stability.
Dividend Increase
Increasing dividends reflect confidence in cash flow stability and commitment to returning value to shareholders, supporting long-term investor trust.
Corporate Portfolio Growth
Expanding the corporate portfolio enhances diversification and risk management, positioning the company for sustained growth and resilience.
Negative Factors
Financial Instability
High liabilities relative to equity indicate financial instability, potentially limiting flexibility and increasing vulnerability to economic downturns.
Negative Operating Cash Flow
Negative cash flow highlights liquidity challenges, which could hinder the company's ability to invest in growth opportunities and meet obligations.
Net Investment Income Decline
Declining net investment income suggests potential issues in income generation, affecting profitability and long-term financial health.
Great Elm Capital (GECC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$107.51M
Dividend Yield19.56%
Average Volume (3M)106.60K
Price to Earnings (P/E)―
Beta (1Y)0.36
Revenue Growth47.01%
EPS Growth-179.46%
CountryUS
Employees1
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)0.20
Shares Outstanding13,998,168
10 Day Avg. Volume72,492
30 Day Avg. Volume106,604
Financial Highlights & Ratios
PEG Ratio-0.34
Price to Book (P/B)0.79
Price to Sales (P/S)4.63
P/FCF Ratio-1.31
Enterprise Value/Market Cap2.18
Enterprise Value/Revenue5.04
Enterprise Value/Gross Profit1.32K
Enterprise Value/Ebitda-29.53
Forecast
1Y Price Target
$9.83Price Target Upside27.33% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)1.51
Revenue Forecast (FY)$50.70M
Great Elm Capital Business Overview & Revenue Model
Company DescriptionGreat Elm Capital (GECC) is a business development company that primarily invests in the debt securities of middle-market companies. Operating within the financial sector, GECC focuses on generating both current income and capital appreciation through its diversified portfolio. The company's investment strategy is centered around acquiring debt instruments that offer attractive risk-adjusted returns, thereby providing financial solutions to companies in need of capital.
How the Company Makes MoneyGreat Elm Capital makes money primarily through the interest and fees earned on its investments in debt securities. These investments include senior secured loans, bonds, and other fixed-income instruments that generate regular interest payments. Additionally, GECC may realize capital gains from the appreciation of these securities over time. The company also benefits from management and incentive fees from managed funds. Significant partnerships with financial institutions and strategic investments further enhance its revenue streams, allowing GECC to leverage its expertise in credit markets and expand its investment portfolio.
Great Elm Capital Earnings Call Summary
Earnings Call Date:Nov 04, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 26, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted successful capital-raising efforts, investment returns, and financing strategies. However, these positives were offset by significant negative impacts from the First Brands bankruptcy, decreased NII and NAV, and challenges with certain investments.Q3-2025 Updates
Positive Updates
Successful Capital Raising and Refinancing
Raised significant equity at NAV, doubled the size of the revolver, reduced the revolver's interest rate by 50 basis points, and refinanced the highest cost borrowing at 100 basis points lower.
Nice-Pak Investment Success
Achieved an approximately 38% IRR from a secured loan with warrants to Nice-Pak, acquired in the past quarter.
Strong Specialty Finance Performance
Great Elm Specialty Finance increased its distribution to GECC to $450,000 from $120,000 last quarter.
Dividend and Share Repurchase Approval
The Board approved a $0.37 dividend for Q4 2025 and a $10 million share repurchase program.
CoreWeave Capital Distributions
Received capital distributions totaling $2.9 million in Q3 and an additional $2.8 million in October, covering the original $6 million investment.
Negative Updates
Impact of First Brands Bankruptcy
First Brands filed for bankruptcy, adversely impacting NAV by approximately $16.5 million and putting loans on nonaccrual.
NII Decline
NII decreased to $0.20 per share from $0.51 in Q2, due to lower CLO JV distributions and elevated interest expense.
Decline in NAV Per Share
NAV per share declined from $12.10 to $10.01, primarily driven by unrealized losses from First Brands.
Insurance-Related Investment Nonpayment
Insurance-related investment did not pay a dividend in Q3 after paying $2.1 million in Q2.
Unrealized Decline in CW Opportunity 2 LP
The fair value of investment in CW Opportunity 2 LP experienced an unrealized decline as CoreWeave common stock fell approximately 16%.
Company Guidance
During the Great Elm Capital Corp. Third Quarter 2025 Financial Results Conference Call, the company provided several key metrics and updates. The net investment income (NII) for the third quarter was reported at $0.20 per share, a decrease from $0.51 in the second quarter, primarily due to lower distributions from their CLO JV and increased interest expenses. The net asset value (NAV) per share declined to $10.01 from $12.10, largely driven by a $16.5 million adverse impact from First Brands, which filed for bankruptcy. Despite these challenges, the company maintained a strong liquidity position with over $25 million in cash and $50 million available under its revolver. The Board approved a $0.37 dividend for the fourth quarter and announced a $10 million share repurchase program. Additionally, Great Elm highlighted the success of their investment in Nice-Pak, which generated a 38% internal rate of return (IRR). Looking ahead, the company anticipates a rebound in NII, bolstered by $4.3 million in CLO distributions received early in the fourth quarter and plans to harvest over $20 million from non-yielding assets to invest in cash-generating opportunities.Great Elm Capital Financial Statement Overview
Summary
Great Elm Capital's financial performance reflects a mix of progress and challenges. The income statement shows improvement in revenue and operational efficiency, but profitability is under pressure due to cost management issues. The balance sheet shows financial instability with liabilities exceeding equity and no debt. Cash flow is particularly concerning with a negative operating cash flow, highlighting liquidity issues.Income Statement
The income statement shows a positive turnaround in revenues, moving from negative to positive figures over the years, with a current revenue of $31.54 million in 2024. Gross profit margin is strong at 94.2% due to significant gross profit relative to revenue. However, net profit margin declined from last year, indicating potential cost management issues. Despite this, EBIT margin remains high at 89.9%, suggesting efficient operational performance.40
Negative
Balance Sheet
The balance sheet reveals a reduction in total assets and stockholders' equity, with total liabilities exceeding equity, resulting in a low equity ratio of 31.1%. The company has no debt, which is positive, but the overall financial stability is weakened by limited equity and asset base.30
Negative
Cash Flow
Cash flow analysis indicates a concerning negative operating cash flow of -$82.67 million, with no free cash flow generation. The free cash flow to net income ratio is negative due to substantial cash outflows, highlighting liquidity challenges.25
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 46.60M | 39.32M | 35.83M | 24.43M | 25.25M | 22.90M |
| Gross Profit | 178.00K | 10.00M | 31.83M | -14.76M | -5.09M | -27.71M |
| EBITDA | -7.95M | 3.55M | 25.33M | -15.58M | -10.28M | -31.96M |
| Net Income | -7.95M | 3.55M | 25.33M | -15.58M | -10.28M | -31.96M |
Balance Sheet | ||||||
| Total Assets | 420.05M | 342.03M | 246.82M | 310.11M | 426.31M | 283.33M |
| Cash, Cash Equivalents and Short-Term Investments | 88.70M | 8.45M | 953.00K | 587.00K | 9.13M | 52.58M |
| Total Debt | 200.19M | 189.69M | 140.21M | 153.15M | 142.00M | 115.66M |
| Total Liabilities | 279.95M | 205.91M | 148.09M | 225.30M | 351.76M | 203.71M |
| Stockholders Equity | 140.10M | 136.11M | 98.74M | 84.81M | 74.56M | 79.61M |
Cash Flow | ||||||
| Free Cash Flow | 43.65M | -82.67M | 15.39M | -41.76M | -58.49M | 27.39M |
| Operating Cash Flow | 43.65M | -82.67M | 15.39M | -41.76M | -58.49M | 27.39M |
| Investing Cash Flow | -85.95M | 0.00 | 14.77M | -36.47M | -56.88M | 19.47M |
| Financing Cash Flow | -10.33M | 81.72M | -25.32M | 33.20M | 14.45M | 21.19M |
Great Elm Capital Technical Analysis
Neutral
7.72
Price Trends
8.27
Negative
9.51
Negative
9.66
Negative
Market Momentum
-0.16
Negative
48.02
Neutral
61.14
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GECC, the sentiment is Neutral. The current price of 7.72 is above the 20-day moving average (MA) of 7.65, below the 50-day MA of 8.27, and below the 200-day MA of 9.66, indicating a neutral trend. The MACD of -0.16 indicates Negative momentum. The RSI at 48.02 is Neutral, neither overbought nor oversold. The STOCH value of 61.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GECC.
Great Elm Capital Risk Analysis
Great Elm Capital disclosed 65 risk factors in its most recent earnings report. Great Elm 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
Great Elm Capital Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $65.65M | 20.32 | 2.25% | 22.78% | -14.76% | ― | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | $167.35M | 16.97 | 3.51% | 23.33% | -55.82% | -4.97% | |
54 Neutral | $139.10M | ― | -2.25% | 15.58% | -34.92% | -132.22% | |
48 Neutral | $107.51M | ― | -5.98% | 19.56% | 47.01% | -179.46% | |
48 Neutral | $151.09M | ― | -1.61% | 22.70% | -177.91% | 55.08% |
* Financial Sector Average
GECC
Great Elm Capital
7.72
-1.32
-14.60%
OXSQ
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1.85
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-17.04%
WHF
WhiteHorse
7.27
-1.63
-18.31%
OFS
OFS Capital
4.75
-2.35
-33.10%
MRCC
Monroe Capital
6.42
-1.13
-14.97%
NXDT
NexPoint Diversified Real Estate Trust
2.89
-1.92
-39.92%
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.