Great Elm Capital (GECC) AI Stock Analysis

• Market Cap: $68.59M
• Dividend Yield: 22.43%
• Average Volume (3M): 127.52K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.51
• Revenue Growth: 47.01%
• EPS Growth: -179.46%
• Country: US
• Employees: 1
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 0.31
• Shares Outstanding: 13,998,168
• 10 Day Avg. Volume: 211,577
• 30 Day Avg. Volume: 127,522
• PEG Ratio: <0.01
• Price to Book (P/B): 0.77
• Price to Sales (P/S): 1.96
• P/FCF Ratio: -30.96
• Enterprise Value/Market Cap: 3.56
• Enterprise Value/Revenue: 5.58
• Enterprise Value/Gross Profit: 8.69
• Enterprise Value/Ebitda: -19.05
• 1Y Price Target: $5.50
• Price Target Upside: 12.24% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): 1.27
• Revenue Forecast (FY): $51.99M

• Rating: 49 Neutral
• Price Target: $5.00 ▲(2.04% Upside)
• Action: Reiterated Date: 03/03/26
• Date: Action: Reiterated 03/03/26

The score is held back primarily by weak and unreliable cash flow and high volatility in reported results, alongside a bearish technical trend (price below major moving averages and negative MACD). These are partially offset by income appeal from the very high dividend yield and a cautiously constructive earnings update (rising NII and active de-risking), though the material NAV decline remains a significant overhang.

Positive Factors

Net investment income recovery

A sustained rebound in cash income is critical for a BDC's business model. Q4 NII rising >50% QoQ indicates improving cash generation from core loan and CLO income streams, which supports distributable earnings, reduces reliance on asset sales, and underpins durable ability to cover dividends over coming quarters.

Low credit stress in portfolio

Very low nonaccruals signal portfolio credit quality and effective workout/underwriting. For an income-driven BDC, limited nonperforming loans reduces downside risk to yields and NAV, helps stabilize cash flows, and makes future recoveries and selective deployment less likely to produce large unexpected losses.

Management alignment and active de‑risking

An incentive‑fee waiver and active balance‑sheet actions show governance focused on capital preservation. Fee alignment, note repurchases and portfolio reductions reflect proactive capital allocation and risk management, improving investor alignment and increasing the odds of methodical NAV recovery over multiple quarters.

Negative Factors

Material NAV decline

A near‑20% quarter loss in NAV demonstrates sensitivity to mark‑to‑market swings and realized restructuring losses. For a BDC, large NAV volatility undermines capital stability, pressures payout sustainability, and signals that portfolio marks and stressed positions remain key ongoing risks to shareholder value over the medium term.

Weak, inconsistent cash generation

Repeated negative operating cash flow indicates earnings do not reliably convert to cash, forcing reliance on financings, asset sales or capital structure changes. That pattern reduces resilience to stress, limits sustainable dividend funding, and constrains organic deployment capacity across the next several quarters.

Balance‑sheet volatility and leverage questions

Large swings in leverage and a sudden shift to minimal reported debt create uncertainty about funding strategy and sustainability. Volatile balance‑sheet metrics can impair consistent access to capital, complicate long‑term deployment plans, and heighten execution risk when markets are dislocated over the next several months.

Great Elm Capital Business Overview & Revenue Model

Company Description

Great Elm Capital Corp. is a business development company which specializes in loan and mezzanine, middle market investments. It invests in the debt instruments of middle market companies. The fund prefers to invest in media, commercial services and supplies, healthcare, telecommunication services, communications equipment. It typically makes equity investments between $3 million and $10 million in companies with revenues between $3 million and $75 million.

How the Company Makes Money

GECC makes money primarily from investment income earned on its portfolio. The main revenue stream is interest income from debt investments (e.g., first-lien and other loans) made to portfolio companies; this includes interest accrued at stated coupon rates and may include income from original issue discount (OID), payment-in-kind (PIK) interest (when applicable), and other loan-related yield components, if present in specific investments. GECC can also earn fee income associated with its lending activities (such as origination, structuring, amendment, or commitment fees) when these are charged to borrowers. A secondary source of earnings is net realized gains (and, under accounting rules, changes in unrealized appreciation/depreciation) from equity or equity-linked positions and from the sale or repayment of investments above cost, though these items can be volatile and are not guaranteed. As a BDC, GECC’s net investment income and realized gains—after operating expenses, borrowing costs, and any management and incentive fees paid under its advisory arrangement—support its ability to pay distributions to shareholders. Specific material partnerships, named counterparties, or contract terms driving earnings are null.

Great Elm Capital Financial Statement Overview

Summary

Financial quality is constrained by weak and inconsistent cash generation (operating cash flow negative in multiple years, including 2024–2025, and free cash flow deteriorated sharply into 2025). Profitability has improved versus earlier loss years, but revenue and margins are volatile (notably a sharp revenue decline in 2025). Balance sheet metrics show a mixed picture: prior leverage was elevated, and while 2025 shows a notable deleveraging shift, the year-over-year change raises sustainability/stability questions.

Income Statement

Profitability has improved materially versus earlier loss years (2020–2022), with strong reported margins in 2023 and 2025. However, results are volatile: revenue swung from strong growth in 2023 to a sharp decline in 2025 (annual revenue down ~41%), and profitability/margins have not been consistent year-to-year (notably much lower in 2024). Overall, the income statement shows a return to profitability but with elevated earnings and revenue variability.

Balance Sheet

Leverage has been a key constraint historically, with debt-to-equity around ~1.4–1.9 in 2021–2024, which limits flexibility in weaker periods. Equity and assets have also moved meaningfully over time, reinforcing balance-sheet volatility. 2025 shows zero debt and a very high return on equity, which is a notable positive shift, but given the sharp year-over-year change versus prior years, balance-sheet stability and sustainability remain the main watch items.

Cash Flow

Cash generation is inconsistent and skews weak: operating cash flow was deeply negative in 2021, 2022, and especially 2024, and remained negative in 2025, despite net income being positive in those years. While 2023 and 2020 showed positive operating cash flow, the overall pattern suggests earnings quality and cash conversion are not reliable. Free cash flow also deteriorated sharply into 2025 (down ~106% year over year).

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	44.48M	39.32M	35.83M	24.43M	25.25M
Gross Profit	34.00M	10.00M	31.83M	-14.76M	-5.09M
EBITDA	-12.80M	3.55M	25.33M	-15.58M	-10.28M
Net Income	-31.79M	3.55M	25.33M	-15.58M	-10.28M
Balance Sheet
Total Assets	340.77M	342.03M	246.82M	310.11M	426.31M
Cash, Cash Equivalents and Short-Term Investments	34.64M	8.45M	953.00K	587.00K	9.13M
Total Debt	189.32M	189.69M	140.21M	153.15M	142.00M
Total Liabilities	227.83M	205.91M	148.09M	225.30M	351.76M
Stockholders Equity	112.95M	136.11M	98.74M	84.81M	74.56M
Cash Flow
Free Cash Flow	-2.81M	-82.67M	15.39M	-41.76M	-58.49M
Operating Cash Flow	-2.81M	-82.67M	15.39M	-41.76M	-58.49M
Investing Cash Flow	-22.07M	0.00	14.77M	-36.47M	-56.88M
Financing Cash Flow	4.65M	81.72M	-25.32M	33.20M	14.45M

Great Elm Capital Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.90
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GECC, the sentiment is Negative. The current price of 4.9 is below the 20-day moving average (MA) of 5.41, below the 50-day MA of 6.07, and below the 200-day MA of 7.77, indicating a bearish trend. The MACD of -0.36 indicates Positive momentum. The RSI at 29.42 is Positive, neither overbought nor oversold. The STOCH value of 24.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GECC.

Great Elm Capital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
WHF	63 Neutral	$156.75M	11.23	5.30%	21.24%	-55.82%	-4.97%
MRCC	59 Neutral	$99.45M	12.10	-2.90%	14.03%	-34.92%	-132.22%
OFS	56 Neutral	$37.51M	-1.93	-23.38%	25.87%	-14.76%	―
GECC	49 Neutral	$68.59M	-2.74	-24.20%	22.43%	47.01%	-179.46%
OXSQ	46 Neutral	$148.77M	-7.18	-12.27%	24.14%	-177.91%	55.08%

Great Elm Capital Corporate Events

Great Elm Capital Announces Partial Redemption of 2026 Notes

On February 27, 2026, Great Elm Capital Corp. notified holders of its 5.875% Notes due 2026 that it will redeem $20 million aggregate principal amount of these notes on March 31, 2026 at par, or $25 per note, plus any accrued and unpaid interest through but excluding the redemption date. Interest from December 31, 2025 to March 31, 2026 will be paid to holders of record as of March 15, 2026, after which the notes being redeemed will cease to accrue interest, narrowing investors’ opportunity to capture the final interest payment and modestly reducing the company’s outstanding debt obligations.

On the redemption date, holders must present and surrender their notes to Equiniti Trust Company, acting as trustee and paying agent, to receive the redemption price, with book-entry positions processed via standard Depository Trust Company procedures. The partial retirement of this 5.875% issue may slightly lower Great Elm Capital’s interest expense and adjust the duration profile of its liabilities, while investors who acquire the notes after the March 15, 2026 record date will not be entitled to the final accrued interest payment, affecting secondary market pricing and yield calculations.

The most recent analyst rating on (GECC) stock is a Hold with a $7.00 price target. To see the full list of analyst forecasts on Great Elm Capital stock, see the GECC Stock Forecast page.