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Great Elm Capital Corp (GECC)
:GECC
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Great Elm Capital
(NASDAQ:GECC)
48Neutral
Great Elm Capital (GECC) vs. S&P 500 (SPY)
Market Cap
$116.51M
Dividend Yield14.07%
Average Volume (3M)22.08K
Price to Earnings (P/E)28.0
Beta (1Y)0.36
Revenue Growth32.38%
EPS Growth-90.38%
CountryUS
Employees1
SectorFinancial
Sector Strength88
IndustryAsset Management
Share Statistics
EPS (TTM)0.32
Shares Outstanding11,544,415
10 Day Avg. Volume13,235
30 Day Avg. Volume22,084
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap2.53
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit9.92
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$11.00Price Target Upside9.02% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
Great Elm Capital Business Overview & Revenue Model
Company DescriptionGreat 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 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 Financial Statement Overview
Summary
Great Elm Capital's financial performance shows improved revenue and operational efficiency, but there are significant challenges in profitability sustainability, asset management, and cash flow generation. The company must address its cash flow issues and strengthen its balance sheet to improve financial stability.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 | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 31.54M | 35.83M | -16.07M | -6.59M | -28.86M | Gross Profit |
| 29.73M | 27.13M | -15.98M | -6.18M | -33.18M | EBIT |
| 28.35M | 24.57M | -15.33M | -10.23M | -31.94M | EBITDA |
| 28.35M | 0.00 | -15.33M | 17.31M | 17.04M | Net Income Common Stockholders |
| 3.55M | 25.33M | -15.58M | -10.28M | -31.96M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 0.00 | 953.00K | 587.00K | 9.13M | 52.58M | Total Assets |
| 342.03M | 246.82M | 310.11M | 426.31M | 283.33M | Total Debt |
| 0.00 | 140.21M | 153.15M | 142.00M | 115.66M | Net Debt |
| 0.00 | 139.26M | 152.56M | 132.87M | 63.08M | Total Liabilities |
| 205.91M | 148.09M | 225.30M | 351.76M | 203.71M | Stockholders Equity |
| 15.33M | 98.74M | 84.81M | 74.56M | 79.61M |
| Cash Flow | Free Cash Flow | |||
| -82.67M | 25.68M | -41.76M | -58.49M | 27.39M | Operating Cash Flow |
| -82.67M | 25.68M | -41.76M | -58.49M | 27.39M | Investing Cash Flow |
| 0.00 | 0.00 | -36.47M | -56.88M | 19.47M | Financing Cash Flow |
| 81.72M | -25.32M | 33.20M | 14.45M | 21.19M |
Great Elm Capital Technical Analysis
Positive
10.09
Price Trends
10.18
Negative
10.17
Negative
9.76
Positive
Market Momentum
0.01
Negative
52.06
Neutral
54.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GECC, the sentiment is Positive. The current price of 10.09 is above the 20-day moving average (MA) of 9.86, below the 50-day MA of 10.18, and above the 200-day MA of 9.76, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 52.06 is Neutral, neither overbought nor oversold. The STOCH value of 54.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $117.37M | 4.13 | 19.56% | 15.53% | -32.33% | ― | |
69 Neutral | $152.10M | 15.67 | 4.91% | 14.24% | 127.09% | 2519.30% | |
64 Neutral | $12.64B | 9.74 | 8.05% | 17044.60% | 12.66% | -4.62% | |
52 Neutral | $47.75M | ― | -0.03% | 7.67% | 678.57% | 98.81% | |
48 Neutral | $116.51M | 27.96 | 3.03% | 14.07% | 32.38% | -90.38% | |
48 Neutral | $112.49M | 41.01 | -3.03% | 20.77% | -37.27% | -153.39% | |
45 Neutral | $114.46M | ― | -21.13% | ― | 90.08% | -893.47% |
* Financial Sector Average
Performance Comparison
GECC
Great Elm Capital
10.09
1.35
15.45%
PTMN
Portman Ridge Finance
12.23
-4.83
-28.31%
SSSS
SuRo Capital
4.86
1.07
28.23%
OFS
OFS Capital
8.76
0.54
6.57%
LRFC
Logan Ridge Finance
17.98
-2.85
-13.68%
MRCC
Monroe Capital
7.02
0.65
10.20%
Great Elm Capital Earnings Call Summary
Earnings Call Date:Mar 10, 2025
(Q4-2024)
| % Change Since: -0.79%|
Next Earnings Date:May 05, 2025
Earnings Call Sentiment Neutral
The earnings call revealed a mix of positive long-term strategic growth indicators, such as the increased dividend, market capitalization growth, and successful CLO joint ventures, against short-term challenges like the decline in net investment income and temporary impacts on earnings. The company appears optimistic about its ability to cover dividends and sustain growth, despite these challenges.Q4-2024 Updates
Positive Updates
Dividend Increase
The Board declared a 6% increase to the quarterly base dividend to $0.37 per share for the first quarter of 2025, up from $0.35, showcasing a commitment to delivering meaningful value to shareholders.
Market Capitalization Growth
GECC's market capitalization doubled from $60 million to over $120 million over 2023 and 2024, indicating strong growth.
Net Asset Value Growth
NAV per share increased by over $0.60, and total return on stock was nearly 80%, outperforming the Cliffwater and S&P BDC indices.
CLO Joint Venture
Executed a joint venture with a high-quality partner to invest in CLOs, improving long-term returns for shareholders.
Corporate Portfolio Growth
Corporate portfolio grew by 34% in 2024, holding $240 million of investments and increasing exposure to first lien loans.
Negative Updates
Net Investment Income Decline
NII was $2.1 million or $0.20 per share in Q4 2024, compared to $4.1 million or $0.39 per share in Q3 2024, driven by uneven cadence of initial CLO cash flows.
Temporary Income Impact
The fourth quarter was impacted by temporary items such as equity raises and the timing of closing the second CLO in the JV, leading to a step down in the overall portfolio yield.
NAV Per Share Decrease
NAV per share decreased to $11.79 as of December 31, 2024, from $12.04 as of September 30, reflecting short-term disruptions.
Company Guidance
During the Great Elm Capital Corporation's fourth quarter 2024 financial results call, CEO Matt Kaplan emphasized the company's strategic initiatives and financial performance. The company reported a net asset value (NAV) per share decrease to $11.79, impacted by uneven CLO distributions and refinancing charges. Despite this, Great Elm's market capitalization doubled to over $120 million, with a 30% cumulative return on NAV per share over two years. The company raised nearly $150 million in capital, increasing its corporate portfolio by 34% to $240 million, and declared a 6% dividend increase to $0.37 per share for Q1 2025. Great Elm's investment in CLOs is projected to yield high teens to 20% IRRs, and the company remains confident in covering its 2025 dividend and delivering attractive risk-adjusted returns for shareholders.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.