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Great Elm Capital Corporation (GECC)
NASDAQ:GECC
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Great Elm Capital
(NASDAQ:GECC)
Rating:48Neutral
Price Target:―
Great Elm Capital (GECC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$122.83M
Dividend Yield13.35%
Average Volume (3M)22.18K
Price to Earnings (P/E)25.8
Beta (1Y)0.28
Revenue Growth32.38%
EPS Growth-90.38%
CountryUS
Employees1
SectorFinancial
Sector Strength81
IndustryAsset Management
Share Statistics
EPS (TTM)0.40
Shares Outstanding11,544,415
10 Day Avg. Volume18,262
30 Day Avg. Volume22,184
Financial Highlights & Ratios
PEG Ratio1.00
Price to Book (P/B)0.92
Price to Sales (P/S)0.00
P/FCF Ratio-4.40
Enterprise Value/Market Cap2.53
Enterprise Value/Revenue2.29
Enterprise Value/Gross Profit10.55
Enterprise Value/Ebitda8.62
Forecast
1Y Price Target
$11.00Price Target Upside2.90% Upside
Rating ConsensusHold
Number of Analyst Covering1
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 Earnings Call Summary
Earnings Call Date:May 05, 2025
(Q1-2025)
| % Change Since: 6.79%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call displayed a strong financial performance with record-breaking total investment income and significant growth in NII per share. However, concerns were noted regarding NAV decline due to market volatility and reduced asset coverage ratio. Despite these challenges, the company remains confident in its long-term growth strategy and ability to generate sustainable returns.Q1-2025 Updates
Positive Updates
Record-Breaking Total Investment Income
Achieved the highest total investment income in company history at $12.5 million, marking a 37% increase from the last quarter and over 40% year-over-year growth.
Net Investment Income Per Share Doubles
Net Investment Income (NII) per share doubled to $0.40 from $0.20 in the prior quarter, driven by increased total investment income and new investments.
Increased Distribution to Shareholders
First quarter distribution increased by 5.7% to $0.37 per share, with NII more than covering the distribution.
Strong Performance from CLO Joint Venture
Received $3.8 million in cash distributions from the CLO JV in Q1, up from $0.5 million in Q4 of 2024.
Debt and Portfolio Management
First-lien loans comprised 71% of the corporate portfolio, demonstrating a focus on secured income-generating assets.
Negative Updates
Net Asset Value Decline
Net Asset Value (NAV) per share decreased from $11.79 to $11.46, driven by unrealized losses on portfolio investments.
Volatility in Market Impact
Experienced markdowns on positions, specifically in CLO JV equity and investments in CoreWeave, due to market volatility.
Asset Coverage Ratio Drop
Asset coverage ratio decreased from 169.7% to 163.8%.
Minimal Cash Reserves
Cash reserves totaled approximately $1.3 million, indicating limited liquidity.
Company Guidance
In the first quarter of 2025, Great Elm Capital Corp. achieved its highest-ever total investment income of $12.5 million, marking a 37% increase from the previous quarter and over 40% growth year-over-year. The net investment income (NII) per share doubled to $0.40, up from $0.20 in the prior quarter, mainly due to the success of their CLO joint venture and new investments. The company's NII covered the first-quarter distribution of $0.37 per share, a 5.7% increase from the previous quarter. Despite a modest decrease in net asset value (NAV) per share, driven by unrealized losses on some portfolio investments, the company anticipates that second-quarter NII will surpass first-quarter levels. As of March 31, 2025, the company's net assets were $132 million, with an asset coverage ratio of 163.8% and total debt outstanding at $207 million. The company remains focused on enhancing portfolio quality and is optimistic about generating sustainable returns for shareholders.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 | ||||
| 30.77M | 31.54M | 35.83M | -16.07M | -6.59M | -28.86M | Gross Profit |
| 29.46M | 29.73M | 27.13M | -15.98M | -6.18M | -33.18M | EBIT |
| 23.19M | 28.35M | 24.57M | -15.33M | -10.23M | -31.94M | EBITDA |
| 16.81M | 28.35M | 0.00 | -15.33M | 17.31M | 17.04M | Net Income Common Stockholders |
| 4.46M | 3.55M | 25.33M | -15.58M | -10.28M | -31.96M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 54.80M | 0.00 | 953.00K | 587.00K | 9.13M | 52.58M | Total Assets |
| 257.11M | 342.03M | 246.82M | 310.11M | 426.31M | 283.33M | Total Debt |
| 75.77M | 189.69M | 140.21M | 153.15M | 142.00M | 115.66M | Net Debt |
| 69.74M | 189.69M | 139.26M | 152.56M | 132.87M | 63.08M | Total Liabilities |
| 131.52M | 205.91M | 148.09M | 225.30M | 351.76M | 203.71M | Stockholders Equity |
| 125.60M | 136.11M | 98.74M | 84.81M | 74.56M | 79.61M |
| Cash Flow | Free Cash Flow | ||||
| -27.69M | -82.67M | 25.68M | -41.76M | -58.49M | 27.39M | Operating Cash Flow |
| -27.69M | -82.67M | 25.68M | -41.76M | -58.49M | 27.39M | Investing Cash Flow |
| -88.38M | -93.66M | 0.00 | -36.47M | -56.88M | 19.47M | Financing Cash Flow |
| 64.11M | 81.72M | -25.32M | 33.20M | 14.45M | 21.19M |
Great Elm Capital Technical Analysis
Positive
10.69
Price Trends
10.18
Positive
10.29
Positive
9.85
Positive
Market Momentum
0.15
Positive
61.57
Neutral
75.66
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 10.69 is above the 20-day moving average (MA) of 10.51, above the 50-day MA of 10.18, and above the 200-day MA of 9.85, indicating a bullish trend. The MACD of 0.15 indicates Positive momentum. The RSI at 61.57 is Neutral, neither overbought nor oversold. The STOCH value of 75.66 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 | $113.48M | 3.76 | 19.56% | 16.06% | -49.04% | ― | |
69 Neutral | $138.01M | 19.60 | 3.63% | 15.77% | 127.09% | 2519.30% | |
64 Neutral | $12.67B | 9.74 | 7.58% | 17015.08% | 12.21% | -6.96% | |
52 Neutral | $46.67M | ― | -8.58% | 7.79% | 678.57% | 98.81% | |
48 Neutral | $122.83M | 25.78 | 3.56% | 13.35% | 32.38% | -90.38% | |
48 Neutral | $109.42M | 41.01 | -5.47% | 21.45% | -37.27% | -153.39% | |
45 Neutral | $150.26M | ― | -9.96% | ― | 90.08% | -893.47% |
* Financial Sector Average
Performance Comparison
GECC
Great Elm Capital
10.69
1.82
20.52%
PTMN
Portman Ridge Finance
11.89
-5.03
-29.73%
SSSS
SuRo Capital
6.59
2.42
58.03%
OFS
OFS Capital
8.45
0.25
3.05%
LRFC
Logan Ridge Finance
17.57
-3.47
-16.49%
MRCC
Monroe Capital
6.37
-0.23
-3.48%
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.