Great Elm Group (GEG) AI Stock Analysis

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Great Elm Group

(NASDAQ:GEG)

Rating:55Neutral

Price Target:

$2.00

▼(-8.26% Downside)

Great Elm Group's overall stock score is influenced primarily by its financial struggles, highlighted by continuous net losses and cash flow challenges. However, positive signs from technical indicators, a strategic partnership, and optimistic earnings call guidance provide some support. The company's valuation remains unattractive due to negative profitability metrics. The most significant factors affecting the score are financial performance and valuation concerns.

Great Elm Group (GEG) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$60.07M

Dividend YieldN/A

Average Volume (3M)5.33K

Price to Earnings (P/E)―

Beta (1Y)-0.06

Revenue Growth64.34%

EPS Growth70.95%

CountryUS

Employees31

SectorFinancial

Sector Strength67

IndustryMedical - Distribution

Share Statistics

EPS (TTM)-0.17

Shares Outstanding27,940,475

10 Day Avg. Volume3,675

30 Day Avg. Volume5,332

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap0.48

Enterprise Value/Revenue1.47

Enterprise Value/Gross Profit4.38

Enterprise Value/Ebitda10.68

Forecast

1Y Price Target

$2.00

Price Target Upside-8.26% Downside

Rating ConsensusHold

Number of Analyst Covering0

Great Elm Group Business Overview & Revenue Model

Company DescriptionGreat Elm Group, Inc. engages in the durable medical equipment and investment management businesses. The company distributes respiratory care equipment, including positive air pressure equipment and supplies, ventilators and oxygen equipment, and replacement parts, as well as provides sleep study services; and rents medical equipment. It also offers investment management services. The company was formerly known as Great Elm Capital Group, Inc. and changed its name to Great Elm Group, Inc. in December 2020. Great Elm Group, Inc. was founded in 1994 and is headquartered in Waltham, Massachusetts.

How the Company Makes MoneyGreat Elm Group makes money through a combination of its operating subsidiaries and investment activities. In the healthcare sector, the company generates revenue primarily from its durable medical equipment business, which involves the sale or rental of respiratory-related products and services to patients, insurers, and healthcare providers. In addition, GEG earns income through its investment management division by managing assets for third-party clients and collecting management and performance-based fees. The company's diverse revenue streams are supported by strategic acquisitions and partnerships, which enhance its market position and operational capabilities.

Great Elm Group Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q3-2025)

% Change Since: 13.54%|

Next Earnings Date:Sep 17, 2025

Earnings Call Sentiment Positive

The earnings call presented a generally positive outlook for Great Elm Group, highlighted by significant growth in assets under management, increased revenues, and strategic acquisitions. However, the net loss and decrease in adjusted EBITDA due to market volatility present challenges that the company expects to overcome as conditions stabilize.

Q3-2025 Updates

Positive Updates

Growth in Assets Under Management

Fee-paying AUM increased by 15% year-over-year, reaching approximately $565 million, driven by Great Elm Capital Corp.'s equity and debt issuances.

Revenue Increase

Total revenue for the fiscal third quarter grew 15% year-over-year to $3.2 million, primarily due to increased revenues from real estate project management fees and rental income.

Strategic Acquisition and Expansion

Launched Monomoy Construction Services by acquiring Greenfield CRE, enhancing the real estate platform and creating revenue and operational synergies.

Strong Cash Position

Ended the quarter with approximately $32 million in cash, positioning the company well for future growth and investment opportunities.

GECC Performance

GECC generated record total investment income of $12.5 million in Q1 2025, supported by strong cash flows from its CLO JV, and increased base management fees by over 40% year-over-year.

Share Buyback Program

Repurchased approximately 4.8 million shares for $8.7 million at an average cost of $1.84 per share, a 15% discount to the quarter-end book value per share of $2.14.

Negative Updates

Net Loss for the Quarter

Reported a net loss of $4.5 million for the quarter, primarily driven by unrealized losses related to investments in CoreWeave and GECC shares due to broader market volatility.

Decrease in Adjusted EBITDA

Adjusted EBITDA decreased to $0.5 million from $1.2 million in the prior year period.

Company Guidance

During the Great Elm Group's Fiscal 2025 Third Quarter Conference Call, significant metrics highlighted included a 15% year-over-year increase in fee-paying assets under management (AUM), reaching approximately $565 million, primarily driven by Great Elm Capital Corp. (GECC), which raised about $147 million through equity and debt issuances. The company's total revenue grew by 15% to $3.2 million, and base management fees from GECC increased by over 40% to $1.3 million. The firm reported a net loss of $4.5 million for the quarter, attributed mainly to unrealized losses in investments, yet maintained a strong cash position with approximately $32 million. Furthermore, the company executed a $20 million share buyback program, repurchasing roughly 4.8 million shares at an average cost of $1.84 each, representing a 15% discount to the quarter-end book value per share of $2.14.

Great Elm Group Financial Statement Overview

Summary

Great Elm Group is experiencing financial difficulties with declining revenues and continuous net losses impacting its income statement. The balance sheet provides moderate stability due to reasonable equity levels but is hampered by negative returns. Cash flow challenges persist, although there are signs of incremental improvements.

Income Statement

Neutral

The income statement reveals a struggling performance with declining total revenues in the TTM, down from previous years. Gross Profit Margin stands at a modest 33.5%, signaling some ability to manage costs relative to revenue. However, the Net Profit Margin is negative due to continuous net losses, indicating poor bottom-line profitability. The negative EBIT and EBITDA margins further highlight operational inefficiencies.

Balance Sheet

Neutral

The balance sheet presents a mixed picture. The Debt-to-Equity ratio is 0.66, indicating a moderate level of leverage. The Return on Equity (ROE) is negative due to net losses, raising concerns about shareholder value creation. However, the Equity Ratio stands at 41.7%, suggesting a reasonable level of equity to support assets, which provides some financial stability.

Cash Flow

Negative

Cash flow analysis shows a negative free cash flow in the TTM, reflecting challenges in generating cash after capital expenditures. The Operating Cash Flow to Net Income ratio is negative, indicating cash outflows in operations. However, improvements in free cash flow compared to previous periods suggest some attempts at better cash management.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	17.83M	8.66M	67.97M	60.85M	64.10M
Gross Profit	977.00K	-1.53M	4.27M	4.61M	11.37M
EBITDA	4.60M	21.91M	-13.15M	6.77M	2.06M
Net Income	-1.39M	27.73M	-15.04M	-9.33M	-13.13M
Balance Sheet
Total Assets	140.45M	135.89M	168.09M	161.87M	195.44M
Cash, Cash Equivalents and Short-Term Investments	116.50M	117.37M	73.43M	74.92M	49.22M
Total Debt	61.18M	63.44M	73.92M	29.61M	112.26M
Total Liabilities	70.25M	72.05M	125.83M	97.96M	130.76M
Stockholders Equity	62.71M	63.84M	33.50M	54.36M	60.79M
Cash Flow
Free Cash Flow	-15.55M	-2.43M	22.73M	-25.95M	4.54M
Operating Cash Flow	-15.55M	-2.37M	29.28M	-18.98M	13.39M
Investing Cash Flow	2.27M	83.96M	-40.05M	-15.48M	-6.63M
Financing Cash Flow	2.84M	-47.62M	9.98M	18.34M	21.78M

Great Elm Group Technical Analysis

Technical Analysis Sentiment

Positive

Last Price2.18

Price Trends

50DMA

2.13

Positive

100DMA

2.03

Positive

200DMA

1.92

Positive

Market Momentum

MACD

0.01

Negative

RSI

57.06

Neutral

STOCH

80.79

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GEG, the sentiment is Positive. The current price of 2.18 is above the 20-day moving average (MA) of 2.12, above the 50-day MA of 2.13, and above the 200-day MA of 1.92, indicating a bullish trend. The MACD of 0.01 indicates Negative momentum. The RSI at 57.06 is Neutral, neither overbought nor oversold. The STOCH value of 80.79 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GEG.

Great Elm Group Risk Analysis

Great Elm Group disclosed 23 risk factors in its most recent earnings report. Great Elm Group 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 1 New Risks

The replacement of the London Interbank Offered Rate (LIBOR) with the Secured Overnight Financing Rate (SOFR) may affect the funds we manage and our results of operations and financial results. Q2, 2023

Great Elm Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (67)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	67 Neutral	$17.02B	11.60	9.79%	3.95%	10.61%	2.06%
GEG	55 Neutral	$60.07M	―	-2.28%	―	64.34%	70.95%
RDGT	49 Neutral	$6.87M	―	-6.45%	―	-22.37%	63.14%
SNYR	47 Neutral	$33.44M	3.24	-23.21%	―	―	―
OMI	44 Neutral	$498.76M	―	-49.91%	―	2.84%	-828.91%
ZYXI	43 Neutral	$47.26M	24.14	-168.22%	―	-25.21%	-631.48%

* Financial Sector Average

Performance Comparison

GEG

Great Elm Group

2.18

0.40

22.47%

RDGT

Ridgetech

1.24

-0.84

-40.38%

OMI

Owens & Minor

6.31

-9.00

-58.79%

ZYXI

Zynex

1.47

-6.37

-81.25%

SNYR

Synergy CHC

3.63

3.27

908.33%

Great Elm Group Corporate Events

Executive/Board ChangesPrivate Placements and FinancingBusiness Operations and Strategy

Great Elm Group Partners with KLIM for Expansion

Positive

Jul 31, 2025

On July 31, 2025, Great Elm Group entered a strategic partnership with Kennedy Lewis Investment Management (KLIM), involving the sale of 4.9% of its common stock and a $150 million debt investment to expand its industrial real estate platform. This partnership enhances Great Elm’s financial position, allowing for refinancing and new acquisitions, and strengthens its market position by consolidating its real estate assets under Great Elm Real Estate Ventures, LLC. The collaboration also includes board appointments from KLIM, highlighting a long-term commitment to the partnership.

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: Aug 01, 2025