Gladstone Capital (GLAD)
NASDAQ:GLAD
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Gladstone Capital
(NASDAQ:GLAD)
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Rating:69Neutral
Price Target:
$22.00
â–²(14.46% Upside)
Action:Reiterated
Date:05/09/26
The score is held back primarily by weak and volatile cash flows despite strong reported margins and improved leverage. Valuation is a clear positive (low P/E and high yield), while technicals show constructive momentum. The latest earnings call supports stability via dividend coverage and modest growth guidance, tempered by yield pressure, higher costs, and a few non-earning/marked-down positions.
Positive Factors
Conservative portfolio mix
A first-lien weighted portfolio (~70% first-lien) materially reduces loss severity and improves recovery prospects versus unsecured or equity-heavy allocations. For a BDC focused on lower middle-market lending, this durable credit mix supports steadier interest income and better capital preservation across economic cycles, lowering downside volatility in NAV and distributions over the next several months.
Negative Factors
Weak cash generation
Sustained negative operating and free cash flow (~-$53.6M TTM) indicates a recurring gap between reported earnings and cash realizations. For a dividend-focused BDC that distributes most taxable income, persistent cash shortfalls increase reliance on borrowing, capital markets, or asset sales to fund distributions and new originations, raising structural funding and dividend sustainability risks.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative portfolio mix
A first-lien weighted portfolio (~70% first-lien) materially reduces loss severity and improves recovery prospects versus unsecured or equity-heavy allocations. For a BDC focused on lower middle-market lending, this durable credit mix supports steadier interest income and better capital preservation across economic cycles, lowering downside volatility in NAV and distributions over the next several months.
Read all positive factors
Gladstone Capital (GLAD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$428.14M
Dividend Yield9.31%
Average Volume (3M)184.32K
Price to Earnings (P/E)6.1
Beta (1Y)0.83
Revenue Growth-46.94%
EPS Growth-51.89%
CountryUS
Employees73
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)1.88
Shares Outstanding22,593,070
10 Day Avg. Volume164,626
30 Day Avg. Volume184,319
Financial Highlights & Ratios
PEG Ratio-0.21
Price to Book (P/B)1.01
Price to Sales (P/S)3.38
P/FCF Ratio11.21
Enterprise Value/Market Cap1.91
Enterprise Value/Revenue11.59
Enterprise Value/Gross Profit17.14
Enterprise Value/Ebitda16.21
Forecast
1Y Price Target
$22.00Price Target Upside14.46% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)1.97
Revenue Forecast (FY)$100.41M
Gladstone Capital Business Overview & Revenue Model
Company Description
Gladstone Capital Corporation is a business development company specializing in lower middle market, growth capital, add on acquisitions, change of control, buy & build strategies, debt refinancing, debt investments in senior term loans, revolving...
How the Company Makes Money
Gladstone Capital makes money primarily from investment income generated by its portfolio of loans and, secondarily, from gains and other income related to equity positions. The core revenue stream is interest income earned on debt investments—typ...
Gladstone Capital Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The quarter showed a number of substantive positives: NAV accretion, net investment income coverage of the dividend, a strong pipeline and fresh originations, substantial liquidity, and a conservative, first‑lien‑weighted portfolio with no software exposure. Offsetting items were modest: a small decline in interest income and portfolio yield due to lower short-term rates, higher operating costs, and three non‑earning positions marked down versus cost. Management’s forward commentary emphasized disciplined origination, stable spreads (~7%), and confidence in dividend coverage and growth opportunities in the lower middle market.Positive Updates
Stable Funding and New Originations
Fundings for the quarter totaled $44 million (3 new PE-sponsored investments of $34M plus $10M of add-ons). Since quarter-end the firm funded 2 new portfolio companies totaling $44 million of senior secured debt, supporting modest asset growth.
Negative Updates
Decline in Interest Income and Yield Pressure
Total interest income declined $700,000 (−2.9% QoQ) to $23.2 million, driven by a 30–40 basis point decline in short-term reference rates and a 40 bps decline in the weighted average yield to 11.8%.
Read all updates
Q2-2026 Updates
Positive
Negative
Stable Funding and New Originations
Fundings for the quarter totaled $44 million (3 new PE-sponsored investments of $34M plus $10M of add-ons). Since quarter-end the firm funded 2 new portfolio companies totaling $44 million of senior secured debt, supporting modest asset growth.
Read all positive updates
Company Guidance
Management guided to modest near-term asset growth supported by a healthy pipeline and a couple of expected near-term exits, noting last quarter fundings of $44M (3 PE‑sponsored deals totaling $34M plus $10M of add‑ons) versus $46M of exits/prepayments, and since quarter‑end they’ve funded two new companies with $44M of senior secured debt; they expect spreads to remain stable (closing spreads ~7% last quarter) and will lean on their $365M credit facility (borrowing availability >$150M) and floating‑rate bank facility to support floating‑rate assets and mitigate short‑term rate declines. Financial metrics cited to support the guidance include interest income of $23.2M (down $0.7M or 2.9%), weighted average debt yield 11.8% (down ~40 bps), other income $2.8M (up $2.2M), PIK income $1.7M (7.4% of interest income), net investment income $11.8M ($0.52/share), net portfolio appreciation $4.2M, total investments at fair value $907M (total assets $925M), net assets $483M with NAV per share up to $21.36 (gross leverage ~91.8% of net assets, net debt ~92% of NAV), and a monthly common distribution of $0.15 ($1.80 annual run rate, ~9.4% yield at a $19.21 share price).Gladstone Capital Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
68
Positive
Cash Flow
39
Negative
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 70.52M | 144.76M | 120.26M | 65.83M | 33.03M | 97.55M |
| Gross Profit | 47.70M | 126.33M | 98.55M | 44.98M | 20.06M | 86.04M |
| EBITDA | 50.46M | 122.28M | 94.72M | 42.67M | 19.91M | 84.30M |
| Net Income | 43.95M | 58.11M | 94.72M | 42.67M | 19.91M | 84.30M |
Balance Sheet | ||||||
| Total Assets | 925.07M | 907.60M | 812.47M | 719.50M | 660.97M | 566.50M |
| Cash, Cash Equivalents and Short-Term Investments | 3.39M | 32.37M | 2.17M | 1.31M | 2.01M | 671.00K |
| Total Debt | 392.92M | 397.86M | 324.61M | 300.91M | 339.41M | 237.11M |
| Total Liabilities | 442.46M | 425.56M | 333.73M | 310.80M | 345.48M | 248.06M |
| Stockholders Equity | 482.61M | 482.04M | 478.74M | 408.69M | 315.49M | 318.44M |
Cash Flow | ||||||
| Free Cash Flow | -53.56M | 43.63M | 3.24M | -10.86M | -76.40M | -14.06M |
| Operating Cash Flow | -53.56M | 43.63M | 3.24M | -10.86M | -76.40M | -14.06M |
| Investing Cash Flow | -39.91M | -49.12M | 0.00 | 0.00 | -259.05M | -165.99M |
| Financing Cash Flow | 94.07M | 35.55M | -2.34M | 10.15M | 77.66M | 12.44M |
Gladstone Capital Technical Analysis
Neutral
19.22
Price Trends
18.24
Positive
18.60
Positive
19.67
Negative
Market Momentum
0.19
Positive
51.72
Neutral
30.76
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GLAD, the sentiment is Neutral. The current price of 19.22 is above the 20-day moving average (MA) of 19.05, above the 50-day MA of 18.24, and below the 200-day MA of 19.67, indicating a neutral trend. The MACD of 0.19 indicates Positive momentum. The RSI at 51.72 is Neutral, neither overbought nor oversold. The STOCH value of 30.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GLAD.
Gladstone Capital Risk Analysis
Gladstone Capital disclosed 61 risk factors in its most recent earnings report. Gladstone 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
Gladstone Capital Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $428.14M | 6.11 | 9.10% | 9.31% | -46.94% | -51.89% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
59 Neutral | $633.17M | 2.98 | 34.04% | 11.02% | -54.43% | 163.70% | |
57 Neutral | $418.94M | -7.23 | 2.14% | 13.20% | -18.56% | -69.62% | |
54 Neutral | $312.96M | -4.67 | -19.08% | 21.13% | -153.69% | -168.78% | |
52 Neutral | $326.12M | -3.77 | -0.13% | 15.77% | -11.90% | 84.61% | |
50 Neutral | $248.13M | -30.83 | 0.01% | 16.61% | 122.81% | 43.00% |
* Financial Sector Average
GLAD
Gladstone Capital
18.95
-4.88
-20.48%
GAIN
Gladstone Investment
15.90
2.66
20.12%
PNNT
Pennantpark Investment
3.80
-1.78
-31.90%
TCPC
BlackRock TCP Capital
3.73
-2.74
-42.38%
CCAP
Crescent Capital BDC
11.37
-2.17
-16.01%
CION
CION Investment Corp
6.55
-1.50
-18.67%
Gladstone Capital Corporate Events
Business Operations and StrategyExecutive/Board Changes
Gladstone Capital Announces CEO Transition and Leadership Promotions
Positive
Mar 23, 2026
On March 20, 2026, Gladstone Capital executed a planned leadership transition in which founder David Gladstone stepped down as CEO while remaining chairman of the board, investment committee member, and head of the affiliated adviser. Robert Marco...
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.