Gladstone Capital (GLAD) AI Stock Analysis

• Market Cap: $398.77M
• Dividend Yield: 9.31%
• Average Volume (3M): 229.27K
• Price to Earnings (P/E): 19.7
• Beta (1Y): 0.69
• Revenue Growth: 41.12%
• EPS Growth: -40.68%
• Country: US
• Employees: 73
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 0.50
• Shares Outstanding: 22,593,070
• 10 Day Avg. Volume: 269,933
• 30 Day Avg. Volume: 229,272
• PEG Ratio: -0.21
• Price to Book (P/B): 1.01
• Price to Sales (P/S): 3.38
• P/FCF Ratio: 11.21
• Enterprise Value/Market Cap: 2.01
• Enterprise Value/Revenue: 13.67
• Enterprise Value/Gross Profit: 21.41
• Enterprise Value/Ebitda: 21.70
• 1Y Price Target: $21.67
• Price Target Upside: 22.78% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 1.95
• Revenue Forecast (FY): $100.88M

• Rating: 56 Neutral
• Price Target: $18.00 ▲(1.98% Upside)
• Action: Reiterated Date: 03/23/26
• Date: Action: Reiterated 03/23/26

The score is held back mainly by weak/volatile cash flow and bearish technical trends (price below key moving averages with negative MACD). These are partially offset by very strong reported profitability, a high dividend yield, and a generally stable earnings-call outlook supported by liquidity and pipeline commentary, though elevated leverage and credit marks remain notable risks.

Positive Factors

High Profitability / Margins

Persistently high reported net margins indicate the BDC captures attractive spreads on lower middle‑market debt and generates recurring investment income. Durable margin strength supports dividend capacity and provides a buffer to absorb some credit impairments, helping long‑term cash returns if portfolio yields hold.

Strong Liquidity and Funding Availability

A sizable revolver and meaningful availability provide structural funding flexibility for originations, absorbing prepayments and smoothing cash shortfalls. This reduces near‑term refinancing risk, enables opportunistic lending to vetted deals, and supports sustaining distributions through funding cycles.

Planned Leadership Succession / Bench Strength

A planned succession separating chairman and CEO with long‑tenured insiders promoted preserves institutional knowledge and investment committee continuity. This reduces key‑person risk and supports consistent underwriting and portfolio oversight, aiding strategic stability over the medium term.

Negative Factors

Volatile Operating Cash Flow

Large, unpredictable operating cash flow swings weaken the reliability of cash available for dividends and debt servicing. For a leveraged BDC, inconsistent cash generation increases reliance on debt and revolver usage, raising refinancing and liquidity strain risk during downturns or slower exit cycles.

Elevated Leverage

High leverage amplifies downside from credit losses and interest‑rate shifts, constraining strategic flexibility. With leverage near parity with equity, meaningful portfolio mark downs or yield compression could quickly erode NAV and force greater reliance on the revolver or asset sales to maintain distributions.

Concentrated Unrealized Losses / Credit Stress

Concentration of unrealized losses and several non‑accrual or stressed credits signal pockets of credit deterioration that may become realized losses. Concentrated credit risk requires remediation and limits portfolio diversification benefits, potentially pressuring NAV and future income generation if recoveries underperform.

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 loans, secured first and second lien term loans, senior subordinated loans, unitranche loans, junior subordinated loans, and mezzanine loans and equity investments in the form of common stock, preferred stock, limited liability company interests, or warrants. It operates as a business development company. The fund also makes private equity investments in acquisitions, buyouts and recapitalizations, and refinancing existing debts. It targets small and medium-sized companies in United States. It is industry agnostic and seeks to invest in companies engaged in the business services, light and specialty manufacturing, niche industrial products and services, specialty consumer products and services, energy services, transportation and logistics, healthcare and education services, specialty chemicals, media and communications and aerospace and defense. The fund seeks to invest between $7 million and $30 million in companies that have between $20 million and $150 million in sales and EBITDA between $3 million and $25 million. It prefers to acquire minority stakes. It seeks to exit its investments through strategic acquisitions by other industry participants or financial buyers, initial public offerings of common stock, or other capital market transactions.

How the Company Makes Money

GLAD makes money primarily from investment income generated by its portfolio of loans and related investments in lower middle-market companies. Key revenue streams: 1) Interest income on debt investments: The largest source of earnings is interest collected on its debt portfolio (typically senior secured and subordinated loans). These loans generally pay periodic cash interest; to the extent loans include floating-rate terms, interest income varies with benchmark rates. 2) Fee income related to lending: In connection with originating and maintaining loans, GLAD may earn fees such as origination/closing fees, amendment/consent fees, and other transaction-related charges, which contribute to investment income. 3) Income from equity and equity-linked investments: When GLAD receives equity co-investments, warrants, or other equity-linked features alongside a loan, it can earn dividends (if applicable) and realize gains if those positions are sold or the borrower is acquired/recapitalized. 4) Realized gains (and losses) on exits or repayments: GLAD can generate realized capital gains when portfolio companies repay debt at premiums, when equity/warrants are monetized, or when investments are sold; conversely, credit losses reduce earnings. Other factors affecting earnings: - Credit performance and portfolio valuations: Non-accruals, restructurings, and changes in fair value of investments can materially affect results. - Financing spread management: As a leveraged investment company, GLAD’s net investment income depends on the spread between yields earned on its portfolio and its own borrowing costs. Significant partnerships: null

Gladstone Capital Financial Statement Overview

Summary

Income statement profitability is very strong (high net margins) and leverage has improved versus earlier periods, but cash generation is highly volatile with recent TTM operating/free cash flow deeply negative. Revenue growth is also inconsistent, including a TTM decline, which lowers overall financial quality.

Income Statement

Profitability is strong on the face of the income statement, with very high margins across the period and solid earnings generation (TTM (Trailing-Twelve-Months) net margin ~75%; FY2024 net margin ~79%). Revenue growth, however, is volatile—strong expansion in FY2023–FY2024, modest growth in FY2025 annual data, then a decline in TTM (Trailing-Twelve-Months) revenue (about -13%). Overall, GLAD shows attractive profitability but a less consistent growth trajectory.

Balance Sheet

Leverage looks manageable but meaningful for the business model, with debt-to-equity around ~0.83 in the most recent periods (improved from ~1.08 in FY2022). Equity and assets have generally grown over time, supporting balance-sheet scale. Returns on equity are positive and decent (roughly low-teens recently, higher in FY2021–FY2024), but leverage remains a key risk factor if earnings or portfolio performance weakens.

Cash Flow

Cash generation is the weak spot. Operating and free cash flow swing materially, including large negatives in FY2021, FY2022, FY2023, and again in TTM (Trailing-Twelve-Months) (operating cash flow about -$71.5M). While FY2025 annual data shows strong positive operating cash flow (~$43.6M), the overall pattern is inconsistent, and recent TTM (Trailing-Twelve-Months) negative cash flow raises concerns about cash earnings quality and funding needs during weaker periods.

Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	58.56M	144.76M	120.26M	65.83M	33.03M	97.55M
Gross Profit	37.39M	126.33M	98.55M	44.98M	20.06M	86.04M
EBITDA	36.89M	122.28M	94.72M	42.67M	19.91M	84.30M
Net Income	36.89M	58.11M	94.72M	42.67M	19.91M	84.30M
Balance Sheet
Total Assets	922.81M	907.60M	812.47M	719.50M	660.97M	566.50M
Cash, Cash Equivalents and Short-Term Investments	4.17M	32.37M	2.17M	1.31M	2.01M	671.00K
Total Debt	405.90M	397.86M	324.61M	300.91M	339.41M	237.11M
Total Liabilities	416.34M	425.56M	333.73M	310.80M	345.48M	248.06M
Stockholders Equity	506.47M	482.04M	478.74M	408.69M	315.49M	318.44M
Cash Flow
Free Cash Flow	-22.98M	43.63M	3.24M	-10.86M	-76.40M	-14.06M
Operating Cash Flow	-22.98M	43.63M	3.24M	-10.86M	-76.40M	-14.06M
Investing Cash Flow	-40.31M	-49.12M	0.00	0.00	-259.05M	-165.99M
Financing Cash Flow	65.58M	35.55M	-2.34M	10.15M	77.66M	12.44M

Gladstone Capital Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 17.65
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GLAD, the sentiment is Negative. The current price of 17.65 is below the 20-day moving average (MA) of 18.12, below the 50-day MA of 19.13, and below the 200-day MA of 21.72, indicating a bearish trend. The MACD of -0.34 indicates Negative momentum. The RSI at 36.62 is Neutral, neither overbought nor oversold. The STOCH value of 48.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GLAD.

Gladstone 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%
GAIN	64 Neutral	$567.46M	2.10	24.70%	11.02%	-45.46%	134.73%
PNNT	59 Neutral	$295.14M	10.64	5.42%	16.61%	-3.09%	200.66%
CCAP	58 Neutral	$480.36M	15.08	4.81%	13.20%	-20.18%	-61.90%
GLAD	56 Neutral	$398.77M	19.71	7.50%	9.31%	41.12%	-40.68%
TCPC	53 Neutral	$312.02M	-5.23	-12.44%	21.13%	-91.81%	78.46%
CION	53 Neutral	$348.93M	-24.53	-3.58%	15.77%	-11.01%	-65.56%

Gladstone Capital Corporate Events

Gladstone Capital Announces CEO Transition and Leadership Promotions

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 Marcotte, president since 2013, was appointed CEO effective the same day, with longtime investment executive John Sateri named chief investment officer across multiple Gladstone entities, reinforcing integration of credit and real estate investment oversight.

The board also approved the promotion of Executive Vice President Michael McQuigg to president effective October 1, 2026, and elevated managing director Andrew Ahlberg to executive vice president, moves the company framed as evidence of bench strength and continuity. Announced publicly on March 23, 2026, the succession plan separates the chairman and CEO roles and is positioned as enhancing corporate governance and supporting the next phase of growth for the lower middle market-focused lender and its stakeholders.

The most recent analyst rating on (GLAD) stock is a Buy with a $21.00 price target. To see the full list of analyst forecasts on Gladstone Capital stock, see the GLAD Stock Forecast page.

Gladstone Capital stockholders approve directors and auditor

On February 5, 2026, Gladstone Capital Corporation held its 2026 Annual Meeting of Stockholders, with common and preferred shareholders represented in person or by proxy. At the meeting, preferred shareholders elected Michela A. English and Anthony W. Parker as directors to serve until the 2029 Annual Meeting, and stockholders ratified the Audit Committee’s selection of PricewaterhouseCoopers LLP as the company’s independent registered public accounting firm for the fiscal year ending September 30, 2026, reinforcing continuity in the board’s composition and the company’s external audit oversight.

The most recent analyst rating on (GLAD) stock is a Hold with a $22.00 price target. To see the full list of analyst forecasts on Gladstone Capital stock, see the GLAD Stock Forecast page.