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Gladstone Investment Corp (GAIN)
NASDAQ:GAIN
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Gladstone Investment
(NASDAQ:GAIN)
70Outperform
Gladstone Investment (GAIN) vs. S&P 500 (SPY)
Market Cap
$494.73M
Dividend Yield7.11%
Average Volume (3M)113.90K
Price to Earnings (P/E)7.0
Beta (1Y)0.69
Revenue Growth-8.68%
EPS Growth-3.76%
CountryUS
Employees70
SectorFinancial
Sector Strength93
IndustryAsset Management Services
Share Statistics
EPS (TTM)1.92
Shares Outstanding36,837,380
10 Day Avg. Volume105,701
30 Day Avg. Volume113,902
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.14
Price to Cash Flow (P/CF)-0.70
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$13.75Price Target Upside2.38% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
Gladstone Investment Business Overview & Revenue Model
Company DescriptionGladstone Investment Corporation (GAIN) is a publicly traded business development company (BDC) that primarily focuses on investing in small and medium-sized businesses across the United States. The company operates in various sectors, including manufacturing, consumer products, and services. Its core services involve providing debt and equity capital to support acquisitions, growth, and recapitalizations of privately held companies.
How the Company Makes MoneyGladstone Investment makes money through a combination of interest income, dividend income, and capital gains. The company primarily invests in debt securities, such as senior secured loans and subordinated debt, which generate interest income. Additionally, GAIN often takes equity positions in the businesses it finances, allowing it to earn dividend income and potentially realize capital gains upon the sale of these equity stakes. Key revenue streams include interest payments from its debt investments, dividends from equity holdings, and proceeds from exiting investments at a profit. Gladstone Investment's earnings are significantly influenced by its ability to identify high-quality investment opportunities and effectively manage its investment portfolio.
Gladstone Investment Financial Statement Overview
Summary
Gladstone Investment exhibits strong profitability with high margins, but faces challenges with inconsistent revenue growth and negative cash flows. The balance sheet shows moderate leverage, but the cash flow issues need to be addressed to ensure long-term financial health.Income Statement
The company shows a robust TTM net profit margin of 43.37% and a strong EBIT margin of 93.26%, indicating excellent profitability. However, revenue has fluctuated, with a decline in the recent TTM compared to the previous annual period. The revenue growth rate year-over-year is negative, reflecting potential challenges in maintaining consistent revenue streams.72
Positive
Balance Sheet
The debt-to-equity ratio is 0.93, which is moderate, implying manageable leverage. The equity ratio is stable at 45.06%, indicating a solid equity base. Return on equity is strong at 6.43% in the TTM, but has shown some variability due to fluctuating net income.65
Positive
Cash Flow
The company has negative free cash flow growth, and both operating and free cash flows are negative in the TTM, raising concerns about cash generation capabilities. The operating cash flow to net income ratio is negative, suggesting inefficiencies in converting income to cash.55
Neutral
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 72.70M | 79.05M | 32.66M | 99.15M | 48.73M | 8.01M | Gross Profit |
| 61.72M | 82.82M | 10.98M | 63.37M | 29.16M | 1.20M | EBIT |
| 67.82M | 48.20M | 51.42M | 118.56M | 44.78M | 3.03M | EBITDA |
| 585.00K | 0.00 | 51.42M | 80.89M | 44.78M | 3.03M | Net Income Common Stockholders |
| 70.03M | 85.31M | 35.55M | 102.32M | 42.45M | -17.49M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 3.15M | 3.22M | 2.68M | 14.19M | 2.06M | 2.78M | Total Assets |
| 1.09B | 938.08M | 765.64M | 740.41M | 643.73M | 576.38M | Total Debt |
| 455.06M | 398.35M | 292.61M | 261.35M | 151.38M | 54.30M | Net Debt |
| 451.91M | 395.13M | 289.92M | 247.16M | 149.32M | 51.52M | Total Liabilities |
| 597.71M | 445.37M | 325.90M | 294.58M | 261.37M | 207.35M | Stockholders Equity |
| 490.05M | 492.71M | 439.74M | 445.83M | 382.36M | 369.03M |
| Cash Flow | Free Cash Flow | ||||
| -84.86M | -69.94M | -4.50M | 36.60M | -29.73M | 35.31M | Operating Cash Flow |
| -84.86M | -69.94M | -4.50M | 36.60M | -29.73M | 35.31M | Investing Cash Flow |
| 1.97M | 0.00 | -98.22M | -42.72M | -64.22M | -89.18M | Financing Cash Flow |
| 83.95M | 69.91M | -6.74M | -24.50M | 28.07M | -34.85M |
Gladstone Investment Technical Analysis
Positive
13.43
Price Trends
13.31
Positive
13.34
Positive
12.92
Positive
Market Momentum
0.03
Positive
48.06
Neutral
23.08
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GAIN, the sentiment is Positive. The current price of 13.43 is below the 20-day moving average (MA) of 13.59, above the 50-day MA of 13.31, and above the 200-day MA of 12.92, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 48.06 is Neutral, neither overbought nor oversold. The STOCH value of 23.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GAIN.
Gladstone Investment Risk Analysis
Gladstone Investment disclosed 12 risk factors in its most recent earnings report. Gladstone Investment 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 Investment Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $5.11B | 10.02 | 19.26% | 5.06% | 51.80% | 12.05% | |
76 Outperform | $15.07B | 9.43 | 12.40% | 8.34% | 19.95% | -10.57% | |
70 Outperform | $494.73M | 7.04 | 14.74% | 7.11% | -8.68% | -3.76% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
64 Neutral | $740.36M | 9.19 | 12.58% | 7.79% | 40.50% | 27.58% | |
58 Neutral | $702.74M | ― | -8.57% | 16.35% | 8.24% | -207.60% | |
53 Neutral | $468.17M | 28.87 | 3.28% | 12.62% | ― | -66.59% |
* Financial Sector Average
Performance Comparison
GAIN
Gladstone Investment
13.43
0.89
7.10%
FDUS
Fidus Investment
21.83
4.44
25.53%
MAIN
Main Street Capital
57.65
15.06
35.36%
PNNT
Pennantpark Investment
7.17
1.19
19.90%
ARCC
Ares Capital
22.45
3.54
18.72%
TCPC
BlackRock TCP Capital
8.26
-1.00
-10.80%
Gladstone Investment Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: 1.51% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call reflected strong performance with successful exits and supplemental distributions, a solid balance sheet, and active investment opportunities. However, there were challenges with decreased NAV, increased expenses, and ongoing nonaccrual issues with certain portfolio companies.Highlights
Successful Exit and Capital Gains
Exited portfolio company Nth Degree, generating a realized capital gain of $42.3 million.
Supplemental Distribution to Shareholders
Declared a supplemental distribution of $0.70 per share during the quarter, reinforcing the buyout-focused strategy.
Strong Balance Sheet and Liquidity
Maintained a strong balance sheet with low leverage and a positive liquidity position with $160 million available on a $200 million credit facility.
Increased Investment Opportunities
Active period for investments with significant opportunities in new acquisitions and add-ons, particularly in the M&A market.
Dividend Income and Yield
The aggregate estimated fiscal year distributions yield about 12% using the closing price of $13.80.
Lowlights
Decreased Net Asset Value (NAV)
NAV decreased to $12.49 per share from $13.01 per share, primarily due to $0.94 per share of distributions and net unrealized depreciation.
Increased Expenses
Net expenses for the quarter were $15.3 million, up from $9.8 million, due to a $5.4 million increase in accrued capital gains-based incentive fees.
Nonaccrual Status for Portfolio Companies
Continued nonaccrual status for four portfolio companies, although improvements were noted for one company generating a profit.
Company Guidance
In the second quarter of fiscal year 2025, Gladstone Investment Corporation reported adjusted net investment income (NII) of $0.24 per share with total assets amounting to $869 million. The quarter saw a significant realized capital gain of approximately $42.3 million from the exit of Nth Degree, while the investment income rose to $22.6 million. The firm maintained a strong balance sheet with an asset coverage ratio of 229.3% and approximately $160 million available on their $200 million credit facility. In terms of shareholder distributions, the company upheld a monthly distribution of $0.08 per share, supplemented by a $0.70 per share distribution, paid in October, reflecting their buyout strategy. The net asset value (NAV) decreased to $12.49 per share due to distributions and net unrealized depreciation on investments. Despite these fluctuations, the company's ongoing strategy and active investment period indicate a positive outlook with a robust pipeline of new acquisition opportunities.Gladstone Investment Corporate Events
DividendsFinancial Disclosures
Gladstone Investment Announces Monthly Dividends and Earnings Call
Neutral
Jan 14, 2025
On January 14, 2025, Gladstone Investment Corporation announced that its board of directors declared monthly cash distributions of $0.08 per share for January, February, and March 2025. The company will report its third fiscal quarter earnings on February 12, 2025, with a conference call scheduled for February 13, 2025, offering stakeholders insights into the company’s financial performance and strategic direction.
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.