Great Elm Capital Corp. (GECC) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Great Elm Capital Corp. (GECC) Financial Services Profile

Great Elm Capital Corp. (GECC) is a business development company providing specialized loan and mezzanine financing to middle-market companies, primarily targeting sectors such as media, healthcare, and telecommunications. With a focus on debt instruments, GECC seeks to generate income through strategic investments in companies with revenues between $3 million and $75 million.

What Is the Investment Thesis for GECC?

The company's strategy of investing in debt instruments within sectors like media, healthcare, and telecommunications offers diversification and potential for stable income generation. With a market capitalization of $68.9M and a beta of 0.75, GECC exhibits moderate volatility relative to the broader market. Key to the investment thesis is the company's ability to maintain its high profit margin of 284.4% and gross margin of 234.3%, reflecting efficient operations and strategic investment decisions. Growth catalysts include expanding its portfolio of middle-market loans and capitalizing on favorable interest rate environments. However, potential risks include economic downturns impacting portfolio company performance and increased competition within the BDC sector.

Based on FMP financials and quantitative analysis

GECC Key Highlights

Market capitalization of $68.9M indicates its size within the asset management industry.

• Profit margin of 284.4% reflects strong profitability from its investment activities.
• Gross margin of 234.3% demonstrates efficient management of its investment portfolio.
• Beta of 0.75 suggests lower volatility compared to the overall market.
• Dividend yield of 23.23% provides a substantial income stream for investors.

Who Are GECC's Competitors?

GECC is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance This table mixes two scoring engines — compare a number only with others carrying the same tag.

What Are GECC's Key Strengths?

High profit margin of 284.4%.

• Specialized focus on middle-market lending.
• Attractive dividend yield of 23.23%.
• Expertise in sectors such as media, healthcare, and telecommunications.

What Are GECC's Weaknesses?

Small market capitalization of $68.9M.

• Limited number of employees (12).
• Dependence on middle-market companies for revenue.
• Potential vulnerability to economic downturns.

What Could Drive GECC Stock Higher?

Expansion of investment portfolio in middle-market companies.

• Strategic partnerships with financial institutions to enhance deal sourcing.
• Capitalization on favorable interest rate environments to increase net interest margin.
• Deepening expertise in sectors like media, healthcare, and telecommunications.

What Are the Key Risks for GECC?

Financial-distress signal — its Altman Z-Score of -1.44 sits in the distress zone (elevated bankruptcy risk).

• Negative return on equity (-26.4%) — the business is not currently generating profit on shareholder capital.
• Insider selling — insiders were net sellers of roughly $1.6M recently.
• Increased competition within the BDC sector impacting market share.
• Economic downturns affecting portfolio company performance and loan defaults.
• Regulatory changes impacting the asset management industry and compliance costs.
• Interest rate volatility affecting profitability and investment returns.

What Are the Growth Opportunities for GECC?

• Expanding Investment Portfolio: Great Elm Capital Corp. has the opportunity to grow its investment portfolio by targeting additional middle-market companies in its preferred sectors. The market for middle-market lending is estimated to be worth billions of dollars, offering significant growth potential. By leveraging its expertise in sectors like media, healthcare, and telecommunications, GECC can identify attractive investment opportunities and deploy capital to generate income and capital appreciation. The timeline for expanding the portfolio is ongoing, with continuous evaluation of potential investments.
• Strategic Partnerships: Forming strategic partnerships with other financial institutions and private equity firms can enhance GECC's deal sourcing capabilities and expand its network. Collaborating with partners can provide access to a broader range of investment opportunities and increase the company's visibility within the middle-market lending space. These partnerships can also facilitate co-investments and risk sharing, improving the overall risk-adjusted returns. The timeline for establishing strategic partnerships is ongoing, with a focus on building long-term relationships.
• Capitalizing on Interest Rate Environment: GECC can capitalize on favorable interest rate environments to increase its net interest margin and profitability. By strategically managing its funding costs and loan pricing, the company can optimize its earnings and generate higher returns for its shareholders. Monitoring interest rate trends and adjusting its investment strategies accordingly is crucial for maximizing profitability. The timeline for capitalizing on interest rate environment is ongoing, with continuous monitoring and adjustments.
• Focusing on Sector Specialization: Deepening its expertise in specific sectors like media, healthcare, and telecommunications can provide GECC with a competitive advantage and attract more investment opportunities. By developing a deep understanding of the industry dynamics and trends in these sectors, the company can make more informed investment decisions and generate higher returns. Investing in research and development to enhance its sector expertise is essential for long-term success. The timeline for sector specialization is ongoing, with continuous learning and adaptation.
• Enhancing Operational Efficiency: Improving operational efficiency through technology adoption and process optimization can reduce costs and improve profitability. By investing in automation and digital solutions, GECC can streamline its operations and enhance its ability to manage its investment portfolio effectively. Implementing best practices in risk management and compliance is also crucial for maintaining operational excellence. The timeline for enhancing operational efficiency is ongoing, with continuous improvement initiatives.

What Are GECC's Competitive Advantages?

• Specialized focus on middle-market lending.
• Expertise in sectors such as media, healthcare, and telecommunications.
• Customized financing solutions tailored to specific company needs.
• Established relationships with middle-market companies and financial institutions.

What Does GECC Do?

Great Elm Capital Corp. was established to provide tailored financing solutions to middle-market companies, focusing primarily on loan and mezzanine investments. The company operates as a business development company (BDC), strategically investing in debt instruments to generate income and capital appreciation. GECC targets companies with revenues typically ranging from $3 million to $75 million, offering financing solutions that support growth, acquisitions, and recapitalizations. The company's investment approach emphasizes sectors such as media, commercial services and supplies, healthcare, telecommunication services, and communications equipment. GECC's investment size typically ranges between $3 million and $10 million, reflecting its focus on providing customized financing to meet the specific needs of its portfolio companies. Headquartered in Waltham, USA, Great Elm Capital Corp. continues to evolve its investment strategies to capitalize on emerging opportunities within the middle-market lending landscape, aiming to deliver consistent returns to its shareholders through disciplined investment practices and active portfolio management.

What Products and Services Does GECC Offer?

• Provides loan and mezzanine financing to middle-market companies.
• Invests in debt instruments of middle-market companies.
• Targets companies with revenues between $3 million and $75 million.
• Focuses on sectors such as media, healthcare, and telecommunications.
• Makes equity investments between $3 million and $10 million.
• Offers customized financing solutions to support growth and acquisitions.

How Does GECC Make Money?

• Generates income through interest payments on loans and debt instruments.
• Realizes capital appreciation through equity investments.
• Manages a portfolio of middle-market loans and investments.
• Provides customized financing solutions to meet the specific needs of portfolio companies.

What Industry Does GECC Operate In?

Great Elm Capital Corp. operates within the asset management industry, which is characterized by increasing demand for specialized lending solutions for middle-market companies. The industry is influenced by macroeconomic factors, interest rate trends, and regulatory changes. GECC competes with other business development companies and private credit funds in providing debt financing to companies in sectors like media, healthcare, and telecommunications. The competitive landscape is becoming more intense, with new entrants and established players vying for market share. GECC's focus on specific sectors and its ability to provide customized financing solutions differentiate it within the industry.

Who Are GECC's Key Customers?

• Middle-market companies seeking debt financing.
• Companies in sectors such as media, healthcare, and telecommunications.
• Businesses with revenues between $3 million and $75 million.
• Companies requiring capital for growth, acquisitions, or recapitalizations.

The most recent 10 insider filings for Great Elm Capital Corp. break down as 9 sales and 1 purchases. On net that is roughly 290K shares disposed (about $1.6M), a signal worth weighing alongside the fundamentals.

Great Elm Capital Corp. has beaten Wall Street's EPS estimate in 4 of its last 8 reported quarters — more hits than misses. Reported results have landed about 4.7% below estimates on average.

Great Elm Capital Corp.'s Piotroski F-Score is 6/9, a 9-point checklist of profitability, leverage and efficiency — a middling fundamental profile. Its Altman Z-Score of -1.44 places it in the distress zone, a signal of elevated financial risk.

Return on equity for Great Elm Capital Corp. stands at -26.4%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is -11.7%, showing how much profit it generates from its asset base. Its free cash flow yield is 72.7%, a gauge of the cash the business throws off relative to its market value. Its earnings yield is -39.2%, the inverse of the P/E and a quick read on earnings relative to price.

Great Elm Capital Corp. (GECC) Valuation Context

Valued at $68.9M, GECC is classified as a micro-cap stock. Analyst price targets span from $11.00 to $11.00, with a consensus of $11.00. At the current price of $5.97, that implies approximately 84% upside potential. Relative to its peer group, GECC's quantitative score of 38/100 is below the peer average of 73/100.

GECC Revenue & Earnings Trend

In Q2 FY2026, GECC generated $13.8M in top-line revenue, marking a sequential increase of 528.8%. The company recorded net income of $6.4M, with diluted EPS of $0.56. Revenue has increased across the last three reported quarters, suggesting sustained momentum for this micro-cap Financial Services company. Across the four most recent quarters, GECC averaged $-0.77 in diluted EPS.

Company Profile

Great Elm Capital Corp. operates in the Asset Management industry within the Financial Services sector. It is headquartered in Palm Beach Gardens, US. The company is led by CEO Jason W. Reese. GECC has traded publicly since 2016.

GECC Financials

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GECC Analyst Consensus

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Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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