Great Elm Capital Reports Q4 Earnings Miss

Written by Emily J. Thompson, Senior Investment Analyst

Source: seekingalpha

Updated: Mar 02 2026

0mins

GECC-2.98%

Should l Buy GECC?

Source: seekingalpha

Earnings Miss: Great Elm Capital reported a Q4 GAAP EPS of -$1.57, missing estimates by $1.91, indicating significant challenges in profitability that could undermine investor confidence.
Investment Income Growth: Total investment income for the quarter ended December 31, 2025, was $12.6 million, up from $10.6 million for the quarter ended September 30, 2025, suggesting improvements in portfolio management despite overall earnings falling short.
Increased Cash Distributions: The company received $4.3 million in cash distributions from CLO Formation JV in Q4, a substantial increase from $1.5 million in the previous quarter, reflecting improved investment returns that may support future cash flows.
Declining Net Assets: As of December 31, 2025, GECC's net assets were $112.9 million, down from $140.1 million as of September 30, 2025, primarily due to unrealized losses comprising over half of the change, highlighting vulnerabilities in the balance sheet.

Trade with 70% Backtested Accuracy

Stop guessing "Should I Buy GECC?" and start using high-conviction signals backed by rigorous historical data.

Analyst Views on GECC

Wall Street analysts forecast GECC stock price to rise

2 Analyst Rating

1 Buy

1 Hold

0 Sell

Moderate Buy

Current: 5.700

Low

8.50

Averages

9.25

High

10.00

Current: 5.700

Low

8.50

Averages

9.25

High

10.00

Clear Street

Buy

Hold

downgrade

2026-03-03

Reason

Clear Street

Price Target

AI Analysis

2026-03-03

downgrade

Buy

Hold

Reason

Clear Street downgraded Great Elm Capital to Hold from Buy with a price target of $5.50, down from $8.50, citing balance sheet leverage and credit concerns following the company's Q4 report. The firm notes elevated leverage, weak CLO valuations, portfolio concentration, and elevated allocation to unsecured debt investments in its downgrade.

Clear Street

Mickey Schleien

Buy

downgrade

$10

2025-11-07

Reason

Clear Street

Mickey Schleien

Price Target

$10

2025-11-07

downgrade

Buy

Reason

Clear Street analyst Mickey Schleien lowered the firm's price target on Great Elm Capital to $8.50 from $10 and keeps a Buy rating on the shares. The company reported a "rough" Q3 with multiple credit issues, the analyst tells investors in a research note. The firm now expects lower forward earnings and possible dividend pressure in 2026 for Great Elm.

Unlock Full Analyst Thesis， Get the complete breakdown of rating reason for GECC

Unlock Now

About GECC

Great Elm Capital Corp. operates as a closed-end, externally managed, non-diversified management investment company. The Company’s objective seeks to generate current income and capital appreciation through debt and income-generating equity investments, including investments in specialty finance businesses. It invests in secured and senior secured debt instruments of middle market companies, as well as income-generating equity investments in specialty finance companies. In addition, it invests in collateralized loan obligations (CLOs) and related warehouse facilities. It also makes investments throughout other portions of a company’s capital structure, including subordinated debt, mezzanine debt, and equity or equity-linked securities. The Company is managed by Great Elm Capital Management, LLC.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.

Great Elm Capital Corporation Q4 2025 Earnings Call Insights

6 days agoseekingalpha

Management Changes: Newly appointed Executive Chairman Jason Reese emphasized the Board's decision to enhance direct engagement with management to navigate a more demanding credit environment, which is expected to improve governance and shareholder value.
Investment Income Growth: CEO Matt Kaplan reported that net investment income increased over 50% quarter-over-quarter to $0.31 per share, primarily due to higher cash income and stronger CLO joint venture distributions, indicating positive performance in revenue growth.
Net Asset Value Changes: As of December 31, 2025, the company's net assets were $112.9 million or $8.07 per share, down from $140.1 million or $10.01 per share in the previous quarter, reflecting market volatility amid active portfolio repositioning.
Dividend Announcement: CFO Keri Davis announced a quarterly dividend of $0.30 per share for Q1 2025, equating to a 19.2% annualized yield, demonstrating the company's commitment to returning value to shareholders while maintaining cash flow.

Great Elm Capital Appoints New Executive Chairman

Mar 02 2026Newsfilter

Board Changes: Jason Reese has been appointed as Executive Chairman of Great Elm Capital, succeeding Matthew Drapkin, who will remain as Vice Chairman, ensuring continuity and stability in corporate governance.
Fee Waiver: The investment adviser of Great Elm Capital waived all accrued incentive fees as of December 31, 2025, totaling approximately $2.3 million, or $0.16 per share, which will directly enhance the company's net asset value.
Financial Performance: For the fourth quarter of 2025, the company reported net investment income of $4.4 million, or $0.31 per share, reflecting over 50% growth quarter-over-quarter, demonstrating resilience and profitability in a challenging market environment.
Dividend Distribution: The board declared a distribution of $0.30 per share for the first quarter of 2026, resulting in an annualized yield of 19.2%, highlighting the company's commitment to shareholder returns and effective cash flow management.