Gladstone Capital Corporation (NASDAQ:GLAD)‘s stock had its “sell” rating restated by equities researchers at National Securities in a research report issued on Monday. They presently have a $8.00 target price on the investment management company’s stock. National Securities’ target price would suggest a potential downside of 19.35% from the stock’s current price.

The analysts wrote, “• Gladstone posted NII/share of $0.21/share for fiscal 3Q17, a penny above our estimate and matching consensus. Despite strong portfolio growth the past two quarters, revenue was lighter than we had anticipated as fee income fell materially due to very low repayments during the quarter. This has followed the theme of what we have seen this earnings season: significant OID acceleration and prepayment fees in the core-to-upper middle market lenders and very little prepayments and fee income for the lower middle market lenders.

• The portfolio grew by 10.2% Q/Q to $345.5 million from $313.5 million with GLAD originating $35.8 million of investments on the quarter. D/E finished the quarter at 0.65x and the company has significant spare capacity on its credit facility and the ability to utilize its ATM (at-the-market) program to opportunistically issue equity as needed, which we think bodes well for portfolio growth.

• We are revising our fiscal 2017 NII/share estimate to $0.85 from $0.84 and our fiscal 2018 NII/share estimate to $0.85 from $0.86. Even with high effective yields on the loans Gladstone is originating, the cost of capital is too high at this time for earnings growth to materialize even when modeling strong portfolio growth, in our opinion, and we continue to believe shares are overvalued.”

GLAD has been the subject of a number of other reports. Zacks Investment Research upgraded shares of Gladstone Capital Corporation from a “hold” rating to a “buy” rating and set a $11.00 target price for the company in a research report on Tuesday, May 9th. Hilliard Lyons upgraded shares of Gladstone Capital Corporation from an “underperform” rating to a “neutral” rating and boosted their target price for the company from $8.50 to $9.25 in a research report on Thursday, May 4th. Finally, BidaskClub lowered shares of Gladstone Capital Corporation from a “hold” rating to a “sell” rating in a research report on Thursday, July 27th. One research analyst has rated the stock with a sell rating, three have assigned a hold rating and one has issued a buy rating to the company. The company currently has an average rating of “Hold” and a consensus price target of $9.56.

Gladstone Capital Corporation (NASDAQ GLAD) opened at 9.92 on Monday. Gladstone Capital Corporation has a 1-year low of $7.33 and a 1-year high of $10.12. The stock has a 50 day moving average price of $9.86 and a 200-day moving average price of $9.62.

Gladstone Capital Corporation (NASDAQ:GLAD) last issued its earnings results on Wednesday, August 2nd. The investment management company reported $0.21 earnings per share (EPS) for the quarter, hitting the consensus estimate of $0.21. The business had revenue of $9.63 million during the quarter, compared to analysts’ expectations of $10.30 million. Gladstone Capital Corporation had a net margin of 85.01% and a return on equity of 9.88%. Equities research analysts anticipate that Gladstone Capital Corporation will post $0.78 earnings per share for the current year.

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A number of large investors have recently added to or reduced their stakes in the stock. Legal & General Group Plc increased its stake in Gladstone Capital Corporation by 4.5% in the second quarter. Legal & General Group Plc now owns 61,669 shares of the investment management company’s stock worth $607,000 after buying an additional 2,634 shares during the last quarter. Advisors Asset Management Inc. boosted its position in Gladstone Capital Corporation by 7.0% in the second quarter. Advisors Asset Management Inc. now owns 171,702 shares of the investment management company’s stock worth $1,688,000 after buying an additional 11,189 shares during the period. Boston Partners boosted its position in Gladstone Capital Corporation by 0.3% in the second quarter. Boston Partners now owns 84,655 shares of the investment management company’s stock worth $832,000 after buying an additional 225 shares during the period. HL Financial Services LLC boosted its position in Gladstone Capital Corporation by 71.6% in the second quarter. HL Financial Services LLC now owns 19,176 shares of the investment management company’s stock worth $189,000 after buying an additional 8,000 shares during the period. Finally, Eagle Global Advisors LLC boosted its position in Gladstone Capital Corporation by 2.8% in the second quarter. Eagle Global Advisors LLC now owns 14,880 shares of the investment management company’s stock worth $146,000 after buying an additional 400 shares during the period. 15.94% of the stock is currently owned by institutional investors.

Gladstone Capital Corporation Company Profile

Gladstone Capital Corporation is a closed-end, non-diversified management investment company, operating as a business development company (BDC). The objectives of the Company are to achieve and grow current income by investing in debt securities of established businesses that it believes will provide stable earnings and cash flow to pay expenses, make principal and interest payments on its outstanding indebtedness and make distributions to stockholders that grow over time, and to provide its stockholders with long-term capital appreciation in the value of its assets by investing in equity securities of established businesses that it believes can grow over time to permit it to sell its equity investments for capital gains.

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