Investment Thesis
Great Elm Capital Corp. is experiencing severe financial distress with massive net losses (-$31.8M on $12.5M revenue) and deeply negative profitability metrics (-254.4% net margin, -28.1% ROE). The company is burning cash operationally (-$2.8M FCF) with minimal liquidity ($1.8M cash) relative to substantial liabilities ($227.8M), creating an unsustainable financial position.
Strengths
- Positive revenue growth of 9.8% YoY demonstrates some operational activity
- Debt-free capital structure with 0.00x Debt/Equity ratio reduces leverage risk
- Substantial asset base of $340.8M provides liquidation value cushion
Risks
- Catastrophic net loss of -$31.8M with -254.4% net margin indicates fundamental business model failure
- Severely constrained liquidity with only $1.8M cash against $227.8M liabilities creates solvency risk
- Negative operating cash flow of -$2.8M demonstrates the company is consuming cash to fund operations
- Extremely negative ROE (-28.1%) and ROA (-9.3%) indicate shareholder capital is being destroyed
- Zero insider buying activity in 90 days suggests management lacks confidence in recovery
Key Metrics to Watch
- Operating cash flow trend - critical to determine if cash burn stabilizes or accelerates
- Cash balance depletion rate - at current burn rate, sustainability window is severely limited
- Path to operational profitability - company must demonstrate clear plan to reach positive operating income
Financial Metrics
Revenue
12.5M
Net Income
-31.8M
EPS (Diluted)
$-2.57
Free Cash Flow
-2.8M
Total Assets
340.8M
Cash
1.8M
Profitability Ratios
Gross Margin
N/A
Operating Margin
N/A
Net Margin
-254.4%
ROE
-28.1%
ROA
-9.3%
FCF Margin
-22.5%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
0.00x
Debt/Assets
66.9%
Interest Coverage
N/A
Long-term Debt
N/A
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-03-25T17:18:10.379881 |
Data as of: 2025-12-31 |
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