Capital Southwest Corporation (NASDAQ:CSWC) Earnings Report Highlights

• Earnings Per Share (EPS) of $0.63, slightly above the estimated $0.62, showcasing a 1.61% earnings surprise.
• Revenue reached $51.97 million, narrowly missing the estimate but marking a year-over-year increase and exceeding consensus estimates three times in the past four quarters.
• Investment Portfolio valued at $1.7 billion with a strategic focus on high-yield investments, indicating strong market positioning and financial health.

Capital Southwest Corporation (NASDAQ:CSWC) is an internally managed business development company operating in the Zacks Financial - Investment Management industry. The company focuses on providing capital to middle-market companies, primarily through debt and equity investments. CSWC's competitors include other business development companies and investment management firms.

On February 3, 2025, CSWC reported earnings per share (EPS) of $0.63, slightly surpassing the estimated $0.62. This represents a 1.61% earnings surprise, as highlighted by Zacks. However, this is a decrease from the $0.70 EPS reported in the same quarter last year. Despite this, the company has shown resilience in its earnings performance.

CSWC's revenue for the quarter was $51.97 million, slightly below the estimated $52.66 million. However, it exceeded the Zacks Consensus Estimate by 2.64%, marking an increase from the $48.57 million reported a year ago. Over the past four quarters, CSWC has exceeded consensus revenue estimates three times, demonstrating consistent revenue growth.

The company's investment portfolio is valued at $1.7 billion, with a credit portfolio of $1.5 billion, 98% of which is 1st lien senior secured debt. During the quarter, CSWC committed $313.4 million in new credit investments, achieving a weighted average yield of 12.1%. This reflects the company's strategic focus on high-yield investments.

CSWC's financial metrics indicate a strong market position. The price-to-earnings (P/E) ratio is approximately 14.29, while the price-to-sales ratio is about 6.41. The enterprise value to sales ratio is around 7.02, and the enterprise value to operating cash flow ratio is approximately 23.75. These figures suggest a solid valuation relative to sales and cash flow. The company's low debt-to-equity ratio of 0.19 and high current ratio of 59.12 indicate strong financial health and liquidity.