Gladstone Investment Corporation Business Development Company (GAIN)

FairStock Score: 93/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a Graham-style investor, I start with asset value and earning power. Gladstone Investment is a business development company lending to and investing in lower middle market companies. It has no obvious wide moat; its edge depends on credit selection and deal sourcing. The balance sheet is levered, with a debt-to-equity ratio of 0.88, and FairStock's ROCE is only 2.41%, so the asset base is not producing high returns. Still, reported net income was $184.8M in FY2026 (period ended 2026-03-31), up from $65.3M in FY2025 (period ended 2025-03-31), and FairStock's ROE is 29.17%. That looks strong, but the latest filed quarter—fiscal Q1 2027, ended 2026-06-30—showed a net loss of $11.9M, so earnings are lumpy and likely driven by portfolio gains, not steady interest spread. Valuation is the attraction: at the 2026-10-13 close of $15.32, FairStock puts it at 0.94 times book and 3.60 times earnings, with a 6.05% dividend yield. FairStock's Graham Number is $39.45, a 61.17% margin of safety, and its Lynch category is asset play. But I must weigh that against a Piotroski F-Score of 3/9, an Altman Z-Score of 0.72, and trailing free cash flow of negative $43.4M. A cheap price on questionable book value is not a bargain. The asset discount might be real, but only if credit marks hold and the dividend is covered by sustainable net investment income. I would want more consistent cash generation before trusting the headline P/E or asset discount.

In plain English: Gladstone Investment is a public company that lends money to and buys stakes in smaller, established private businesses. Its latest full-year reported results were strong, but the most recent filed quarter showed a loss, and the business uses borrowed money while cash coming in after expenses and investments is negative. The shares look cheap compared with the company's stated asset value and pay a high dividend, but the uneven results mean the low price may reflect real risk.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q1 2027 10-Q (period ended 2026-06-30) · fiscal Q3 2026 10-Q (period ended 2025-12-31) · fiscal Q2 2026 10-Q (period ended 2025-09-30) · fiscal Q1 2026 10-Q (period ended 2025-06-30) · FY2026 10-K (period ended 2026-03-31) · FY2025 10-K (period ended 2025-03-31) · FY2024 10-K (period ended 2024-03-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer