📊 CSWC Key Takeaways
Is Capital Southwest Corp. (CSWC) a Good Investment?
CSWC is a Business Development Company with a substantial $2.2B asset base and positive net income, but faces critical fundamental concerns. Negative operating cash flow of -$193.5M combined with minimal cash reserves of $29M represents an unsustainable financial position that raises serious questions about the company's ability to meet debt obligations and continue operations without external financing.
CAPITAL SOUTHWEST CORP shows solid bottom-line profitability, modest revenue growth, and a balance sheet still supported by nearly $1.0B of equity. However, the quality of earnings looks mixed because net income is far above revenue and operating/free cash flow are deeply negative, suggesting reported profits may be driven by non-cash portfolio marks or investment-related items rather than durable cash generation.
Capital Southwest Corp. Key Strengths (CSWC)
- Substantial asset base of $2.2B provides operational foundation
- Positive net income of $113M demonstrates profitable portfolio and investment returns
- EPS growth of 29.3% YoY shows improving per-share profitability
- Revenue grew 16.1% YoY, indicating continued portfolio income growth
- Net income remained strong at $85.52M with positive ROE of 8.6% and ROA of 4.0%
- Large asset base of $2.12B and nearly $995.63M of equity provide capital support
CSWC Stock Risks: Capital Southwest Corp. Investment Risks
- Severe negative operating cash flow of -$193.5M is unsustainable and indicates cash burn crisis
- Critical liquidity shortage with only $29M cash against $1.2B liabilities creates refinancing risk
- High leverage at 1.12x debt-to-equity combined with negative cash generation threatens solvency
- Minimal net income growth (1.1% YoY) despite 16.1% revenue growth suggests operational deterioration
- Heavy dependence on portfolio company performance and investment returns creates cyclical vulnerability
- Operating cash flow of -$134.37M and free cash flow of -$134.60M point to weak cash conversion
- Leverage is meaningful, with $1.07B of long-term debt and debt-to-equity of 1.08x
- Reported profitability appears low quality, as a 789.3% net margin suggests earnings are heavily influenced by non-operating or non-cash factors
Key Metrics to Watch
- Operating cash flow trend and path to positive cash generation
- Cash position and liquidity reserves relative to debt obligations
- Portfolio company valuations and realized/unrealized gains
- Debt refinancing needs and borrowing capacity in credit markets
- Distribution sustainability and potential dividend cuts
- Operating cash flow trend versus reported net income
- Debt-to-equity and portfolio credit quality/non-accrual levels
Capital Southwest Corp. (CSWC) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The current ratio below 1.0x warrants monitoring of short-term liquidity.
CSWC Profit Margin, ROE & Profitability Analysis
CSWC vs Market Sector: How Capital Southwest Corp. Compares
How Capital Southwest Corp. compares to Market sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Capital Southwest Corp. Stock Overvalued? CSWC Valuation Analysis 2026
Based on fundamental analysis, Capital Southwest Corp. has mixed fundamental signals relative to the Market sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Capital Southwest Corp. Balance Sheet: CSWC Debt, Cash & Liquidity
CSWC Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Capital Southwest Corp.'s revenue has grown significantly by 16% over the 5-year period, indicating strong business expansion. The most recent EPS of $2.05 reflects profitable operations.
CSWC Revenue Growth, EPS Growth & YoY Performance
CSWC Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2012 | $5.6M | N/A | N/A |
| Q2 2012 | $1.3M | N/A | N/A |
| Q1 2012 | $1.2M | N/A | N/A |
| Q3 2011 | $2.4M | N/A | N/A |
| Q2 2011 | $1.2M | N/A | N/A |
| Q1 2011 | $1.2M | N/A | N/A |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Capital Southwest Corp. Dividends, Buybacks & Capital Allocation
CSWC SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Capital Southwest Corp. (CIK: 0000017313)
📋 Recent SEC Filings
❓ Frequently Asked Questions about CSWC
What is the AI rating for CSWC?
Capital Southwest Corp. (CSWC) has a Combined AI Grade of C from Claude (C) and ChatGPT (B) with 70% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are CSWC's key strengths?
Claude: Substantial asset base of $2.2B provides operational foundation. Positive net income of $113M demonstrates profitable portfolio and investment returns. ChatGPT: Revenue grew 16.1% YoY, indicating continued portfolio income growth. Net income remained strong at $85.52M with positive ROE of 8.6% and ROA of 4.0%.
What are the risks of investing in CSWC?
Claude: Severe negative operating cash flow of -$193.5M is unsustainable and indicates cash burn crisis. Critical liquidity shortage with only $29M cash against $1.2B liabilities creates refinancing risk. ChatGPT: Operating cash flow of -$134.37M and free cash flow of -$134.60M point to weak cash conversion. Leverage is meaningful, with $1.07B of long-term debt and debt-to-equity of 1.08x.
What is CSWC's revenue and growth?
Capital Southwest Corp. reported revenue of $10.8M.
Does CSWC pay dividends?
Capital Southwest Corp. pays dividends, with $147.2M distributed to shareholders in the trailing twelve months.
Where can I find CSWC SEC filings?
Official SEC filings for Capital Southwest Corp. (CIK: 0000017313) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is CSWC's EPS?
Capital Southwest Corp. has a diluted EPS of $1.90.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is CSWC's fundamental grade?
Based on our AI fundamental analysis in June 2026, Capital Southwest Corp. has a C grade with 70% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is CSWC stock overvalued or undervalued?
Valuation metrics for CSWC: ROE of 11.2% (sector avg: 15%), net margin of 1,042.9% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
What is CSWC's AI grade for 2026?
Our dual AI analysis gives Capital Southwest Corp. a combined C grade for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is CSWC's free cash flow?
Capital Southwest Corp.'s operating cash flow is $-193.5M, with capital expenditures of $286.0K. FCF margin is -1,788.6%.
How does CSWC compare to other Market stocks?
Vs Default sector averages: Net margin 1,042.9% (avg: 12%), ROE 11.2% (avg: 15%), current ratio N/A (avg: 1.8).