📊 CSWC Key Takeaways
Is Capital Southwest Corp. (CSWC) a Good Investment?
Capital Southwest Corporation exhibits severe operational distress with massively negative free cash flow (-134.6M) and an unsustainably high net margin (789.3%) driven by non-operating gains rather than core business profitability. The company's high leverage (1.08x debt-to-equity) combined with minimal operating cash generation and declining cash position presents significant financial stress, despite modest revenue growth.
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.
Why Buy Capital Southwest Corp. Stock? CSWC Key Strengths
- Revenue growth of 16.1% YoY demonstrates top-line expansion
- Moderate gross profit generation provides some operational foundation
- Substantial asset base ($2.1B) provides collateral and operational capacity
- 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
- Severely negative operating cash flow (-134.4M) indicates inability to generate cash from core operations
- Artificially inflated net margin (789.3%) suggests income driven by investment gains rather than sustainable operations
- High financial leverage (1.08x debt-to-equity) with deteriorating liquidity position threatens financial stability
- Negative free cash flow of -134.6M consuming capital at unsustainable rate
- Minimal cash reserves (42.6M) relative to debt obligations and cash burn rate
- 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 return to positive territory
- Net income composition (proportion from core operations vs. investments)
- Debt levels and refinancing requirements
- Cash position depletion rate and covenant compliance
- Gross profit expansion relative to operating expense control
- 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 $1.87 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 Rating of SELL from Claude (SELL) and ChatGPT (HOLD) with 72% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are CSWC's key strengths?
Claude: Revenue growth of 16.1% YoY demonstrates top-line expansion. Moderate gross profit generation provides some operational foundation. 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: Severely negative operating cash flow (-134.4M) indicates inability to generate cash from core operations. Artificially inflated net margin (789.3%) suggests income driven by investment gains rather than sustainable operations. 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 $108.7M 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 $1.46.
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 rating reflects both perspectives for balanced insights.
Is CSWC a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Capital Southwest Corp. has a SELL rating with 72% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is CSWC stock overvalued or undervalued?
Valuation metrics for CSWC: ROE of 8.6% (sector avg: 15%), net margin of 789.3% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
Should I buy CSWC stock in 2026?
Our dual AI analysis gives Capital Southwest Corp. a combined SELL rating 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 $-134.4M, with capital expenditures of $237.0K. FCF margin is -1,242.3%.
How does CSWC compare to other Market stocks?
Vs Default sector averages: Net margin 789.3% (avg: 12%), ROE 8.6% (avg: 15%), current ratio N/A (avg: 1.8).