17-05-2025
Capital Southwest Corporation Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
Investors in Capital Southwest Corporation (NASDAQ:CSWC) had a good week, as its shares rose 6.8% to close at US$21.37 following the release of its yearly results. Revenues were in line with forecasts, at US$204m, although statutory earnings per share came in 15% below what the analysts expected, at US$1.47 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Capital Southwest after the latest results.
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Taking into account the latest results, the current consensus from Capital Southwest's five analysts is for revenues of US$226.8m in 2026. This would reflect a solid 11% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 61% to US$2.25. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$226.4m and earnings per share (EPS) of US$2.31 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
See our latest analysis for Capital Southwest
The consensus price target held steady at US$22.92, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Capital Southwest at US$25.00 per share, while the most bearish prices it at US$20.50. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Capital Southwest's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2026 being well below the historical 28% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.4% annually. So it's pretty clear that, while Capital Southwest's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Capital Southwest. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$22.92, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Capital Southwest analysts - going out to 2027, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Capital Southwest (2 are significant) you should be aware of.
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