Capital Southwest (CSWC): Assessing Valuation After Q2 and Half-Year Gains in Revenue and Net Income

Capital Southwest (CSWC) has just released its earnings report for the second quarter and first half of 2025, providing investors with fresh insights into its evolving financial picture. The latest results include higher revenue and net income compared to last year.

See our latest analysis for Capital Southwest.

Capital Southwest’s latest financial update comes as the stock’s share price holds steady at $20.8, capping off a period marked by modest short-term moves but solid long-term rewards. While the 1-year total shareholder return sits at just over 4%, patient investors have seen an impressive 65% three-year total return and over 117% across five years. This hints at strong long-term momentum even as day-to-day price action fluctuates with market sentiment.

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With recent growth in revenue and net income, Capital Southwest shows promise. However, with the share price close to analyst targets, is there still value to be found or has the market already factored in future gains?

Most Popular Narrative: 13% Undervalued

With Capital Southwest closing at $20.8 and a consensus fair value estimate at $24, the narrative suggests room for upside. This sets the stage for a big growth thesis built on upcoming market dynamics and company advantages.

Robust private equity relationships and increasing deal flow in the lower middle market position Capital Southwest to capture outsize share of new lending opportunities as banks retrench. This may drive future asset and revenue growth.

Read the complete narrative.

Want to know what’s fueling this bullish narrative? There is a bold assumption about soaring margins and revenue growth. Find out which future projections justify a higher price than the market sees today. Intrigued? The answers could reshape your view of what’s next for Capital Southwest.

Result: Fair Value of $24 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent competition and potential dilution from share issuances could put pressure on margins and returns, challenging the optimistic outlook for Capital Southwest.

Find out about the key risks to this Capital Southwest narrative.

Build Your Own Capital Southwest Narrative

If you think the story might be different or want to dig into the numbers yourself, it only takes a few minutes to craft your perspective. Do it your way

A great starting point for your Capital Southwest research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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