Business development company Capital Southwest (NASDAQ: CSWC) will be reporting earnings this Wednesday after market hours. Here’s what you need to know.
Capital Southwest beat analysts’ revenue expectations last quarter, reporting revenues of $61.45 million, up 18.2% year on year. It was a very strong quarter for the company, with a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.
Is Capital Southwest a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting Capital Southwest’s revenue to grow 18.6% year on year, improving from the 12.9% increase it recorded in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Capital Southwest has missed Wall Street’s revenue estimates multiple times over the last two years.
Looking at Capital Southwest’s peers in the specialty finance segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Encore Capital Group delivered year-on-year revenue growth of 21%, beating analysts’ expectations by 6.5%, and HA Sustainable Infrastructure Capital reported revenues up 31.3%, topping estimates by 43.8%. Encore Capital Group traded down 2.4% following the results while HA Sustainable Infrastructure Capital was also down 3.3%.
Read our full analysis of Encore Capital Group’s results here and HA Sustainable Infrastructure Capital’s results here.
There has been positive sentiment among investors in the specialty finance segment, with share prices up 2.4% on average over the last month. Capital Southwest is up 2.4% during the same time and is heading into earnings with an average analyst price target of $24.80 (compared to the current share price of $23.68).
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