Since March 2025, Capital Southwest has been in a holding pattern, posting a small return of 3.1% while floating around $22.94. The stock also fell short of the S&P 500’s 17.7% gain during that period.
Is now the time to buy Capital Southwest, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free.
Why Is Capital Southwest Not Exciting?
We're sitting this one out for now. Here is one reason there are better opportunities than CSWC and a stock we'd rather own.
EPS Barely Growing
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Capital Southwest’s EPS grew at an unimpressive 9.7% compounded annual growth rate over the last five years, lower than its 27.8% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.
Final Judgment
Capital Southwest isn’t a terrible business, but it isn’t one of our picks. With its shares lagging the market recently, the stock trades at 9.8× forward P/E (or $22.94 per share). While this valuation is optically cheap, the potential downside is big given its shaky fundamentals. We're fairly confident there are better stocks to buy right now. Let us point you toward one of our all-time favorite software stocks.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
