Why GSV Captial (GSVC) Is Falling Today

NEW YORK (TheStreet) -- GSV Capital (GSVC) fell 8.6% to $11.98 Friday after a disappointing fourth-quarter earnings report.

For the fourth quarter GSV Capital reported a net investment loss of 5 cents a share and a net realized loss of 61 cents a share. Analysts expected the company to announce a profit of $1.40 a share for the quarter.

The company also announced it applied to change its status to be a regulated investment company. The change would reduce the company's tax burden and let it pay out at least 90% of its taxable income to shareholders in the form of a dividend.

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TheStreet Ratings team rates GSV CAPITAL CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate GSV CAPITAL CORP (GSVC) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and impressive record of earnings per share growth. However, as a counter to these strengths, we find that revenues have generally been declining."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Powered by its strong earnings growth of 180.55% and other important driving factors, this stock has surged by 50.93% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 181.7% when compared to the same quarter one year prior, rising from -$7.00 million to $5.72 million.
  • GSV CAPITAL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GSV CAPITAL CORP reported poor results of -$1.09 versus -$0.87 in the prior year. This year, the market expects an improvement in earnings ($1.75 versus -$1.09).
  • GSVC, with its very weak revenue results, has greatly underperformed against the industry average of 17.4%. Since the same quarter one year prior, revenues plummeted by 78.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Capital Markets industry and the overall market, GSV CAPITAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: GSVC Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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