Value
7.7/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 8.0 |
| P/S | 8.2 |
| Fwd P/E | 9.5 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 8.8x
- ▸PEG: 0.12
- ▸Attractively valued
GSBD · Why this verdict
Why Goldman Sachs BDC (GSBD) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A forward price-to-earnings multiple of 8.5x and a PEG ratio of 0.12 represent headline valuations that screen attractively relative to the broader financial services sector, offering potential upside if earnings execution stabilizes. Valuation breakdown | Forward price-to-earnings multiple compresses below 7x as trailing earnings recover toward prior-year levels. | →Stable |
| CounterThe apparent cheapness likely reflects justified risk discounting: a severe earnings miss in the most recent quarter, revenue declining 19%, and an unsupported yield all suggest the low multiple prices in fundamental deterioration rather than unrecognized value. | ||
Free cash flow converts at 130% of net income — materially above reported earnings — indicating that cash generation from the loan portfolio is stronger than accounting figures suggest and that the business produces real economic returns even during a difficult revenue period. Quality breakdown | Free cash flow as a percentage of net income stays above 100% for at least 2 consecutive quarters. | →Stable |
| CounterElevated cash conversion in a business development company can partly reflect principal repayments on the existing loan book rather than new earnings generation; without revenue growth, the conversion rate may not persist if the portfolio shrinks. | ||
Revenue is declining 19% year-over-year — a contraction that, if sustained, will steadily erode the earnings base and challenge the business's ability to maintain both its distribution and its asset coverage ratios. Growth breakdown | This concern resolves if revenue growth turns positive and exceeds 5% year-over-year for 2 consecutive quarters. | →Stable |
| CounterBusiness development companies can experience temporary revenue contractions during periods of portfolio rotation or early loan repayments without signaling a permanent loss of earning power, and the franchise sponsor's scale may help redeploy capital into new positions. | ||
Two misses in the last four quarters — including a severe shortfall of roughly 139% below consensus in the most recent period — signal unreliable execution and make the forecast assumptions underlying current valuation multiples difficult to trust. Earnings | This concern resolves if the company delivers EPS at or above consensus for 3 of the next 4 quarters. | →Stable |
| CounterOne outsized miss can distort the impression of a multi-quarter track record; the two intervening beats show that execution is not consistently poor, and the severity of the most recent miss may partly reflect one-time credit items rather than a recurring earnings-quality problem. | ||
Despite carrying a high dividend yield, the distribution has been flagged as potentially unsafe, and a Rule of 40 score of only 9 — well below the threshold associated with a healthy balance between growth and profitability — indicates the yield is not supported by the business's current economic trajectory. Catalyst breakdown | This concern resolves if the Rule of 40 score rises above 20 for 2 consecutive reporting periods. | →Stable |
| CounterA high-yield financial vehicle structured as a business development company has mandatory distribution requirements and floating-rate loan income characteristics that make quality metrics calibrated for operating businesses less directly applicable. | ||
A forward price-to-earnings multiple of 8.5x and a PEG ratio of 0.12 represent headline valuations that screen attractively relative to the broader financial services sector, offering potential upside if earnings execution stabilizes.
→StableValuation breakdown
- Expectation
- Forward price-to-earnings multiple compresses below 7x as trailing earnings recover toward prior-year levels.
CounterThe apparent cheapness likely reflects justified risk discounting: a severe earnings miss in the most recent quarter, revenue declining 19%, and an unsupported yield all suggest the low multiple prices in fundamental deterioration rather than unrecognized value.
Free cash flow converts at 130% of net income — materially above reported earnings — indicating that cash generation from the loan portfolio is stronger than accounting figures suggest and that the business produces real economic returns even during a difficult revenue period.
→StableQuality breakdown
- Expectation
- Free cash flow as a percentage of net income stays above 100% for at least 2 consecutive quarters.
CounterElevated cash conversion in a business development company can partly reflect principal repayments on the existing loan book rather than new earnings generation; without revenue growth, the conversion rate may not persist if the portfolio shrinks.
Revenue is declining 19% year-over-year — a contraction that, if sustained, will steadily erode the earnings base and challenge the business's ability to maintain both its distribution and its asset coverage ratios.
→StableGrowth breakdown
- Expectation
- This concern resolves if revenue growth turns positive and exceeds 5% year-over-year for 2 consecutive quarters.
CounterBusiness development companies can experience temporary revenue contractions during periods of portfolio rotation or early loan repayments without signaling a permanent loss of earning power, and the franchise sponsor's scale may help redeploy capital into new positions.
Two misses in the last four quarters — including a severe shortfall of roughly 139% below consensus in the most recent period — signal unreliable execution and make the forecast assumptions underlying current valuation multiples difficult to trust.
→StableEarnings
- Expectation
- This concern resolves if the company delivers EPS at or above consensus for 3 of the next 4 quarters.
CounterOne outsized miss can distort the impression of a multi-quarter track record; the two intervening beats show that execution is not consistently poor, and the severity of the most recent miss may partly reflect one-time credit items rather than a recurring earnings-quality problem.
Despite carrying a high dividend yield, the distribution has been flagged as potentially unsafe, and a Rule of 40 score of only 9 — well below the threshold associated with a healthy balance between growth and profitability — indicates the yield is not supported by the business's current economic trajectory.
→StableCatalyst breakdown
- Expectation
- This concern resolves if the Rule of 40 score rises above 20 for 2 consecutive reporting periods.
CounterA high-yield financial vehicle structured as a business development company has mandatory distribution requirements and floating-rate loan income characteristics that make quality metrics calibrated for operating businesses less directly applicable.
TrendMatrix Research · core thesis
Engine thesis — one sentence
This business development company offers an attractively valued entry point with strong cash conversion and a cheap forward multiple, but a 19% revenue decline, inconsistent earnings execution including a severe recent miss, and a high yield that appears unsupported by fundamentals combine to create a setup where the bear case materially outweighs the valuation appeal.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.7 |
| ROA | 3.3 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 0.6 |
| FCF quality | 9.3 |
| Moat | 4.6 |
| Rule of 40 | 3.0 |
| Piotroski F | 6.7 |
- ▸Strong margins: 21%
- ▸Excellent cash conversion: 130% FCF/NI
- ▸No competitive moat
- ▸Rule of 40: 9 (fail)
Growth
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
| EPS growth | 10.0 |
- ▸Declining revenue: -19%
Momentum
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.2 |
| MACD | 8.1 |
| OBV | 10.0 |
| MA position | 7.5 |
| Volume | 2.0 |
- ▸Overbought (RSI 76)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 76 (late-cycle distribution risk)
Sentiment
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 3.9 |
| erm sentiment | 5.0 |
Insider
5.1/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.2 |
- ▸Negligible insider buying — $18,116 (0.002% of mkt cap)
Peer rank
2.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.0 |
| quality rank | 3.3 |
| growth rank | 1.0 |
Technical
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.5 |
| support resistance | 1.6 |
| 52w position | 8.7 |
Risk (lower is worse)
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.8 |
| days to cover | 2.8 |
| volatility | 7.4 |
| put call | 7.8 |
| beta | 9.2 |
| debt equity | 4.2 |
Catalyst
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 3.5 |
- ▸Earnings concerns: 2B/2M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.4>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:34d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.8=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.83
Upside
-21.3%
Downside
11.6%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($1.1B) below institutional reach
SuitabilityAggressive — MCap $1.1B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.8 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.7) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.8=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.83 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.7, Momentum at 6.4, and Risk (lower is worse) at 6.4; the weakest are Peer rank at 2.6, Catalyst at 3.4, and Technical at 3.6. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -1.83 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Headline Valuation
Trip ifForward price-to-earnings multiple rises above 15x following earnings estimate reductions.
- P2Strong Cash Conversion
Trip ifFree cash flow as a percentage of net income falls below 100% for 2 consecutive quarters.
- P3Revenue Decline Structural Risk
Trip ifRevenue growth turns positive and exceeds 5% year-over-year for 2 consecutive quarters.
- P4Inconsistent Earnings Execution
Trip ifEPS surprise stays above 0% for 3 consecutive quarters.
- P5Yield Trap Distribution Risk
Trip ifRule of 40 score rises above 20 for 2 consecutive reporting periods.