Is Gladstone Capital Corp. overvalued or undervalued?

As of 3 February 2021, the valuation grade for Gladstone Capital Corp. moved from risky to very attractive, indicating a significant improvement in its investment appeal. The company appears undervalued, supported by a P/E ratio of 7, a Price to Book Value of 1.23, and a PEG ratio of 0.05, all suggesting that the stock is trading at a discount relative to its earnings and growth potential.
In comparison to its peers, Gladstone Capital Corp. has a lower P/E ratio than Fidus Investment Corp. at 9.59 and Gladstone Investment Corp. at 6.80, which further reinforces its undervaluation. Additionally, the company has a compelling dividend yield of 16.07% and a strong ROCE of 22.58%. Despite recent stock performance showing a decline of 17.12% year-to-date compared to a 12.22% gain in the S&P 500, the long-term returns over 3 years and 5 years of 21.37% and 53.65%, respectively, indicate potential for recovery and growth.