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U.s. Global Investors (GROW)
NASDAQ:GROW
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US Global Investors
(NASDAQ:GROW)
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Rating:62Neutral
Price Target:
$3.50
▲(44.03% Upside)
Action:ReiteratedDate:02/24/26
The score reflects strong technical momentum and a positive earnings-call outlook supported by substantial liquidity and shareholder returns, tempered by weak recent cash generation and compressed/volatile operating performance. A high P/E multiple further constrains the overall rating.
US Global Investors (GROW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$42.05M
Dividend Yield3.73%
Average Volume (3M)49.40K
Price to Earnings (P/E)500.0
Beta (1Y)0.49
Revenue Growth115.35%
EPS Growth-48.45%
CountryUS
Employees23
SectorN/A
Sector StrengthN/A
IndustryAsset Management - Global
Share Statistics
EPS (TTM)-0.07
Shares Outstanding10,484,211
10 Day Avg. Volume55,431
30 Day Avg. Volume49,401
Financial Highlights & Ratios
PEG Ratio0.82
Price to Book (P/B)0.77
Price to Sales (P/S)4.10
P/FCF Ratio-41.85
Enterprise Value/Market Cap0.44
Enterprise Value/Revenue2.09
Enterprise Value/Gross Profit4.93
Enterprise Value/Ebitda10.02
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
US Global Investors Business Overview & Revenue Model
Company DescriptionUS Global Investors (GROW) is a publicly traded investment management firm based in San Antonio, Texas, specializing in global investment strategies. The company offers a range of mutual funds and exchange-traded funds (ETFs) focused on sectors such as natural resources, emerging markets, and global equities. With a commitment to providing innovative investment solutions, US Global Investors aims to serve both individual and institutional investors by delivering performance-driven products and services.
How the Company Makes MoneyUS Global Investors generates revenue primarily through management fees charged on assets under management (AUM) in its mutual funds and ETFs. These fees are typically calculated as a percentage of AUM and vary based on the specific fund and its investment strategy. Additionally, the company may earn performance fees if certain funds exceed benchmark performance targets. Other revenue streams include service fees from investment advisory services, distribution fees, and potential partnerships with financial institutions for fund distribution. The firm’s ability to attract and retain investors, particularly in its niche sectors, plays a significant role in influencing its revenue.
US Global Investors Earnings Call Summary
Earnings Call Date:Feb 20, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:May 11, 2026
Earnings Call Sentiment Positive
The call presented a mix of operational and strategic positives — revenue growth (+13% YoY), improving operating efficiency, stronger liquidity (cash $25.2M) and successful thematic product performance (WAR ETF +24% vs market +12%), plus an active buyback program reducing outstanding shares ~10% over 18 months. Offsetting these strengths were GAAP headwinds including a quarter tax adjustment that drove a $846k net loss, the loss of an 8% interest coupon from the repaid HIVE note, and continued volatility/scale challenges in certain ETF strategies (e.g., Jets). Management expects the tax impact to reverse in the next quarter and emphasized strategic initiatives (smart beta 2.0, ETF scale targets, thematic focus) that, if realized, could materially improve profitability. Overall, the positives in product traction, revenue growth, balance sheet strength and shareholder returns currently outweigh the near-term accounting and income headwinds.Q2-2026 Updates
Positive Updates
Increasing Assets Under Management (AUM)
Average AUM reported at $1.48 billion for the period with CEO commentary that AUM has risen to approximately $1.7 billion as of the webcast — reflecting recovery from prior quarters and improved asset inflows.
Quarterly Revenue Growth
Quarterly operating revenues of $2.5 million, an increase of $279,000 or 13% versus the same quarter last year, driven primarily by higher mutual fund AUM (notably equity mutual funds).
Improved Operating Efficiency
Operating expenses decreased $172,000 or 6% year-over-year; general & administrative expenses down $207,000 or 15%, partially offset by a 4% increase in employee compensation (+$45,000) due to performance bonuses.
Profitability Momentum (EBITDA)
Quarterly EBITDA per share turned positive after prior negativity — year-end December figure reported at $0.04 per share, and pretax income of $535,000 for the quarter, indicating improving core profitability trends.
Strong Balance Sheet and Liquidity
Cash and cash equivalents of approximately $25.2 million as of December 31, 2025 (up ~3% vs June 2025), current investments of $9.2 million, other investments ~$6.5 million, net working capital of $36.7 million and a current ratio of 19.4:1.
Active Share Repurchase Program and High Shareholder Yield
Repurchased 260,195 Class A shares for roughly $664,000 in the quarter ended Dec 31, 2025; shares outstanding have been reduced by about 10% over the past 18 months. Gross shareholder yield of 9.89% compares favorably to 10-year and 5-year government yields of 4.18% and 3.73% respectively.
Strong Thematic Product Performance — 'War' ETF
The newly launched WAR ETF outperformed the market last year, returning ~24% versus ~12% for the broader market (outperformance ≈12 percentage points), demonstrating thematic product traction.
Strategic Positioning and Scale Targets for ETFs
Clear product economics: at a 60 bps fee an ETF needs roughly $50 million AUM to breakeven on core financial costs, ~$80 million to cover additional portfolio/marketing costs and ~$100 million to become strongly profitable. Management articulated a target to scale GOAU and other thematic ETFs (e.g., ambition to build GOAU toward $10 billion).
Favorable Non-Operational Items vs Prior Year
Other income improved year-over-year: unrealized gains moved to $28,000 from prior-year unrealized losses of $221,000 (favorable change ~$249,000); realized foreign currency gains $57,000 vs prior losses of $239,000 (favorable change ~$296,000).
Negative Updates
GAAP Net Loss and Large Tax Adjustment
Net loss after taxes for the quarter was $846,000 (−$0.07 per share), an unfavorable change of $760,000 versus the prior-year quarter. The primary driver was a tax accounting treatment adjustment of approximately $1.3 million recorded this quarter; management expects an offsetting benefit in the quarter ending Mar 31, 2026 and a net tax expense of ~0 for the fiscal year.
Loss of Interest / Yield from HIVE Convertible Repayment
Repayment of the HIVE convertible note removed an 8% coupon income stream, resulting in lower interest and realized gains; management has redeployed proceeds into other income-generating assets but the immediate effect reduced interest-related income.
Segment/AUM Volatility — Jets ETF Pressure
Decrease in Jets ETF assets contributed to partial offset of fund revenue growth; management noted continued volatility across thematic products and some net redemptions in actively managed mutual funds versus ETF trends.
Quarterly Operating Loss (Timing & GAAP Effects)
Operating loss for the quarter of $88,000 (albeit a favorable $451,000 change vs prior year) and prior swings in earnings tied to audit/accounting treatments (previous auditors' adjustments) created reported volatility in GAAP earnings across recent quarters.
Product Scale Challenge for ETFs
Management reiterated that new ETFs require significant scale to be profitable (need ~$50–100 million per product). Achieving this scale is a continuing business challenge in a crowded ETF market despite favorable industry inflows.
Company Guidance
The call’s guidance centered on growing AUM and profitability while returning capital: ETFs carry a 60 bps fee (active funds roughly double with a 12b‑1), management says ~$50M AUM is needed to breakeven on basic financial costs, ~$80M to cover broader costs, and ~$100M to be comfortably profitable, with an aspirational GOAU target of $10B; average AUM was $1.48B (recently rising from $1.26B to ≈$1.7B) and quarterly operating revenues were $2.5M with pretax income of $535k. Capital return activity continues via an algorithmic buyback (260,195 Class A shares repurchased for ≈$664k in the quarter; ~10% fewer shares outstanding over 18 months) and a monthly dividend program (gross shareholder yield 9.89% vs 10‑yr/5‑yr Treasuries at 4.18%/3.73%); liquidity includes cash ≈$25.2M, current investments $9.2M, other investments ≈$6.5M, net working capital $36.7M and a current ratio of 19.4:1. Operational trends showed operating revenues up 13% YoY (+$279k), operating expenses down 6% (‑$172k), an $88k operating loss (favorable change $451k), EBITDA per share turning positive (Dec $0.04), but a GAAP net loss of $846k (‑$0.07/sh) driven by a ~$1.3M tax adjustment expected to reverse in the March quarter. Broader industry context cited record ETF inflows of nearly $1.5T in 2025, covered‑write yields of ~12% (gold) and 24–30% (Bitcoin), repayment of an 8% HIVE convertible note, and strong performance in thematic products (WAR ETF +24% vs market +12% last year).US Global Investors Financial Statement Overview
Summary
Financials are mixed: a very strong, low-debt balance sheet supports resilience, but the income statement shows materially lower revenue versus prior years and inconsistent profitability. The biggest near-term concern is cash flow, with operating cash flow and free cash flow still negative in the TTM period despite early signs of stabilization in net income.Income Statement
Revenue has been volatile and materially lower versus prior years (down from $24.7M in 2022 to $8.45M in 2025 annual), though TTM (Trailing-Twelve-Months) shows a small rebound (+3.3% revenue growth) and a return to slightly positive net income. Profitability has compressed sharply: gross margin is still reasonable in TTM (~42%) but well below the 2022–2023 levels, and recent operating results have been inconsistent (annual 2025 net loss and negative operating profit, followed by near-breakeven TTM). Overall, the income statement reflects weakening scale and margin pressure with only early signs of stabilization.48
Neutral
Balance Sheet
The balance sheet is a clear strength: leverage is extremely low (debt-to-equity ~0.2%–0.4% across periods) and equity remains substantial (~$44–$54M) versus assets (~$47–$62M). This provides meaningful financial flexibility and limits solvency risk. The primary weakness is muted and volatile returns for shareholders recently, with return on equity slipping to negative in 2025 annual and only modestly positive in TTM, reflecting pressure from lower profitability rather than balance sheet stress.86
Very Positive
Cash Flow
Cash generation has deteriorated materially: operating cash flow turned negative in 2025 annual (-$0.82M) and remains slightly negative in TTM (-$0.22M), with free cash flow also negative in both periods. This contrasts with strong cash generation in 2021–2023 and positive (but smaller) free cash flow in 2024. The key risk is the recent shift to cash burn, which—if sustained—would reduce flexibility despite the currently strong balance sheet.33
Negative
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US Global Investors Technical Analysis
Positive
2.43
Price Trends
2.79
Positive
2.63
Positive
2.50
Positive
Market Momentum
0.14
Positive
66.82
Neutral
85.60
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GROW, the sentiment is Positive. The current price of 2.43 is below the 20-day moving average (MA) of 3.22, below the 50-day MA of 2.79, and below the 200-day MA of 2.50, indicating a bullish trend. The MACD of 0.14 indicates Positive momentum. The RSI at 66.82 is Neutral, neither overbought nor oversold. The STOCH value of 85.60 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GROW.
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.