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NetCapital (NCPL)
NASDAQ:NCPL
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NetCapital
(NASDAQ:NCPL)
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Rating:54Neutral
Price Target:
$2.50
▲(3.31% Upside)
NetCapital's overall score reflects significant financial challenges with declining revenues and profitability. Despite positive technical indicators, the company's current valuation is poor due to unprofitability. However, potential future growth opportunities from newly acquired broker-dealer capabilities and new client engagements provide some optimism.
NetCapital (NCPL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.42M
Dividend YieldN/A
Average Volume (3M)232.91K
Price to Earnings (P/E)―
Beta (1Y)0.80
Revenue Growth-82.44%
EPS Growth22.28%
CountryUS
Employees21
SectorFinancial
Sector Strength70
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)-11.38
Shares Outstanding4,720,056
10 Day Avg. Volume178,193
30 Day Avg. Volume232,909
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.60
Enterprise Value/Revenue7.85
Enterprise Value/Gross Profit351.69
Enterprise Value/Ebitda-0.24
Forecast
1Y Price Target
$2.50Price Target Upside3.31% Upside
Rating ConsensusHold
Number of Analyst Covering0
NetCapital Business Overview & Revenue Model
Company DescriptionNetcapital Inc. operates as a fintech company. It offers Netcapital.com, an SEC-registered funding portal that enables private companies to raise capital online, as well as allows investors to invest from anywhere in the world. It also provides various services, including a fully automated onboarding process; automated filing of required regulatory documents; compliance review; custom-built offering page on its portal website; third party transfer agent and custodial services; email marketing to its proprietary list of investors; rolling closes, which provide potential access to liquidity before final close date of offering; assistance with annual filings; and ongoing support services. In addition, the company offers advisory services, such as incubation of technology start-ups; investor introduction; digital marketing; website design, software, and software development; message crafting, including pitch decks, offering pages, and ad creation; strategic advice; and technology consulting services. Further, it provides business valuations; fairness and solvency opinions; ESOP feasibility and valuation; non-cash charitable contributions; economic analysis of damages; intellectual property appraisals; and compensation studies. Netcapital Inc. was incorporated in 1984 and is based in Boston, Massachusetts. Netcapital Inc. is a subsidiary of NetCapital Systems LLC.
How the Company Makes MoneyNetCapital makes money through transaction fees and service charges on its platform. The company earns revenue by charging a percentage fee on the total capital raised by startups using its platform to conduct equity crowdfunding campaigns. Additionally, NetCapital may offer premium services or support to entrepreneurs for a fee, enhancing their campaigns' visibility and success. The company's revenue model is reliant on the volume and success rate of the campaigns hosted on its platform, as well as the overall growth and interest in equity crowdfunding as an alternative investment and fundraising method.
NetCapital Earnings Call Summary
Earnings Call Date:Aug 12, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Sep 10, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant challenges, including a drastic revenue decline and increased losses. However, approval for their broker-dealer subsidiary represents a strategic success and potential for future revenue diversification. The sentiment is balanced between strategic achievements and immediate financial setbacks.Q3-2025 Updates
Positive Updates
Broker-Dealer Subsidiary Approval
Netcapital Securities, Inc. received FINRA approval to operate as a broker-dealer. This allows them to handle private placements, support equity capital raises under Reg A and Reg D, and partner with other broker-dealers.
Engagement with GenOn Neuroscience, Inc.
Netcapital Securities was engaged by GenOn Neuroscience, Inc. for a planned Regulation A offering, providing broker-dealer and administrative services.
Negative Updates
Significant Revenue Decline
Revenues for Q3 2025 decreased by approximately 85% to $152,682 compared to the same period in 2024, primarily due to the lack of consulting service revenue for equity securities.
Increased Operating Loss
The company reported an operating loss of $1,687,692 for Q3 2025, compared to an operating loss of $1,205,157 for Q3 2024.
Net Loss and Impairment Charge
Net loss for Q3 2025 was approximately $3,006,537 compared to a net loss of approximately $2.2 million in the prior year, including an impairment charge of $1.3 million for a portfolio company.
Company Guidance
During the third quarter of fiscal 2025, Netcapital Inc. reported a significant decrease in revenue, dropping by approximately 85% to $152,682 compared to $1,042,793 in the same period the previous year. The decline was primarily due to the absence of consulting service revenue for equity securities, which had contributed $862,346 in Q3 2024. The company reported an operating loss of $1,687,692, an increase from the $1,205,157 loss reported in the third quarter of fiscal 2024. Additionally, Netcapital experienced a net loss of approximately $3,006,537, up from a $2.2 million loss in the prior year, with a net loss per share of $1.57 EPS compared to a $13.60 loss per share previously. The quarter's results were affected by a $1.3 million impairment charge from one of their portfolio companies. Despite these challenges, the company successfully gained FINRA approval for its broker-dealer subsidiary, Netcapital Securities, Inc., and is optimistic about its future revenue potential through new services like handling private placements, supporting equity capital raises under Reg A and Reg D, and partnering with other broker-dealers.NetCapital Financial Statement Overview
Summary
NetCapital faces financial challenges with declining revenues and negative profitability metrics. While leverage is manageable, negative cash flows and poor profitability indicate operational and cash management issues.Income Statement
NetCapital shows significant revenue volatility with a sharp decline in the TTM period. The gross profit margin is negative, indicating cost issues. The net profit margin is also negative, pointing to poor profitability. Both EBIT and EBITDA margins are negative, reflecting operational challenges.35
Negative
Balance Sheet
The company has a low debt-to-equity ratio, suggesting manageable leverage. However, the decline in stockholders' equity and assets could pose risks. The equity ratio is healthy, showing a strong equity foundation relative to total assets.60
Neutral
Cash Flow
Operating cash flow remains negative, indicating cash management issues. Free cash flow is also negative, although there is some improvement in financing cash flow. The free cash flow to net income ratio is concerning given the negative values.40
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 869.46K | 869.46K | 4.95M | 8.49M | 5.48M | 4.72M |
| Gross Profit | 19.40K | 829.12K | 4.84M | 8.41M | 5.37M | 3.96M |
| EBITDA | -28.22M | -28.22M | -7.19M | 4.00M | 4.17M | 2.17M |
| Net Income | -28.30M | -28.30M | -4.99M | 2.95M | 3.50M | 1.47M |
Balance Sheet | ||||||
| Total Assets | 20.90M | 20.90M | 41.56M | 41.82M | 31.76M | 25.72M |
| Cash, Cash Equivalents and Short-Term Investments | 289.43K | 289.43K | 863.18K | 569.44K | 473.93K | 2.47M |
| Total Debt | 2.68M | 2.68M | 2.42M | 2.79M | 4.14M | 5.33M |
| Total Liabilities | 6.00M | 6.00M | 3.62M | 5.66M | 6.52M | 11.54M |
| Stockholders Equity | 14.91M | 14.91M | 37.94M | 36.16M | 25.24M | 14.18M |
Cash Flow | ||||||
| Free Cash Flow | -5.34M | -5.34M | -4.88M | -4.62M | -3.01M | -3.25M |
| Operating Cash Flow | -5.34M | -5.34M | -4.88M | -4.62M | -3.01M | -3.25M |
| Investing Cash Flow | -5.00 | 0.00 | -20.00K | 200.00K | -319.17K | 242.03K |
| Financing Cash Flow | 4.77M | 4.77M | 5.19M | 4.51M | 1.33M | 5.47M |
NetCapital Technical Analysis
Neutral
2.42
Price Trends
2.72
Negative
3.05
Negative
2.51
Negative
Market Momentum
-0.09
Negative
51.92
Neutral
74.02
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NCPL, the sentiment is Neutral. The current price of 2.42 is above the 20-day moving average (MA) of 2.15, below the 50-day MA of 2.72, and below the 200-day MA of 2.51, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 51.92 is Neutral, neither overbought nor oversold. The STOCH value of 74.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NCPL.
NetCapital Risk Analysis
NetCapital disclosed 12 risk factors in its most recent earnings report. NetCapital reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
NetCapital Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
54 Neutral | $11.42M | ― | -107.11% | ― | -82.44% | 22.28% | |
47 Neutral | 17.36M | -13.88 | 0.00% | ― | 31.69% | 86.25% | |
43 Neutral | 12.58M | -13.00 | 0.00% | ― | -7.05% | -875.61% | |
41 Neutral | 25.55M | -1.04 | 35.49% | ― | -18.74% | 0.00% | |
39 Underperform | 8.37M | -0.31 | 300.74% | ― | -11.36% | 64.27% | |
39 Underperform | 1.09M | -0.01 | -260.46% | ― | -123.11% | 56.36% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
Performance Comparison
NCPL
NetCapital
2.42
0.69
39.88%
GREE
Greenidge Generation Holdings
1.63
-0.14
-7.91%
ABTS
Abits Group
7.32
-0.03
-0.41%
MIGI
Mawson Infrastructure Group
0.40
-0.77
-65.81%
LGHL
Lion Group Holding
1.48
-10.28
-87.41%
MEGL
Magic Empire Global Ltd.
1.56
-0.26
-14.29%
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.