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NetCapital (NCPL)
NASDAQ:NCPL
US Market

NetCapital (NCPL) AI Stock Analysis

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NetCapital

(NASDAQ:NCPL)

Rating:54Neutral
Price Target:
$2.50
▼(-55.99%Downside)
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)

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:Mar 17, 2025
(Q3-2025)
|
% Change Since: 202.13%|
Next Earnings Date:Aug 11, 2025
Earnings Call Sentiment Negative
The earnings call reflected significant challenges with a sharp decline in revenue and increased losses. However, the approval of Netcapital Securities as a broker-dealer and new client engagement offer promising potential for future growth.
Q3-2025 Updates
Positive Updates
Broker-Dealer Subsidiary Approval
Netcapital Securities, Inc. received FINRA approval to operate as a broker-dealer, enabling the company to handle private placements of securities, support equity capital raising 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. to support a planned Regulation A offering, providing broker-dealer and administrative services.
Negative Updates
Significant Revenue Decrease
Revenues for Q3 2025 decreased by approximately 85% to $152,682 compared to $1,042,793 in Q3 2024, primarily due to the absence of consulting service revenue for equity securities.
Increased Operating and Net Losses
Operating loss for Q3 2025 was $1,687,692, up from $1,205,157 in Q3 2024. Net loss increased to approximately $3,006,537 from $2.2 million in the prior year, including a $1.3 million impairment charge.
Company Guidance
During the third quarter of fiscal 2025, Netcapital Inc. reported a significant decrease in revenues by approximately 85% to $152,682 compared to the same period in the prior year, largely due to the absence of consulting service revenue for equity securities. The company experienced an increased operating loss of $1,687,692 and a net loss of approximately $3,006,537, which includes an impairment charge of $1.3 million from a portfolio company. Despite these financial setbacks, Netcapital marked a strategic achievement with its subsidiary, Netcapital Securities, Inc., receiving FINRA approval to operate as a broker-dealer. This approval allows NSI to handle private placements, support equity capital raises under Reg A and Reg D, and partner with other broker-dealers, positioning the company for potential future growth. Looking ahead, management remains cautiously optimistic despite the uncertain market environment, as evidenced by GenOn Neuroscience, Inc.'s engagement with Netcapital Securities for upcoming Regulation A offerings.

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
35
Negative
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.
Balance Sheet
60
Neutral
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.
Cash Flow
40
Negative
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.
BreakdownTTMJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income Statement
Total Revenue812.61K4.95M8.49M5.48M4.72M1.75M
Gross Profit-125.66K4.84M8.41M5.37M3.96M1.74M
EBITDA-10.29M-7.19M2.32M-1.01M2.17M-703.49K
Net Income-10.36M-4.99M2.95M3.50M1.47M604.85K
Balance Sheet
Total Assets39.90M41.56M41.82M31.76M25.72M2.21M
Cash, Cash Equivalents and Short-Term Investments614.30K863.18K569.44K473.93K2.47M11.21K
Total Debt2.42M2.42M2.79M4.14M5.33M1.06M
Total Liabilities4.93M3.62M5.66M6.52M11.54M1.53M
Stockholders Equity34.97M37.94M36.16M25.24M14.18M679.16K
Cash Flow
Free Cash Flow-5.93M-4.88M-4.62M-3.01M-3.25M-3.60K
Operating Cash Flow-5.93M-4.88M-4.62M-3.01M-3.25M-3.60K
Investing Cash Flow0.00-20.00K200.00K-319.17K242.03K0.00
Financing Cash Flow4.37M5.19M4.51M1.33M5.47M-4.30K

NetCapital Technical Analysis

Technical Analysis Sentiment
Positive
Last Price5.68
Price Trends
50DMA
2.54
Positive
100DMA
2.26
Positive
200DMA
2.05
Positive
Market Momentum
MACD
0.72
Negative
RSI
77.08
Negative
STOCH
80.67
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NCPL, the sentiment is Positive. The current price of 5.68 is above the 20-day moving average (MA) of 3.40, above the 50-day MA of 2.54, and above the 200-day MA of 2.05, indicating a bullish trend. The MACD of 0.72 indicates Negative momentum. The RSI at 77.08 is Negative, neither overbought nor oversold. The STOCH value of 80.67 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NCPL.

NetCapital Risk Analysis

NetCapital disclosed 17 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 (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
58
Neutral
$12.55B5.32-2.71%5.27%5.88%-56.03%
54
Neutral
$12.96M-27.53%-89.47%-261.57%
47
Neutral
$9.48M-8.39%
43
Neutral
$12.74M-3.59%-7.05%-867.74%
41
Neutral
$2.20M-130.38%-123.11%56.36%
40
Underperform
$7.71M-461.16%-0.67%65.35%
38
Underperform
$17.75M22.29%-20.28%48.08%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NCPL
NetCapital
5.68
-1.36
-19.32%
GREE
Greenidge Generation Holdings
1.15
-2.03
-63.84%
ABTS
Abits Group
4.00
-4.84
-54.75%
MIGI
Mawson Infrastructure Group
0.39
-1.19
-75.32%
LGHL
Lion Group Holding
2.98
-17.54
-85.48%
MEGL
Magic Empire Global Ltd.
1.58
-0.57
-26.51%
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.Date of analysis: May 31, 2025