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NetCapital (NCPL)
NASDAQ:NCPL
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NetCapital
(NASDAQ:NCPL)
Rating:54Neutral
Price Target:
$2.50
▼(-6.72%Downside)
NetCapital (NCPL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.87M
Dividend YieldN/A
Average Volume (3M)143.13K
Price to Earnings (P/E)―
Beta (1Y)0.61
Revenue Growth-89.47%
EPS Growth-261.57%
CountryUS
Employees21
SectorFinancial
Sector Strength83
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)-1.57
Shares Outstanding2,192,046
10 Day Avg. Volume325,719
30 Day Avg. Volume143,126
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)0.11
Price to Sales (P/S)0.00
P/FCF Ratio-0.71
Enterprise Value/Market Cap1.02
Enterprise Value/Revenue0.54
Enterprise Value/Gross Profit-47.86
Enterprise Value/Ebitda-0.16
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
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:Mar 17, 2025
(Q3-2025)
| % Change Since: 42.55%|
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 is experiencing financial challenges with declining revenues and profitability. While leverage is manageable, negative cash flows and poor profitability metrics highlight potential operational and cash management issues. Strategic adjustments are needed to improve financial health.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 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 812.61K | 4.95M | 8.49M | 5.48M | 4.72M | 1.75M | Gross Profit |
| -125.66K | 4.84M | 8.41M | 5.37M | 3.96M | 1.74M | EBIT |
| -7.95M | -3.44M | 2.27M | -1.03M | -401.50K | 1.15M | EBITDA |
| -10.29M | -7.19M | 2.32M | -1.01M | 2.17M | -703.49K | Net Income Common Stockholders |
| -10.36M | -4.99M | 2.95M | 3.50M | 1.47M | 604.85K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 614.30K | 863.18K | 569.44K | 473.93K | 2.47M | 11.21K | Total Assets |
| 39.90M | 41.56M | 41.82M | 31.76M | 25.72M | 2.21M | Total Debt |
| 2.42M | 2.42M | 2.79M | 4.14M | 5.33M | 1.06M | Net Debt |
| 1.81M | 1.56M | 2.22M | 3.67M | 2.85M | 1.05M | Total Liabilities |
| 4.93M | 3.62M | 5.66M | 6.52M | 11.54M | 1.53M | Stockholders Equity |
| 34.97M | 37.94M | 36.16M | 25.24M | 14.18M | 679.16K |
| 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 Flow |
| 0.00 | -20.00K | 200.00K | -319.17K | 242.03K | 0.00 | Financing Cash Flow |
| 4.37M | 5.19M | 4.51M | 1.33M | 5.47M | -4.30K |
NetCapital Technical Analysis
Positive
2.68
Price Trends
1.99
Positive
2.00
Positive
2.01
Positive
Market Momentum
0.17
Negative
68.59
Neutral
67.10
Neutral
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 2.68 is above the 20-day moving average (MA) of 2.16, above the 50-day MA of 1.99, and above the 200-day MA of 2.01, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 68.59 is Neutral, neither overbought nor oversold. The STOCH value of 67.10 is Neutral, 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 3 New Risks
1.
Our business and operations could be negatively affected if we become subject to any securities litigation or shareholder activism, which could cause us to incur significant expense, hinder execution of business and growth strategy and impact our stock price. Q4, 2024
2.
A significant portion of our total assets are held in equity securities of early-stage companies, which securities are illiquid and subject to volatility, which factors could have a material adverse effect on our financial condition and results of operations. Q4, 2024
3.
Our financial situation creates doubt whether we will continue as a going concern. Q4, 2024
NetCapital Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | $12.85B | 9.81 | 7.59% | 16985.65% | 12.30% | -7.71% | |
54 Neutral | $5.87M | ― | -27.53% | ― | -89.47% | -261.57% | |
48 Neutral | $11.21M | ― | -461.16% | ― | -0.67% | 65.35% | |
47 Neutral | $23.31M | ― | 22.29% | ― | -20.28% | 48.08% | |
47 Neutral | $11.31M | ― | -8.39% | ― | ― | ― | |
43 Neutral | $10.08M | ― | -3.59% | ― | -7.05% | -867.74% | |
41 Neutral | $2.12M | ― | -130.38% | ― | -123.11% | 56.36% |
* Financial Sector Average
Performance Comparison
NCPL
NetCapital
2.68
-5.01
-65.15%
GREE
Greenidge Generation Holdings
1.51
-1.20
-44.28%
ABTS
Abits Group
4.77
-5.01
-51.23%
MIGI
Mawson Infrastructure Group
0.57
-0.77
-57.46%
LGHL
Lion Group Holding
2.87
-20.08
-87.49%
MEGL
Magic Empire Global Ltd.
1.25
-1.18
-48.56%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.