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Rand Capital (RAND)
:RAND
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Rand Capital (RAND) AI Stock Analysis

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RAND

Rand Capital

(NASDAQ:RAND)

Rating:70Outperform
Price Target:
Rand Capital's overall stock score of 70 reflects its strong balance sheet and attractive valuation, tempered by operational and cash flow volatility. The positive earnings call sentiment and strategic shifts towards income-generating investments support future growth prospects, while technical signals suggest some caution due to mixed momentum indicators.

Rand Capital (RAND) vs. SPDR S&P 500 ETF (SPY)

Rand Capital Business Overview & Revenue Model

Company DescriptionRand Capital Corporation is a business development company and regulated investment company specializing in private equity investments. The firm prefers to make investments through equity or debt instruments in lower middle market and in small to medium-sized privately held companies. It generally lends to more mature companies. The firm does not prefer to invest in real estate sector. It invests in companies that are engaged in the exploitation of new or unique products, technologies, or services. The firm invests in healthcare, consumer products, manufacturing, software, and professional services. It seeks to invest in companies based in the Western and Upstate New York region and its surrounding states with focus on Buffalo and Niagara region. The firm may invest in region within three to five hour drives from Western New York including Canada. It typically invests between $0.5 million and $1.5 million and the total investment in rounds is between $1 million and $5 million. The firm seeks to invest up to maximum of $3 million total per company as part of follow-on investments. It invest in startups and companies having annual revenue up to $10 million. It invest companies having EBITDA up to $5 million. The firm Follow-on investment(s) up to a targeted maximum of $2 million to $3 million total per company. The firm frequently participate three investment round. The firm seeks to be a lead investor in companies within its geographical area and participates in syndicate/co-invest with other investors outside it. It prefers to invest in businesses that are unique or possess proprietary right. The firm prefers to be a minority investor and seeks to take a Board seat in its portfolio companies. It typically holds its investments for a period of five to seven years. Rand Capital Corporation was founded in 1969 and is based in Buffalo, New York.
How the Company Makes MoneyRand Capital makes money primarily through the interest and dividends earned on its investment portfolio of debt and equity securities. The company generates revenue from the capital gains realized from the sale of these investments. Rand Capital strategically invests in companies with high growth potential, which allows it to benefit from the appreciation in the value of its investments. Additionally, the company may engage in partnerships with other investment firms or venture capitalists to co-invest in promising businesses, further enhancing its revenue potential. The performance of its investment portfolio, market conditions, and effective management of its investment strategies are significant factors contributing to its earnings.

Rand Capital Earnings Call Summary

Earnings Call Date:Aug 04, 2025
(Q2-2025)
|
% Change Since: -6.70%|
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed outlook. While the company maintains a strong liquidity position and continues to pay dividends, significant challenges like the Tilson Technologies bankruptcy and a decrease in total investment income have impacted overall performance.
Q2-2025 Updates
Positive Updates
Positive Net Investment Income
Net investment income was reported at $2.5 million or $0.83 per share, driven by a noncash reversal of a capital gains incentive fee.
Strong Liquidity Position
Exited the quarter with approximately $25 million in total liquidity and no outstanding bank debt, providing flexibility for future investments.
Quarterly Dividends Maintained
Declared three quarterly dividends of $0.29 per share, with increased total dollar amount paid to shareholders due to a higher number of shares outstanding.
High Yield on Debt Investments
Annualized weighted average yield on debt investments was 12.2% at quarter end, contributing to income generation.
Negative Updates
Tilson Technologies Bankruptcy
Recorded a $9.5 million reduction in the fair value of investment in Tilson Technologies due to bankruptcy filing and ongoing litigation.
Decline in Total Investment Income
Total investment income was $1.6 million, representing a 25% decrease compared to the prior year period.
Portfolio Valuation Pressure
Overall portfolio valuation decreased due to repayments and valuation adjustments, primarily affecting the professional services sector.
Company Guidance
During Rand Capital Corporation's second quarter fiscal year 2025 conference call, the company provided guidance on several key financial metrics and strategic directions. Net investment income was reported at $2.5 million or $0.83 per share, primarily influenced by a noncash reversal of a capital gains incentive fee. Total investment income reached $1.6 million, with approximately $1.2 million derived from payment-in-kind (PIK) interest, constituting about one-third of the total. The portfolio was valued at $52.4 million, with a significant reduction due to a $9.5 million valuation adjustment related to Tilson Technologies' Chapter 11 bankruptcy filing. Despite these challenges, Rand maintained its dividend strategy, declaring three quarterly dividends of $0.29 per share, and ended the quarter with $25 million in liquidity and no outstanding bank debt. The portfolio composition included 86% income-generating debt investments with an annualized weighted average yield of 12.2% and 14% equity investments. The company emphasized its focus on income generation, capital preservation, and disciplined underwriting standards to navigate the current volatile market environment.

Rand Capital Financial Statement Overview

Summary
Rand Capital's financial performance is marked by a strong balance sheet with a high equity ratio and a debt-free position. However, the volatility in income statement metrics, inconsistent revenue growth, and the negative EBIT margins reflect operational challenges. The cash flow has shown improvements, notably in free cash flow, but remains unstable, impacting overall financial health.
Income Statement
55
Neutral
Rand Capital has shown significant volatility in its income statement metrics. The gross profit margin is consistently strong due to the nature of Asset Management, but net profit margin has been erratic, with recent profitability largely driven by non-operating income. Revenue growth has been inconsistent, peaking in 2023, then declining sharply in 2024, suggesting instability in revenue streams. EBIT margins have been negative in the most recent year, reflecting operational challenges.
Balance Sheet
70
Positive
The balance sheet of Rand Capital is relatively strong, with a high equity ratio indicating financial stability. The company has a debt-free position as of 2024, reducing financial risk. However, the return on equity has been inconsistent due to fluctuating net income, which could impact future returns.
Cash Flow
65
Positive
Cash flow metrics reveal some improvements, with a positive shift in free cash flow in 2024. However, the operating cash flow to net income ratio was negative in prior years, indicating cash flow challenges. The company needs to stabilize its cash flows to ensure sustainable operations.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue5.82M19.68M7.34M5.77M20.79M3.04M
Gross Profit2.98M10.13M7.34M-2.54M15.56M2.41M
EBITDA-6.87M0.008.25M0.0085.11K-399.70K
Net Income-6.83M8.83M6.53M-881.85K15.80M743.77K
Balance Sheet
Total Assets57.64M72.46M81.02M63.48M65.64M60.97M
Cash, Cash Equivalents and Short-Term Investments4.42M834.80K3.30M4.91M833.88K20.37M
Total Debt0.00600.00K16.25M2.55M0.0010.82M
Total Liabilities925.59K7.12M20.21M5.76M51.69K14.86M
Stockholders Equity56.71M65.33M60.82M57.72M60.75M46.10M
Cash Flow
Free Cash Flow23.60M15.33M-8.34M252.37K-3.94M-616.97K
Operating Cash Flow23.97M15.33M-8.34M252.37K-3.94M-616.97K
Investing Cash Flow8.67M0.000.003.54M-10.32M-6.71M
Financing Cash Flow-21.84M-17.79M10.27M282.75K-15.59M-4.83M

Rand Capital Technical Analysis

Technical Analysis Sentiment
Negative
Last Price17.00
Price Trends
50DMA
16.75
Positive
100DMA
17.45
Negative
200DMA
18.51
Negative
Market Momentum
MACD
0.19
Positive
RSI
40.13
Neutral
STOCH
18.95
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RAND, the sentiment is Negative. The current price of 17 is below the 20-day moving average (MA) of 18.33, above the 50-day MA of 16.75, and below the 200-day MA of 18.51, indicating a neutral trend. The MACD of 0.19 indicates Positive momentum. The RSI at 40.13 is Neutral, neither overbought nor oversold. The STOCH value of 18.95 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RAND.

Rand Capital Risk Analysis

Rand Capital disclosed 2 risk factors in its most recent earnings report. Rand Capital reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Rand Capital Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
70
Outperform
$54.11M5.75-11.50%29.82%134.64%35.26%
70
Outperform
$111.07M10.846.82%16.44%-49.04%
63
Neutral
€13.39B9.505.49%3.97%13.93%9.46%
52
Neutral
$50.68M-8.58%7.55%678.57%98.81%
48
Neutral
$163.65M41.01-5.47%19.51%-37.27%-153.39%
48
Neutral
$127.14M7.0113.18%13.15%32.38%-90.38%
45
Neutral
$204.67M4.4829.40%2.97%90.08%-893.47%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
RAND
Rand Capital
17.00
0.03
0.18%
PTMN
Portman Ridge Finance
12.25
-3.82
-23.77%
SSSS
SuRo Capital
8.41
4.71
127.30%
OFS
OFS Capital
8.27
1.44
21.08%
LRFC
Logan Ridge Finance
19.08
-0.83
-4.17%
GECC
Great Elm Capital
10.95
2.27
26.15%

Rand Capital Corporate Events

Other
Rand Capital to Present Investor Slides in March 2025
Neutral
Mar 18, 2025

Rand Capital Corporation announced that it will present its investor presentation slides to analysts and investors starting March 18, 2025. These slides will be available on the company’s website but are not incorporated by reference into any registration statement or other documents filed under the Securities Act of 1933 or the Exchange Act.

DividendsBusiness Operations and StrategyFinancial Disclosures
Rand Capital Reports Strong 2024 Financial Results
Positive
Mar 10, 2025

Rand Capital reported strong financial results for 2024, with a 17% increase in investment income to $8.6 million, driven by an expanded debt investment portfolio. The company increased its regular quarterly cash dividend by 16% and declared total dividends of $5.03 per share. Rand’s strategic focus on debt investments, which now make up 75% of its portfolio, has improved yields and net interest income. The company reduced its outstanding bank debt by $15.7 million and invested nearly $14 million in income-generating investments, positioning itself for continued growth in 2025.

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: Apr 26, 2025