Head to Head Analysis: Netcapital (NASDAQ:NCPL) and Iris Energy (NASDAQ:IREN)

Netcapital (NASDAQ:NCPL) and Iris Energy (NASDAQ:IREN) are both small-cap business services companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Netcapital and Iris Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Netcapital	0	0	0	0	N/A
Iris Energy	0	1	9	1	3.00

Iris Energy has a consensus target price of $15.44, indicating a potential upside of 77.93%. Given Iris Energy’s higher possible upside, analysts clearly believe Iris Energy is more favorable than Netcapital.

Valuation & Earnings

This table compares Netcapital and Iris Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Netcapital	$3.57 million	8.79	-$4.99 million	($0.05)	-31.40
Iris Energy	$188.76 million	6.74	-$28.95 million	N/A	N/A

Netcapital has higher earnings, but lower revenue than Iris Energy.

Risk and Volatility

Netcapital has a beta of -0.6, indicating that its share price is 160% less volatile than the S&P 500. Comparatively, Iris Energy has a beta of 3.41, indicating that its share price is 241% more volatile than the S&P 500.

Profitability

This table compares Netcapital and Iris Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Netcapital	-196.48%	-18.14%	-16.35%
Iris Energy	N/A	N/A	N/A

Insider and Institutional Ownership

30.7% of Netcapital shares are held by institutional investors. Comparatively, 41.1% of Iris Energy shares are held by institutional investors. 7.8% of Netcapital shares are held by insiders. Comparatively, 21.5% of Iris Energy shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Iris Energy beats Netcapital on 10 of the 12 factors compared between the two stocks.

About Netcapital

Netcapital 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. The company also provides various services, including automated onboarding process and filing of required regulatory documents; compliance review; custom-built offering page on its portal website; third party transfer agent and custodial services; and rolling closes which provides access to liquidity before final close date of offerings, as well as assistance with annual fillings and direct access to team for ongoing support. In addition, it offers advisor services, which includes incubation of technology start-ups; investors introduction; online marketing; website design and software development; message crafting including pitch decks, offering pages, and ad creation; strategic advice; and technology consulting services. Further, the company provides valuation services, such as business valuation, fairness and solvency opinions, ESOP feasibility and valuation, non-cash charitable contribution, economic analysis of damages, intellectual property appraisals, and compensation studies. Netcapital Inc. is based in Boston, Massachusetts.

About Iris Energy

Iris Energy Limited owns and operates bitcoin mining data centers. The company was incorporated in 2018 and is headquartered in Sydney, Australia.