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Netsol (NTWK)
:NTWK
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Netsol Technologies
(NASDAQ:NTWK)
55Neutral
Netsol Technologies (NTWK) vs. S&P 500 (SPY)
Market Cap
$28.07M
Dividend YieldN/A
Average Volume (3M)18.33K
Price to Earnings (P/E)39.4
Beta (1Y)0.55
Revenue Growth9.28%
EPS Growth60.89%
CountryUS
Employees1,569
SectorTechnology
Sector Strength66
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.10
Shares Outstanding11,670,015
10 Day Avg. Volume6,761
30 Day Avg. Volume18,326
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Netsol Technologies Business Overview & Revenue Model
Company DescriptionNetSol Technologies, Inc. (NTWK) is a global provider of IT and enterprise software solutions primarily for the finance and leasing industry. The company offers a comprehensive range of products and services, including its flagship NFS Ascent platform, which is designed to support the lifecycle of leasing and finance operations. With operations spanning across North America, Europe, and the Asia-Pacific region, NetSol serves a diverse portfolio of clients, including banks, leasing companies, and financial institutions.
How the Company Makes MoneyNetSol Technologies generates revenue through the sale of its enterprise software solutions, particularly within the finance and leasing sectors. The company's primary revenue streams include software licensing fees, implementation and consulting services, and maintenance and support contracts. NetSol's NFS Ascent platform is a significant contributor to its income, providing end-to-end solutions for asset finance and leasing operations. Additionally, the company benefits from long-term contracts with key clients, strategic partnerships, and its global presence in various markets, which enhances its ability to secure new business opportunities and sustain revenue growth.
Netsol Technologies Financial Statement Overview
Summary
Netsol Technologies demonstrates moderate financial health with stable revenue growth and strong cash generation capabilities. However, the company faces challenges in profitability, as evidenced by negative net profit margins and a low EBIT margin. The balance sheet is stable with a conservative leverage position, but declining stockholders' equity could pose risks. Improvements in operational efficiency and profitability are needed to enhance overall financial performance.Income Statement
Netsol Technologies showed slight revenue growth from the previous year, and the TTM report indicates a gross profit margin of approximately 47.44%. However, the company is struggling with profitability, as evidenced by the negative net profit margin of -1.34% for the TTM period. The EBIT margin is also low at 1.40%, indicating challenges in operational efficiency, though the EBITDA margin is healthier at 5.58%.―
Balance Sheet
The company has a decent equity ratio of 57.42%, signifying a stable capital structure with more than half of its assets financed by equity. However, the debt-to-equity ratio of 0.29 suggests that while the company is not heavily leveraged, the stockholders' equity has decreased over the past periods, which might impact future financial flexibility. Return on Equity is negative due to the net loss, reflecting challenges in generating returns for shareholders.60
Cash Flow
The TTM free cash flow to net income ratio is negative due to the net loss, yet the operating cash flow to net income ratio is positive at 3.22, indicating strong cash generation capability despite the lack of profitability. The company is managing its capital expenditures effectively, maintaining a positive free cash flow.―
| Breakdown | ||||
| Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 61.39M | 52.39M | 57.25M | 54.92M | 56.37M | Gross Profit |
| 29.28M | 16.92M | 23.74M | 26.35M | 26.96M | EBIT |
| 3.49M | -8.78M | -1.66M | 4.47M | 2.26M | EBITDA |
| 6.09M | 791.66K | 2.73M | 6.68M | 4.80M | Net Income Common Stockholders |
| 683.87K | -5.24M | 1.10M | 1.78M | 937.08K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 19.13M | 15.53M | 23.96M | 33.71M | 20.17M | Total Assets |
| 64.19M | 58.38M | 72.61M | 86.61M | 88.47M | Total Debt |
| 7.67M | 7.11M | 10.04M | 13.49M | 13.13M | Net Debt |
| -11.46M | -8.42M | -13.92M | -20.22M | -7.04M | Total Liabilities |
| 24.65M | 21.60M | 21.75M | 24.74M | 23.00M | Stockholders Equity |
| 34.84M | 33.81M | 45.40M | 54.65M | 58.99M |
| Cash Flow | Free Cash Flow | |||
| 2.39M | 370.13K | 451.42K | 13.17M | 2.60M | Operating Cash Flow |
| 2.91M | 2.01M | 3.06M | 15.73M | 3.97M | Investing Cash Flow |
| -291.54K | -1.40M | -2.26M | -2.52M | -2.05M | Financing Cash Flow |
| 239.55K | -718.99K | -1.38M | -1.17M | 1.70M |
Netsol Technologies Technical Analysis
Negative
2.40
Price Trends
2.39
Positive
2.52
Negative
2.68
Negative
Market Momentum
0.01
Negative
50.40
Neutral
62.50
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTWK, the sentiment is Negative. The current price of 2.4 is above the 20-day moving average (MA) of 2.36, above the 50-day MA of 2.39, and below the 200-day MA of 2.68, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 50.40 is Neutral, neither overbought nor oversold. The STOCH value of 62.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NTWK.
Netsol Technologies Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $25.25M | 49.65 | 2.53% | ― | 1.65% | 31.84% | |
60 Neutral | $10.94B | 10.48 | -7.04% | 2.99% | 7.55% | -12.20% | |
56 Neutral | $22.11M | 39.54 | 1.86% | ― | -6.15% | -36.60% | |
55 Neutral | $28.07M | 39.37 | -2.43% | ― | 9.28% | 60.89% | |
52 Neutral | $26.04M | ― | -6.35% | ― | -17.39% | -279.43% | |
52 Neutral | $25.17M | ― | -18.07% | ― | -1.72% | -1591.92% | |
50 Neutral | $25.33M | 31.58 | 2.02% | ― | -47.08% | -59.18% |
* Technology Sector Average
Performance Comparison
NTWK
Netsol Technologies
2.40
-0.06
-2.44%
KTCC
Key Tronic
2.42
-1.98
-45.00%
OCC
Optical Cable
3.07
0.27
9.64%
TRT
Trio-Tech International
5.20
-1.05
-16.80%
DTST
Data Storage
3.56
-1.96
-35.51%
HKIT
Hitek Global
1.20
-0.22
-15.49%
Netsol Technologies Earnings Call Summary
Earnings Call Date:Feb 13, 2025
(Q2-2025)
| % Change Since: -10.78%|
Next Earnings Date:May 14, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant revenue growth and strategic investments in AI, alongside strong partnerships and market interest. However, the company faced challenges with decreased license fees, operating losses, and foreign currency exchange impacts, resulting in a net loss for the quarter.Q2-2025 Updates
Positive Updates
Significant Revenue Growth
Total net revenue growth in the second fiscal quarter of 2025 was driven by a double-digit percentage increase in recurring revenues and a 26% increase in services revenues compared to the second quarter of fiscal 2024.
Strategic Investments in AI
NetSol made strategic investments in AI, positioning the company as an AI-first organization with advancements such as intelligent document processing and an interactive AI assistant.
Multimillion-Dollar Agreement with BMW Group
NetSol announced a multimillion-dollar agreement with BMW Group in the US, expanding on a relationship that dates back to 2009.
Strong Interest in Transcend Platform
The Transcend platform has gained strong interest, with integration into new customers beyond the MINI USA network and a positive response in the US market.
Increased Cash and Cash Equivalents
NetSol increased its cash and cash equivalents to approximately $21.3 million as of December 31, 2024, compared with $19.1 million at June 30, 2024.
Negative Updates
Decreased License Fees
License fees for the second quarter of fiscal 2025 were $73,000 compared with $3 million in the prior year period.
Operating Loss
Loss from operations for the second quarter of fiscal 2025 was $487,000 compared to income from operations of $1 million in the second quarter of fiscal 2024.
Net Loss Attributable to NetSol
GAAP net loss attributable to NetSol for the second quarter of fiscal 2025 totaled $1.1 million, compared with a GAAP net income of $408,000 in the second quarter of fiscal 2024.
Impact of Foreign Currency Exchange
The company experienced a loss on foreign currency exchange transactions of $690,000 compared with a loss of approximately $14,000 in the prior year period.
Company Guidance
During the fiscal second quarter of 2025 earnings call, NetSol Technologies provided guidance emphasizing their strategic focus on AI investments and their impact on future growth. The company's total net revenues reached $15.5 million, slightly up from $15.2 million in the prior year, with a notable 27% increase in recurring revenues, amounting to $8.6 million. Service revenues rose by 26% to $6.8 million. However, the quarter saw a GAAP net loss of $1.1 million, or $0.10 per diluted share, influenced by a $690,000 loss on foreign currency exchange. Despite a loss from operations of $487,000, the company remains optimistic about long-term growth, driven by their AI initiatives and strategic market expansion, particularly in North America. The balance sheet reported cash and cash equivalents of $21.3 million, with ongoing share buybacks in their subsidiary, NetSol Pakistan, aimed at increasing ownership by approximately 10%.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.