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Netsol Technologies Inc (NTWK)
NASDAQ:NTWK
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Netsol Technologies
(NASDAQ:NTWK)
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Rating:67Neutral
Price Target:
$4.50
▼(-5.06% Downside)
Netsol Technologies' stock is driven by strong technical momentum and solid financial performance in terms of revenue growth and cash flow. However, a very high P/E ratio suggests overvaluation, which is a significant risk. The lack of recent earnings call data and corporate events limits further insights.
Netsol Technologies (NTWK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$55.50M
Dividend YieldN/A
Average Volume (3M)124.72K
Price to Earnings (P/E)226.8
Beta (1Y)0.68
Revenue Growth9.18%
EPS GrowthN/A
CountryUS
Employees1,569
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.22
Shares Outstanding11,709,543
10 Day Avg. Volume73,559
30 Day Avg. Volume124,722
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.40
Enterprise Value/Revenue0.35
Enterprise Value/Gross Profit0.73
Enterprise Value/Ebitda4.27
Forecast
1Y Price Target
$4.50Price Target Upside-5.06% Downside
Rating ConsensusHold
Number of Analyst Covering1
Netsol Technologies Business Overview & Revenue Model
Company DescriptionNetSol Technologies, Inc. designs, develops, markets, and exports software products to the automobile financing and leasing, banking, and financial services industries worldwide. The company offers NFS Ascent, a suite of financial applications for businesses in the finance and leasing industry. Its NFS Ascent constituent applications include Omni Point of Sale, a web-based application; Contract Management System (CMS), an application for managing and maintaining credit contracts; Wholesale Finance System (WFS), a system for automating and managing the lifecycle of wholesale finance; Dealer Auditor Access System, a web-based solution that could be used in conjunction with WFS or any third-party wholesale finance system; NFS Ascent On The Cloud, a cloud-version of NFS Ascent; and NFS Digital solutions covering Self Point of Sale, Mobile Account, Mobile Point of Sale, Mobile Dealer, Mobile Auditor, Mobile Collector, and Mobile Field Investigator. The company also provides Otoz Digital Auto-Retail, a white-labelled SaaS platform; Otoz Ecosystem, an API-based architecture; and Otoz Platform, a white label platform, which includes Dealer Tool and Customer App portals. In addition, it offers system integration, consulting, and IT products and services. It serves blue chip organizations, Dow-Jones 30 Industrials, Fortune 500 manufacturers and financial institutions, vehicle manufacturers, and enterprise technology providers. The company was incorporated in 1997 and is headquartered in Calabasas, California.
How the Company Makes MoneyNetSol Technologies generates revenue primarily through the sale and licensing of its software products, including the NetSol Financial Suite. The company charges upfront fees for software licenses and also earns recurring income from maintenance and support services. Additionally, NetSol provides IT consulting services, which contribute to its revenue streams. The company has established strategic partnerships with various financial institutions and leasing companies, which play a significant role in expanding its client base and driving sales. Custom software development and implementation projects tailored to specific client needs also add to the company's earnings.
Netsol Technologies Earnings Call Summary
Earnings Call Date:Sep 29, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Neutral
The earnings call indicates a mixed performance with significant growth in recurring revenues and strategic partnerships, driven by AI advancements. However, this is offset by declines in license fees, increased operating expenses, and a net loss for the quarter.Q2-2025 Updates
Positive Updates
Significant Growth in Recurring Revenues
The company achieved a 27% increase in recurring revenues compared to the prior year period, with a notable contribution from a one-time catch-up of approximately $1 million.
Expansion of Strategic Partnerships
NetSol announced a multimillion-dollar agreement with BMW Group in the US and expanded its relationship with a leading automotive finance in China.
AI Initiatives and Innovations
NetSol continues to advance its AI initiatives with the establishment of Transcend AI Labs and the rollout of AI enhancements such as intelligent document processing and an interactive AI assistant.
Increase in Services Revenue
Services revenue increased by 26% compared to the prior year period, driven by strategic investments and business expansion.
Strong Cash Position
The company increased its cash and cash equivalents to approximately $21.3 million as of December 31, 2024.
Negative Updates
Decline in License Fees
License fees for the second quarter of fiscal 2025 were $73,000 compared to $3 million in the prior year period, indicating a significant decrease.
Increased Operating Expenses
Operating expenses for the second quarter of fiscal 2025 were $7.4 million, or 48% of sales, compared to $6.1 million, or 40% of sales, in the same period last year.
Net Loss for the Quarter
The GAAP net loss attributable to NetSol for the second quarter of fiscal 2025 was $1.1 million, compared to a GAAP net income of $408,000 in the prior year period.
Loss from Operations
The company reported a loss from operations of $487,000 compared to income from operations of $1 million in the second quarter of fiscal 2024.
Impact of Foreign Currency Exchange
A loss on foreign currency exchange transactions of $690,000 was reported, compared to a loss of approximately $14,000 in the prior year period.
Company Guidance
During the Fiscal Second Quarter 2025 earnings call, NetSol Technologies reported a 26% increase in services revenue compared to the same period in 2024, with total net revenues reaching $15.5 million. Recurring revenues saw a significant rise of 27%, amounting to $8.6 million, which included a one-time catch-up of approximately $1 million. The company emphasized its strategic investments in AI, with advancements in their Transcend AI Labs and the integration of AI capabilities across their product offerings. Operating expenses increased to $7.4 million, leading to a GAAP net loss of $1.1 million, or $0.10 per diluted share. The company also highlighted a multimillion-dollar agreement with BMW Group, reflecting strong market interest, particularly in the APAC region and Europe. Additionally, NetSol's subsidiary in Pakistan is undergoing a share buyback, potentially increasing NetSol's ownership by 10%. Despite current losses, NetSol remains optimistic about long-term growth, driven by strategic investments and a focus on increasing recurring revenue streams.Netsol Technologies Financial Statement Overview
Summary
Netsol Technologies exhibits steady revenue growth and strong cash flow generation, which are positive indicators for future performance. However, profitability remains an area of concern due to increased operating expenses and lower margins. The balance sheet is stable, though a rising debt-to-equity ratio warrants monitoring.Income Statement
Netsol Technologies shows a steady growth trajectory with a TTM revenue of $64.1M, a 4.5% increase from the previous year. The gross profit margin has improved to 47.9% from 45.6% a year ago, indicating better cost management. However, the net profit margin remains low at 0.4% due to increased operating expenses. EBIT and EBITDA margins have declined, suggesting pressure on core operational profitability.72
Positive
Balance Sheet
The company maintains a solid equity base with an equity ratio of 60.9%, reflecting financial stability. However, the debt-to-equity ratio has increased to 0.27, indicating a slight rise in leverage. Return on equity has dropped to 0.7%, pointing to challenges in generating returns for shareholders.65
Positive
Cash Flow
Netsol's cash flow performance is strong, with a significant increase in operating cash flow to $6.5M. Free cash flow has more than doubled year-over-year, showcasing improved cash generation capacity. The operating cash flow to net income ratio is robust at 24.6, highlighting effective cash management practices.78
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 64.13M | 61.39M | 52.39M | 57.25M | 54.92M | 56.37M |
| Gross Profit | 30.70M | 29.28M | 16.92M | 23.74M | 25.39M | 26.96M |
| EBITDA | 5.24M | 6.09M | 791.66K | 6.27M | 7.64M | 4.80M |
| Net Income | 264.84K | 683.87K | -5.24M | -851.16K | 1.78M | 937.08K |
Balance Sheet | ||||||
| Total Assets | 58.14M | 64.19M | 58.38M | 72.61M | 86.61M | 88.47M |
| Cash, Cash Equivalents and Short-Term Investments | 18.77M | 19.13M | 15.53M | 23.96M | 33.71M | 20.17M |
| Total Debt | 9.45M | 7.67M | 7.11M | 10.04M | 13.49M | 13.13M |
| Total Liabilities | 19.25M | 24.65M | 21.60M | 21.75M | 24.74M | 23.00M |
| Stockholders Equity | 35.45M | 34.84M | 33.81M | 45.40M | 54.65M | 58.99M |
Cash Flow | ||||||
| Free Cash Flow | 6.05M | 2.39M | 370.13K | 451.42K | 13.17M | 2.60M |
| Operating Cash Flow | 6.52M | 2.91M | 2.01M | 3.06M | 15.73M | 3.97M |
| Investing Cash Flow | -312.13K | -291.54K | -1.40M | -2.26M | -2.52M | -2.05M |
| Financing Cash Flow | 1.07M | 239.55K | -718.99K | -1.38M | -1.17M | 1.70M |
Netsol Technologies Technical Analysis
Positive
4.74
Price Trends
4.29
Positive
3.64
Positive
3.08
Positive
Market Momentum
0.17
Positive
56.54
Neutral
16.21
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTWK, the sentiment is Positive. The current price of 4.74 is above the 20-day moving average (MA) of 4.53, above the 50-day MA of 4.29, and above the 200-day MA of 3.08, indicating a bullish trend. The MACD of 0.17 indicates Positive momentum. The RSI at 56.54 is Neutral, neither overbought nor oversold. The STOCH value of 16.21 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NTWK.
Netsol Technologies Risk Analysis
Netsol Technologies disclosed 3 risk factors in its most recent earnings report. Netsol Technologies reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
Netsol Technologies Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $70.49M | 35.33 | 20.52% | ― | -0.45% | -1.40% | |
67 Neutral | $55.50M | 226.79 | 0.75% | ― | 9.18% | ― | |
55 Neutral | $53.71M | -9.35 | -14.34% | ― | -17.18% | -9.69% | |
45 Neutral | $39.98M | >-0.01 | -65.23% | ― | 445.29% | 87.35% | |
37 Underperform | $55.92M | -3.85 | ― | ― | ― | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
NTWK
Netsol Technologies
4.74
1.89
66.32%
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2.52
0.65
34.76%
WFCF
Where Food Comes From
13.64
2.86
26.53%
PHUN
Phunware
2.77
-0.65
-19.01%
NUKK
Nukkleus
6.29
3.97
171.12%
CYN
Cyngn
5.68
-577.82
-99.03%
Netsol Technologies Corporate Events
Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
NetSol Technologies Approves Key Proposals at Shareholder Meeting
Neutral
Jun 25, 2025
On June 24, 2025, NetSol Technologies held its annual meeting of shareholders, where several key proposals were voted upon. The shareholders elected directors, approved executive compensation, ratified the appointment of Fortune CPA, Inc. as auditors, and approved amendments to increase the number of authorized shares. Additionally, the adoption of the 2025 Equity Incentive Plan was narrowly approved. These decisions are pivotal for the company’s governance and future strategic initiatives.
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.