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Netsol (NTWK)
:NTWK
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Netsol Technologies
(NASDAQ:NTWK)
Rating:68Neutral
Price Target:
$3.00
▲(6.01%Upside)
Netsol Technologies (NTWK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$33.14M
Dividend YieldN/A
Average Volume (3M)17.71K
Price to Earnings (P/E)135.4
Beta (1Y)0.70
Revenue Growth9.18%
EPS GrowthN/A
CountryUS
Employees1,569
SectorTechnology
Sector Strength79
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.12
Shares Outstanding11,709,543
10 Day Avg. Volume11,240
30 Day Avg. Volume17,709
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)1.16
Price to Sales (P/S)0.00
P/FCF Ratio30.49
Enterprise Value/Market Cap1.73
Enterprise Value/Revenue0.23
Enterprise Value/Gross Profit1.87
Enterprise Value/Ebitda3.21
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. 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:May 14, 2025
(Q2-2025)
| % Change Since: 13.20%|
Next Earnings Date:Sep 30, 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%.Netsol Technologies Financial Statement Overview
Summary
Netsol Technologies shows 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 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 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 | 26.35M | 26.96M |
| EBIT | |||||
| 1.10M | 3.49M | -8.78M | -1.66M | 4.47M | 2.26M |
| EBITDA | |||||
| 3.55M | 6.09M | 791.66K | 2.73M | 6.68M | 4.80M |
| Net Income Common Stockholders | |||||
| 264.84K | 683.87K | -5.24M | 1.10M | 1.78M | 937.08K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 18.77M | 19.13M | 15.53M | 23.96M | 33.71M | 20.17M |
| Total Assets | |||||
| 58.14M | 64.19M | 58.38M | 72.61M | 86.61M | 88.47M |
| Total Debt | |||||
| 9.45M | 7.67M | 7.11M | 10.04M | 13.49M | 13.13M |
| Net Debt | |||||
| -9.33M | -11.46M | -8.42M | -13.92M | -20.22M | -7.04M |
| 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
2.83
Price Trends
2.58
Positive
2.55
Positive
2.68
Positive
Market Momentum
0.09
Positive
53.83
Neutral
47.82
Neutral
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 2.83 is below the 20-day moving average (MA) of 2.86, above the 50-day MA of 2.58, and above the 200-day MA of 2.68, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 53.83 is Neutral, neither overbought nor oversold. The STOCH value of 47.82 is Neutral, 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 2 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 0 New Risks
Netsol Technologies Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $33.14M | 135.41 | 0.75% | ― | 9.18% | ― | |
63 Neutral | $23.40M | 37.80 | 0.06% | ― | -14.64% | -97.84% | |
62 Neutral | $11.80B | 10.10 | -7.47% | 2.99% | 7.37% | -8.16% | |
61 Neutral | $24.92M | 135.27 | 0.90% | ― | -4.17% | -72.98% | |
54 Neutral | $31.64M | ― | -5.11% | ― | -18.85% | -2549.17% | |
53 Neutral | $21.56M | ― | -14.60% | ― | 5.77% | 29.54% | |
52 Neutral | $39.55M | 32.63 | -2.82% | ― | -36.35% | -153.77% |
* Technology Sector Average
Performance Comparison
NTWK
Netsol Technologies
2.83
0.16
5.99%
KTCC
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2.94
-0.93
-24.03%
OCC
Optical Cable
2.62
-0.14
-5.07%
TRT
Trio-Tech International
5.42
-0.83
-13.28%
DTST
Data Storage
3.49
-2.88
-45.21%
HKIT
Hitek Global
1.35
-0.35
-20.59%
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.