NetSol Technologies, Inc.
NetSol Technologies, Inc. Fundamental Analysis
NetSol Technologies, Inc. (NTWK) shows weak financial fundamentals with a PE ratio of 20.89, profit margin of 2.71%, and ROE of 5.21%. The company generates $0.1B in annual revenue with moderate year-over-year growth of 7.65%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 42.0/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze NTWK's fundamental strength across five key dimensions:
Efficiency Score
WeakNTWK struggles to generate sufficient returns from assets.
Valuation Score
ExcellentNTWK trades at attractive valuation levels.
Growth Score
ModerateNTWK shows steady but slowing expansion.
Financial Health Score
ExcellentNTWK maintains a strong and stable balance sheet.
Profitability Score
WeakNTWK struggles to sustain strong margins.
Key Financial Metrics
Is NTWK Expensive or Cheap?
P/E Ratio
NTWK trades at 20.89 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, NTWK's PEG of 0.07 indicates potential undervaluation.
Price to Book
The market values NetSol Technologies, Inc. at 1.10 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 6.25 times EBITDA. This is generally considered low.
How Well Does NTWK Make Money?
Net Profit Margin
For every $100 in sales, NetSol Technologies, Inc. keeps $2.71 as profit after all expenses.
Operating Margin
Core operations generate 6.03 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $5.21 in profit for every $100 of shareholder equity.
ROA
NetSol Technologies, Inc. generates $3.01 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
NetSol Technologies, Inc. generates limited operating cash flow of $633.47K, signaling weaker underlying cash strength.
Free Cash Flow
NetSol Technologies, Inc. generates weak or negative free cash flow of $-1.04M, restricting financial flexibility.
FCF Per Share
Each share generates $-0.09 in free cash annually.
FCF Yield
NTWK converts -2.62% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
20.89
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.07
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.10
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.57
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.27
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.32
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.05
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.10
vs 25 benchmark
How NTWK Stacks Against Its Sector Peers
| Metric | NTWK Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 20.89 | 34.21 | Better (Cheaper) |
| ROE | 5.21% | 1018.00% | Weak |
| Net Margin | 2.71% | -66372.00% (disorted) | Weak |
| Debt/Equity | 0.27 | 0.45 | Strong (Low Leverage) |
| Current Ratio | 2.32 | 5.72 | Strong Liquidity |
| ROA | 3.01% | -291248.00% (disorted) | Weak |
NTWK outperforms its industry in 3 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews NetSol Technologies, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
18.84%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
216.22%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
-88.59%
Industry Style: Growth, Innovation, High Beta
Declining