One-glance verdict
Undervalued
$6.41 our estimate vs market $4.57
29% below our estimate, below the bear case
Fundamentals snapshot
NetSol Technologies, Inc.
NTWK · NCM · Technology · Software - Application
Current price
$4.57
52-week range
$2.73 - $5.75
Market cap
$54.28M
Balance sheet
Healthy
4.02x Stretched
Net cash $5.41M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 5.2% last year.
- Reward Returns 11.5% on equity, ahead of 80% of its peers.
- Reward Free cash flow was positive in 7/10 years.
- Risk Stock trades 11.2% above its 5-year average P/E.
What this company does
NetSol Technologies, Inc.
NetSol Technologies builds and sells specialized software for companies that handle car loans and equipment leasing, like banks and dealership finance departments. The company makes money by licensing these software platforms, which manage the entire lending process from the initial application to the final payment. This matters because NetSol provides a critical tool for the global auto finance industry, and its sales often create long-term contracts and a steady, predictable income stream.
How the company got here
Founded in 1995 by the Ghauri brothers, NetSol Technologies started with a focus on providing software solutions to the global finance and leasing industry. A major turning point came in 1996 with a significant contract with Mercedes-Benz in Thailand, setting the stage for work with other major auto companies like Toyota and DaimlerChrysler. The company went public and was listed on the NASDAQ stock exchange in 1999, which provided capital (money raised to grow a business) to expand its operations globally. Over the years, NetSol has grown by acquiring other companies and has established a strong presence in North America, Europe, and the Asia-Pacific region.
What it actually does
Think about when someone buys or leases a car; there's a lot of paperwork and financial calculations for the loan or lease. NetSol creates the complex software that car companies, banks, and other lenders use to manage this entire process from start to finish. Their main product, the Transcend Platform, helps with everything from the initial credit application and creating the contract to managing monthly payments and handling the end of the lease. Essentially, NetSol provides the digital backbone for the auto and equipment financing world, making the process of buying, selling, and leasing assets smoother for large businesses.
License Fees
This is the traditional way NetSol makes money, by selling a perpetual license (the right to use the software indefinitely) to its customers. The customer pays a large, one-time fee to own and use the software on their own computer systems. This part of the business can cause revenue (the total amount of money a company brings in from its sales) to be uneven, as it depends on securing large contracts which don't happen on a regular schedule. While still a part of their business, the company is increasingly focusing on a subscription model.
Subscription and Support Fees
This is a growing and more predictable source of income for NetSol, where customers pay a recurring fee (often monthly or annually) to access the software, which is typically hosted by NetSol in the cloud. This is often called a SaaS (Software-as-a-Service) model. This fee also includes ongoing customer support, maintenance, and regular updates to the software. This creates a steady stream of revenue for the company, as opposed to the one-time nature of license fees.
Services
Beyond just providing the software, NetSol also charges for the work required to get a new customer set up and for any custom features they might need. This includes implementing the software into the customer's existing systems, training their employees on how to use it, and providing consulting to make sure the software meets their specific business needs. This is an important part of their business as it ensures their complex software works correctly for each unique client.
What management is betting on now
NetSol's current strategy is heavily focused on its all-in-one Transcend Platform, which uses artificial intelligence (AI) to make the financing process smarter and more efficient. They are pushing to get more customers onto their cloud-based subscription model, which creates more predictable recurring revenue. The company is also focused on expanding its presence in major markets like North America, Europe, and Asia-Pacific, and recently signed a significant deal in China to provide financial services for the auto industry. By integrating AI and offering a complete platform, NetSol aims to be the go-to technology partner for the global asset finance industry.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$6.08M
FY2025 Q1
$5.42M
FY2025 Q2
$-5.62M
FY2025 Q3
$-693.01K
FY2025 Q4
$-44.08K
FY2026 Q1
$4.82M
FY2026 Q2
$-5.12M
FY2026 Q3
$-1.86M
Revenue
$21.30M
Net income
$1.30M
Diluted EPS
0.11
Operating cash flow
$-1.34M
Free cash flow
$-1.86M
Fetching…
Sources
Revenue
$20.05M
Net income
$246.76K
Diluted EPS
0.02
Operating cash flow
$-4.75M
Free cash flow
$-5.12M
Fetching…
Sources
Revenue
$16.07M
Net income
$-2.36M
Diluted EPS
-0.20
Operating cash flow
$5.30M
Free cash flow
$4.82M
Fetching…
Sources
Revenue
$19.48M
Net income
$2.58M
Diluted EPS
0.22
Operating cash flow
$440.95K
Free cash flow
$-44.08K
Fetching…
Sources
Revenue
$17.54M
Net income
$1.42M
Diluted EPS
0.12
Operating cash flow
$-363.40K
Free cash flow
$-693.01K
Fetching…
Sources
Revenue
$15.54M
Net income
$-1.15M
Diluted EPS
-0.10
Operating cash flow
$-5.15M
Free cash flow
$-5.62M
Fetching…
Sources
Revenue
$14.60M
Net income
$70.80K
Diluted EPS
0.01
Operating cash flow
$5.52M
Free cash flow
$5.42M
Fetching…
Sources
Revenue
$16.45M
Net income
$-82.88K
Diluted EPS
-0.01
Operating cash flow
$6.51M
Free cash flow
$6.08M
Fetching…
Sources
Is it cheap or expensive?
Fair value $6.41 vs current price $4.57
Our most-likely fair value is $6.41 a share — about 40.2% above today's price of $4.57, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $5.4M - more cash than debt. Interest coverage 4.0x.
Net debt
$-5.41M
Interest coverage
4.02x
NetSol Technologies, Inc.'s profit covers its interest bill about 4.0 times over. which is stronger than every peer shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
NTWK
BASELINE
NetSol Technologies, Inc.
Total debt $9.33M Interest coverage 4.02x This is the baseline the peer rows are being compared against.
Total debt $26.55M Interest coverage -11.33x -100% vs NTWK This peer has almost no interest-payment cushion compared with NTWK.
Total debt $16.74M Interest coverage -795.00x -100% vs NTWK This peer has almost no interest-payment cushion compared with NTWK.
Total debt $2.85M Interest coverage 1.74x -57% vs NTWK Carries about 2.3x less debt cushion than NTWK.
Total debt $187.05M Interest coverage 1.28x -68% vs NTWK Carries about 3.1x less debt cushion than NTWK.
What you should know
The case for and against NTWK
3 Rewards
1 Risk
Rewards
-
Revenue grew 5.2% last year.
-
Returns 11.5% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 7/10 years.
Risks
-
Stock trades 11.2% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
30.47x
Forward P/E
12.03x
P/B
1.46x
P/S
0.75x
EV/EBITDA
8.04x
PEG ratio
0.30x
Profitability
How much profit each dollar creates
Gross margin
50.4%
Operating margin
15.2%
Net margin
2.5%
ROE
11.5%
ROA
5.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.21x
Current ratio
1.94x
Quick ratio
1.85x
Total debt
$9.33M
Total cash
$14.74M
Growth
How the business has been compounding
Revenue TTM
$76.91M
Revenue 5Y CAGR
7.4%
EPS TTM
0.15
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$-344.40K
Free CF TTM
$-935.50K
FCF margin
-1.2%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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