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Netsol Technologies
(NASDAQ:NTWK)
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Rating:68Neutral
Price Target:
$6.00
▲(48.15% Upside)
Action:Downgraded
Date:09/29/26
NTWK scores positively on improving financial performance (revenue growth, margin expansion, and stronger profitability with conservative leverage) and a constructive earnings outlook supported by upbeat FY2027 guidance and recurring-revenue traction. The overall score is held back by volatile historical cash flow/earnings consistency, a technically overbought setup that increases near-term pullback risk, and a relatively high P/E without a dividend yield to cushion valuation.
Positive Factors
Recurring revenue and customer retention
Recurring subscription and support revenue now contributes nearly half of sales, creating a more durable base than project-only revenue. Mission-critical finance systems, long customer relationships, renewals, and upgrades can support visibility while reducing dependence on continually winning entirely new accounts.
Negative Factors
Volatile cash-flow conversion
The sharp swing from weak or negative 2025 free cash flow to strong 2026 generation reduces confidence that current cash conversion will persist each year. Management said working-capital benefits contributed about $6.5M to cash flow and are not expected to repeat at the same level, creating a durability risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring revenue and customer retention
Recurring subscription and support revenue now contributes nearly half of sales, creating a more durable base than project-only revenue. Mission-critical finance systems, long customer relationships, renewals, and upgrades can support visibility while reducing dependence on continually winning entirely new accounts.
Read all positive factors
Netsol Technologies Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows how revenue is distributed across different business units, highlighting which segments are driving growth and which may need strategic adjustments.
Shows how revenue is distributed across different business units, highlighting which segments are driving growth and which may need strategic adjustments.
Data provided by:
The Fly
The FlyNetsol Technologies (NTWK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$71.12M
Dividend YieldN/A
Average Volume (3M)68.71K
Price to Earnings (P/E)23.7
Beta (1Y)0.86
Revenue Growth12.53%
EPS Growth-0.08%
CountryUS
Employees1,370
SectorGeneral
Sector StrengthN/A
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.25
Shares Outstanding11,952,568
10 Day Avg. Volume171,410
30 Day Avg. Volume68,714
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)1.31
Price to Sales (P/S)0.73
P/FCF Ratio4.60
Enterprise Value/Market Cap0.63
Enterprise Value/Revenue0.61
Enterprise Value/Gross Profit1.15
Enterprise Value/Ebitda5.14
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Netsol Technologies Business Overview & Revenue Model
Company Description
NetSol Technologies, Inc., established in 1997 and headquartered in Calabasas, California, is a global developer and exporter of specialized software solutions tailored for the automotive finance and leasing, banking, and broader financial service...
How the Company Makes Money
Netsol Technologies makes money mainly by selling and supporting its enterprise software products for the finance and leasing market and by providing professional services associated with deploying and operating those systems.
Key revenue streams...
Netsol Technologies Earnings Call Summary
Earnings Call Date:Sep 28, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The call was strongly optimistic, with management describing fiscal 2026 as the strongest year in NetSol's history and reporting double-digit revenue growth, sharply improved margins, nearly doubled operating income, stronger cash generation, major Transcend Finance and Retail wins, and positive fiscal 2027 growth guidance. The principal negatives were flat full-year net income attributable to NetSol, the effect of noncontrolling interests and other-income comparisons, quarter-to-quarter variability, a fiscal 2027 gross-margin guide of approximately 50% or better, and unresolved structural options related to the Pakistan business. Highlights significantly outweighed the lowlights.Positive Updates
Strongest Financial Year in Company History
Fiscal 2026 was described as NetSol's strongest financial year in its history. Total net revenue reached a record $74.4 million, increasing 12.5% year over year and exceeding the company's $73 million guidance.
Negative Updates
Net Income Attributable to NetSol Was Flat for the Full Year
Full-year net income attributable to NetSol was $2.95 million, or $0.25 per diluted share, consistent with the prior year. Management attributed the lack of growth to approximately $2.27 million less total other income year over year, including a $0.39 million foreign exchange loss versus a $1.3 million foreign exchange gain and lower interest income, as well as a roughly $1 million increase in income attributable to noncontrolling interests to $2.65 million.
Read all updates
Q4-2026 Updates
Positive
Negative
Strongest Financial Year in Company History
Fiscal 2026 was described as NetSol's strongest financial year in its history. Total net revenue reached a record $74.4 million, increasing 12.5% year over year and exceeding the company's $73 million guidance.
Read all positive updates
Company Guidance
For fiscal 2027, NetSol currently expects net revenues to grow 13% to 16% over fiscal 2026, gross margin of approximately 50% or better, and consolidated adjusted EBITDA growth of 15% to 25%, corresponding to approximately $10.5 million to $11.4 million; this guidance assumes continued subscription growth, execution of contracted implementations, disciplined cost management and no material acquisitions. Management also said the “staple guidance” is “at least 50% or better” gross margin and that contracted revenue was approximately $60 million as of June 30, 2026, with an objective to grow well above it.Netsol Technologies Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
74
Positive
Cash Flow
63
Positive
| Breakdown | Jun 2026 | Jun 2025 | Sep 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 74.37M | 66.09M | 61.39M | 52.39M | 57.25M |
| Gross Profit | 39.15M | 32.57M | 29.28M | 16.92M | 23.74M |
| EBITDA | 8.19M | 8.38M | 6.09M | 791.66K | 6.27M |
| Net Income | 2.95M | 2.92M | 683.87K | -5.24M | -851.16K |
Balance Sheet | |||||
| Total Assets | 77.84M | 62.44M | 64.19M | 58.38M | 72.61M |
| Cash, Cash Equivalents and Short-Term Investments | 27.12M | 17.36M | 19.13M | 15.53M | 23.96M |
| Total Debt | 9.28M | 9.14M | 7.67M | 7.11M | 10.04M |
| Total Liabilities | 28.27M | 20.18M | 24.65M | 21.60M | 21.75M |
| Stockholders Equity | 41.59M | 37.83M | 34.84M | 33.81M | 45.40M |
Cash Flow | |||||
| Free Cash Flow | 11.88M | -935.50K | 2.39M | 370.13K | 451.42K |
| Operating Cash Flow | 13.88M | 447.27K | 2.91M | 2.01M | 3.06M |
| Investing Cash Flow | -4.58M | -1.27M | -291.54K | -1.40M | -2.26M |
| Financing Cash Flow | 269.08K | 822.88K | 239.55K | -718.99K | -1.38M |
Netsol Technologies Technical Analysis
Positive
4.05
Price Trends
4.36
Positive
4.40
Positive
3.88
Positive
Market Momentum
0.40
Negative
85.16
Negative
89.50
Negative
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 4.05 is below the 20-day moving average (MA) of 4.64, below the 50-day MA of 4.36, and above the 200-day MA of 3.88, indicating a bullish trend. The MACD of 0.40 indicates Negative momentum. The RSI at 85.16 is Negative, neither overbought nor oversold. The STOCH value of 89.50 is Negative, 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 (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $800.92M | 35.42 | 9.35% | ― | 11.10% | 47.69% | |
71 Outperform | $1.04B | -73.18 | -5.70% | ― | 9.63% | 55.51% | |
68 Neutral | $71.12M | 23.71 | 7.84% | ― | 12.53% | -0.08% | |
61 Neutral | $592.92M | -29.08 | -24.96% | ― | 16.73% | 35.67% | |
56 Neutral | $589.42M | -8.05 | -8.73% | 0.34% | 18.81% | 25.45% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
49 Neutral | $109.53M | -0.16 | -179.72% | 488.34% | 46.34% | 42.87% |
* General Sector Average
NTWK
Netsol Technologies
5.95
1.42
31.35%
MITK
Mitek Systems
17.75
8.10
83.94%
PAR
Par Technology
14.25
-23.65
-62.40%
CANG
Cango
2.67
-45.63
-94.47%
RSKD
Riskified
7.86
3.20
68.67%
WEAV
Weave Communications
7.37
0.59
8.70%
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.