Critical Review: NetSol Technologies (NASDAQ:NTWK) and Smith Micro Software (NASDAQ:SMSI)

NetSol Technologies (NASDAQ:NTWK) and Smith Micro Software (NASDAQ:SMSI) are both small-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, dividends, risk, earnings and valuation.

Earnings & Valuation

This table compares NetSol Technologies and Smith Micro Software’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NetSol Technologies $60.93 million 1.13 $4.30 million N/A N/A
Smith Micro Software $26.28 million 3.54 -$2.74 million ($0.14) -20.71



NetSol Technologies has higher revenue and earnings than Smith Micro Software.

Volatility & Risk

NetSol Technologies has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500. Comparatively, Smith Micro Software has a beta of 0.39, indicating that its share price is 61% less volatile than the S&P 500.

Insider & Institutional Ownership

30.9% of NetSol Technologies shares are held by institutional investors. Comparatively, 7.2% of Smith Micro Software shares are held by institutional investors. 11.8% of NetSol Technologies shares are held by insiders. Comparatively, 24.8% of Smith Micro Software shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares NetSol Technologies and Smith Micro Software’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NetSol Technologies 9.33% 8.82% 6.77%
Smith Micro Software -1.06% 16.96% 9.01%

Analyst Ratings

This is a summary of recent recommendations and price targets for NetSol Technologies and Smith Micro Software, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NetSol Technologies 0 0 0 0 N/A
Smith Micro Software 0 0 2 0 3.00

Smith Micro Software has a consensus price target of $4.50, suggesting a potential upside of 55.17%. Given Smith Micro Software’s higher possible upside, analysts plainly believe Smith Micro Software is more favorable than NetSol Technologies.

About NetSol Technologies

NetSol Technologies, Inc. designs, develops, markets, and exports software products to the automobile financing and leasing, banking, and financial services industries worldwide. It also provides system integration, consulting, and IT products and services. The company offers NetSol Financial Suite (NFS), an end-to-end solution covering leasing and finance cycle for the asset finance industry; and NFS Ascent platform, a lease accounting and contract processing engine. Its NFS includes Point of Sale, a front office processing system for the financial sector; Credit Application Processing System that handles incoming credit applications from dealers, agents, brokers, and the direct sales force; Contract Management System that enables users to manage and maintain a contract; Wholesale Finance System (WFS) to automate and manage the floor plan/bailment activities; Dealer Auditor Access System, a Web-based solution used with WFS; and Fleet Management System to handle fleet management needs. The company's NFS Ascent comprises LeasePak, which handles various aspects of the lease or loan lifecycle; and LeasePak software-as-a-service to small and mid-sized leasing and finance companies. In addition, it offers LeaseSoft, a full lifecycle lease and finance system for funder market; and LoanSoft for consumer loan market. Further, the company provides NFS Digital that enables a sales force for the finance and leasing company to access channels, such as point of sale, field investigation, and auditing. Its NFS Digital includes mAccount, a self-service mobile solution; mPOS application, a Web and mobile enabled platform; mDealer, a mobile platform; mAuditor, which schedules visits, records audit exceptions, and tracks assets; and Mobile Field Investigator that permits applicants for detail verification. NetSol Technologies, Inc. has a strategic partnership with Drivemate Co., Ltd. The company was founded in 1997 and is headquartered in Calabasas, California.

About Smith Micro Software

Smith Micro Software, Inc. develops and sells software to simplify and enhance the mobile experience to wireless service providers, device manufacturers, and enterprise businesses in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates through two segments, Wireless and Graphics. The Wireless segment offers SafePath Family, real-time family location tracking app; CommSuite VVM, a Visual Voicemail directly to a mobile phone app and email; CommSuite VTT, Voice-to-Text transcription system; NetWise Optics, a mobile analytics solution; NetWise Passport, an automated user onboarding and Wi-Fi service provisioning solution; QuickLink IoT Services Platform, an end-to-end device management platform; and Captivate, a mobile marketing and Big Data platform. The Graphics segment develops various software products, including graphic design and animation, compression, and PC/Mac utilities for consumers, professional artists, and educators. This segment offers Poser, 3D rendering and animation software for photorealistic characters, art, illustration, and digital design; Moho, 2D animation program for creating movies, cartoons, anime, and cut out animations; MotionArtist, a solution for creating animatics and interactive presentations; and StuffIt Deluxe, a solution for documents and media. The company provides its products through direct sales on its Websites, as well as through affiliate Websites, resellers, and retail outlets. It also offers technical support and customer services. Smith Micro Software, Inc. was founded in 1982 and is headquartered in Aliso Viejo, California.

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