Critical Survey: Sapiens International (SPNS) and NetSol Technologies (NTWK)

Sapiens International (NASDAQ: SPNS) and NetSol Technologies (NASDAQ:NTWK) are both small-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, dividends and risk.

Analyst Recommendations

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This is a summary of recent ratings and price targets for Sapiens International and NetSol Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sapiens International 0 2 1 0 2.33
NetSol Technologies 0 0 0 0 N/A

Sapiens International currently has a consensus price target of $14.00, indicating a potential upside of 55.21%. Given Sapiens International’s higher possible upside, research analysts clearly believe Sapiens International is more favorable than NetSol Technologies.

Risk & Volatility

Sapiens International has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500. Comparatively, NetSol Technologies has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500.

Earnings and Valuation

This table compares Sapiens International and NetSol Technologies’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sapiens International $269.19 million 1.67 $350,000.00 $0.27 33.41
NetSol Technologies $65.37 million 1.07 -$4.97 million N/A N/A

Sapiens International has higher revenue and earnings than NetSol Technologies.

Dividends

Sapiens International pays an annual dividend of $0.20 per share and has a dividend yield of 2.2%. NetSol Technologies does not pay a dividend. Sapiens International pays out 74.1% of its earnings in the form of a dividend.

Profitability

This table compares Sapiens International and NetSol Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sapiens International 1.90% 9.22% 5.02%
NetSol Technologies 0.01% 0.01% 0.01%

Institutional & Insider Ownership

9.3% of Sapiens International shares are held by institutional investors. Comparatively, 19.1% of NetSol Technologies shares are held by institutional investors. 16.0% of Sapiens International shares are held by company insiders. Comparatively, 11.8% of NetSol Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Sapiens International beats NetSol Technologies on 11 of the 13 factors compared between the two stocks.

About Sapiens International

Sapiens International Corporation N.V. provides software solutions for the insurance and financial services industries in North America, Europe, the Asia Pacific, and South Africa. The company offers software platform and solutions for life, pension, and annuities, such as Sapiens ALIS, LifeSuite, Life Portraits, LifeApply, Sapiens INSIGHT, and Sapiens Closed Books; and personal, commercial and specialty lines, and workers' compensation comprising Sapiens IDIT, Adaptik Policy, Adaptik Billing, Stream Claim, Sapiens Stingray, PowerSuite, and CompSuite. It also provides Digital Engagement, a digital insurance suite that includes advanced analytics, a portal for consumers and agents, an API layer for integration with the insurtech ecosystem, and a cloud proposition; and process analysis, business process automation, project management, performance optimization consulting services, etc., as well as information system development and various implementation methodology services to agents, customers, and insurance personnel. In addition, the company offers reinsurance software solutions, including Sapiens Reinsurance, Freedom Reinsurance System, and Universal Reinsurance System; eFreedom Annual Statement, PRO Financial General Ledger and Accounts Payable, PTE Financial applications, Insurance Financial reporting, and Power2Play financial and compliance solutions; and Sapiens DECISION, an enterprise-scale decision management solution. Further, it provides technology-based solutions based on its eMerge platform, which offers end-to-end modular business solutions, as well as Agile, Sapiens Delivery Tool, and Sapiens Delivery Performance Indicator methodologies. Additionally, the company offers program delivery, business transformation, and managed services. It markets and sells its products and services through direct and partner sales. The company was founded in 1982 and is headquartered in Holon, Israel.

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 companies in the financial sector; Credit Application Processing System that handles incoming credit applications from dealers, agents, brokers, and the direct sales force; Contract Management System, which enables its users to manage and maintain a contract throughout its life cycle; Wholesale Finance System (WFS) that automates and manages the floor plan/bailment activities; Dealer Auditor Access System, a Web-based solution used in conjunction 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 Mobility that enables a sales force for the finance and leasing company to access various channels, such as point of sale, field investigation, and auditing. Its NFS Mobility includes mAccount, a self-service mobile solution; mPOS application, a Web and mobile enabled platform; mDealer that provides a mobile platform; mAuditor, which schedules visits, records audit exceptions, and tracks assets; and Mobile Field Investigator that permits applicants for detail verification. The company was founded in 1997 and is headquartered in Calabasas, California.

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