Analyzing ChinaCache International (CCIH) & NetSol Technologies (NASDAQ:NTWK)

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

Insider and Institutional Ownership

19.2% of NetSol Technologies shares are owned by institutional investors. Comparatively, 31.3% of ChinaCache International shares are owned by institutional investors. 11.1% of NetSol Technologies shares are owned by insiders. Comparatively, 13.7% of ChinaCache International shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for NetSol Technologies and ChinaCache International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NetSol Technologies 0 0 0 0 N/A
ChinaCache International 0 0 0 0 N/A

Profitability

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

Net Margins Return on Equity Return on Assets
NetSol Technologies -6.01% -4.82% -3.88%
ChinaCache International N/A N/A N/A

Volatility & Risk

NetSol Technologies has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, ChinaCache International has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NetSol Technologies $65.37 million 0.90 -$4.97 million ($0.34) -15.29
ChinaCache International $151.84 million 0.45 -$131.56 million ($4.80) -0.56

NetSol Technologies has higher earnings, but lower revenue than ChinaCache International. NetSol Technologies is trading at a lower price-to-earnings ratio than ChinaCache International, indicating that it is currently the more affordable of the two stocks.

Summary

ChinaCache International beats NetSol Technologies on 7 of the 11 factors compared between the two stocks.

About NetSol Technologies

NetSol Technologies, Inc. is a provider of information technology (IT) and enterprise software solutions. The Company is engaged in the licensing, customization, enhancement and maintenance of its suite of financial applications under the brand names, NetSol Financial Suite (NFS) and NFS Ascent, for businesses in the lease and finance industry. The Company’s segments include North America, Europe and Asia-Pacific. The Company’s offerings include its global solution, NFS. The four applications under NFS have been designed and developed for a setting, and deals with multinational, multi-company, multi-asset, multi-lingual, multi-distributor and multi-manufacturer environments. Each application is used independently to address specific sub-domains of the leasing/financing cycle. The Company’s platform, NFS Ascent, offers a solution for the auto and equipment finance and leasing industry. NFS Ascent platform is a lease accounting and contract processing engine.

About ChinaCache International

ChinaCache International Holdings Ltd. (ChinaCache) is a holding Company. The Company provides a portfolio of services and solutions to businesses, government agencies and other enterprises to manage the scalability of their online services and applications. Its across the nation service platform, which consists of its network, servers and software, is designed to handle planned and unplanned peaks without upfront and ongoing capital outlay and other investments on the part of its customers. It provides a portfolio of content and application delivery total solutions and solutions tailored to its customers’ needs. It provides various services that are offered on a standalone basis or combined as part of its integrated solutions, such as Web Page Content Services, File Transfer Services, Rich Media Streaming Services, Guaranteed Application Services, Managed Internet Data Services, ChinaCache Cloud Services, Content Bridging Services and Mobile Internet Solutions.

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