VeriFone Systems (PAY) vs. NetSol Technologies (NASDAQ:NTWK) Head to Head Comparison

NetSol Technologies (NASDAQ: NTWK) and VeriFone Systems (NYSE:PAY) are both small-cap technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, valuation and risk.

Risk and Volatility

NetSol Technologies has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500. Comparatively, VeriFone Systems has a beta of 1.79, suggesting that its share price is 79% more volatile than the S&P 500.

Profitability

This table compares NetSol Technologies and VeriFone Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NetSol Technologies -3.62% -2.76% -2.15%
VeriFone Systems -9.29% 13.52% 4.48%

Valuation & Earnings

This table compares NetSol Technologies and VeriFone Systems’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NetSol Technologies $65.37 million 0.82 -$4.97 million ($2.24) -2.10
VeriFone Systems $1.87 billion 0.98 -$173.82 million ($1.55) -10.75

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

Analyst Ratings

This is a breakdown of current ratings and price targets for NetSol Technologies and VeriFone Systems, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NetSol Technologies 0 0 0 0 N/A
VeriFone Systems 1 12 3 0 2.13

VeriFone Systems has a consensus target price of $20.15, indicating a potential upside of 20.90%. Given VeriFone Systems’ higher probable upside, analysts clearly believe VeriFone Systems is more favorable than NetSol Technologies.

Insider and Institutional Ownership

18.5% of NetSol Technologies shares are owned by institutional investors. 11.1% of NetSol Technologies shares are owned by company insiders. Comparatively, 1.2% of VeriFone Systems shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

VeriFone Systems beats NetSol Technologies on 8 of the 13 factors compared between the two stocks.

NetSol Technologies Company Profile

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.

VeriFone Systems Company Profile

VeriFone Systems, Inc. offers payments and commerce solutions. The Company is engaged in designing, manufacturing, marketing and supplying a range of payment solutions and complementary services. It provides solutions and services for the retail point-of-sale (POS) that enable various forms of commerce. The Company’s segments include Verifone Systems and Verifone Services. The Verifone Systems segment delivers point of sale electronic payment devices that run the operating systems, security and encryption software, and certified payment software for both payments and commerce. The Verifone Services segment delivers device-related leasing and maintenance, payment transaction routing and reporting, and commerce based services, such as advertising on digital screens. The Company operates in various sectors, such as financial services, retail, petroleum, restaurant, hospitality, transportation and healthcare.

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