Analyzing Ellie Mae (NYSE:ELLI) & NetSol Technologies (NYSE:NTWK)

Ellie Mae (NYSE:ELLI) and NetSol Technologies (NASDAQ:NTWK) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Institutional and Insider Ownership

30.9% of NetSol Technologies shares are held by institutional investors. 3.1% of Ellie Mae shares are held by insiders. Comparatively, 14.3% of NetSol Technologies shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Ellie Mae and NetSol Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ellie Mae 5.02% 4.17% 3.70%
NetSol Technologies 9.33% 8.82% 6.77%

Risk and Volatility

Ellie Mae has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500. Comparatively, NetSol Technologies has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Ellie Mae and NetSol Technologies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ellie Mae 4 8 3 0 1.93
NetSol Technologies 0 0 0 0 N/A

Ellie Mae presently has a consensus target price of $86.00, suggesting a potential downside of 13.12%. Given Ellie Mae’s higher probable upside, research analysts plainly believe Ellie Mae is more favorable than NetSol Technologies.

Earnings and Valuation

This table compares Ellie Mae and NetSol Technologies’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ellie Mae $480.27 million 7.17 $22.58 million $1.03 96.11
NetSol Technologies $60.93 million 1.08 $4.30 million $0.38 14.79

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

Summary

Ellie Mae beats NetSol Technologies on 8 of the 13 factors compared between the two stocks.

About Ellie Mae

Ellie Mae, Inc. provides cloud-based platform for the mortgage finance industry in the United States. It provides Encompass, an enterprise solution that engages in running the business of originating mortgages, including marketing and lead management; loan origination and processing; underwriting; preparation of mortgage applications, disclosure agreements, and closing documents; loan funding and closing; compliance with regulatory and investor requirements; and enterprise management. The company's Encompass Digital Lending Platform helps lenders and investors across their workflow from the prospective customers to the point of loan delivery. In addition, the company provides education and training services; professional and technical support services; and loan product, policy, and guideline data and analytics services. Ellie Mae, Inc. was founded in 1997 and is headquartered in Pleasanton, California.

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.

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