Check Point Software Technologies (NASDAQ:CHKP) and NetSol Technologies (NASDAQ:NTWK) Critical Analysis

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Check Point Software Technologies (NASDAQ:CHKP) 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 dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Check Point Software Technologies and NetSol Technologies, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Check Point Software Technologies 2 13 3 0 2.06
NetSol Technologies 0 0 0 0 N/A

Check Point Software Technologies presently has a consensus price target of $118.75, suggesting a potential upside of 2.89%. Given Check Point Software Technologies’ higher possible upside, research analysts clearly believe Check Point Software Technologies is more favorable than NetSol Technologies.

Profitability

This table compares Check Point Software Technologies and NetSol Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Check Point Software Technologies 40.05% 21.86% 14.01%
NetSol Technologies 12.66% 12.55% 9.60%

Insider and Institutional Ownership

70.8% of Check Point Software Technologies shares are owned by institutional investors. Comparatively, 30.3% of NetSol Technologies shares are owned by institutional investors. 29.0% of Check Point Software Technologies shares are owned by company insiders. Comparatively, 14.3% of NetSol Technologies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Check Point Software Technologies and NetSol Technologies’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Check Point Software Technologies $1.92 billion 9.17 $821.30 million $5.21 22.15
NetSol Technologies $67.82 million 0.98 $8.58 million $0.74 7.68

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

Volatility & Risk

Check Point Software Technologies has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, NetSol Technologies has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500.

Summary

Check Point Software Technologies beats NetSol Technologies on 13 of the 13 factors compared between the two stocks.

About Check Point Software Technologies

Check Point Software Technologies Ltd. develops, markets, and supports a range of products and services for IT security worldwide. The company offers a portfolio of network and gateway solutions, management solutions, and data and endpoint security solutions. It provides Check Point Infinity Architecture, a cyber security architecture that protects against 5th generation mega cyber-attacks across various networks, endpoint, cloud, and mobile; security gateways from platforms for small business and small office locations, high end and high demanding data centers, and perimeter environments; and Check Point SandBlast family for threat prevention and zero-day protections. The company also offers Check Point CloudGuard cloud security product that delivers threat prevention security for enterprise cloud networks, data, and applications; Check Point SandBlast Mobile for mobile security in iOS and Android devices; and Check Point Security Management, which offers security management through a single console that streamlines security operations and provides visibility into policy administration and threat analysis. In addition, the company provides technical customer support programs and plans; professional services in implementing, upgrading, and optimizing Check Point products comprising design planning and security implementation; and certification and educational training services. It sells its products and services to enterprises, service providers, small and medium sized businesses, and consumers through a network of channel partners, such as distributors, resellers, system integrators, original equipment manufacturers, and managed security service providers. Check Point Software Technologies Ltd. was founded in 1993 and is headquartered in Tel Aviv, 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 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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