NEW YORK (TheStreet) -- NetSol Technologies (NTWK) stock is up by 33.44% to $8.54 on heavy trading volume on Monday, after the company announced that it signed a $100 million contract to implement its NFS Ascent product.
The information technology company, which provides a variety of financial service applications, said the agreement included license, maintenance, services and expected customization of its product.
"This is a transformative agreement for NetSol, representing the largest contract in the company's history, and a strong endorsement for NFS Ascent from a nearly two-decade-long partnership with our client," NetSol CEO Najeeb Ghauri said in a statement. "The significant investments we made in our infrastructure and staffing are paying off and building leverage into our business."
NetSol is keeping the name of the company that signed the agreement confidential.
So far today, 2.02 million shares of NetSol have traded, versus its 30-day average of about 35,000 shares.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate NETSOL TECHNOLOGIES INC as a Hold with a ratings score of C-. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 16.7%. Since the same quarter one year prior, revenues rose by 30.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- NTWK's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, NTWK has a quick ratio of 2.13, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for NETSOL TECHNOLOGIES INC is rather high; currently it is at 51.75%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -3.08% is in-line with the industry average.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Software industry and the overall market, NETSOL TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$3.18 million or 560.70% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: NTWK