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NetSol Technologies, Inc. (NTWK) Research Update Released

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New York, NY - February 26, 2014 (www.investorideas.com newswire) Taglich Brothers released an updated research report on NetSol Technologies, Inc. (NTWK) and reiterated a Speculative Buy rating with the 12-month price target lowered to $5.95 per share from $6.30 due to diminished sales. The report noted the following key investment considerations:

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  • With an estimated 8,300 potential customers, growth potential for the company’s 2nd generation platform NFS Ascent is substantial. Globally, the company has captured less than 1% of total potential customers (180+). We estimate 3% of the potential auto-finance customers in Asia are NetSol customers.
  • In FY14 deal size may shrink, but growth of Asian financial leasing should drive modest sales of the legacy NFS platform. In 2012 (latest available data), financial leasing in China increased by 66% due to slower economic growth, making leasing attractive versus than a purchase.
  • In 2Q14, sales (reported on 2/13/14) decreased by 26.3% to $8.7 million. The loss was ($0.18) per share, down from EPS of $0.28 per share. The downturn was due to customers’ delay of legacy NFS orders in anticipation of the validation of its new NFS Ascent offering. We projected sales of $9.3 million and a loss of ($0.18) per share.
  • We reduced our FY14 EPS projection to a loss of ($0.42) from (0.07) per share, on sales of $40.2 million (prior was $45 million). The reduction reflects 1H14 results and continued customer delays until the implementation of three NFS Ascent platform reference customers are completed. The hiring and training of 300 – 400 new employees will increase operating expenses by 20.8% to $19.5 million.
  • In FY15 we project EPS of $0.50 per share, on sales of $60.7 million, down from projected EPS of $1.00 on previously estimated sales of $66.2 million, reflecting a slower than anticipated ramp of large NFS Ascent deals. At February 2014 only one of the three reference customers are running NFS Ascent. Until all three are completed a full sales ramp will likely diminish FY15 sales from our prior forecast. We project gross margin recovery to 50%, up from 38.2% in FY14 but below 54.8% in FY13.

The full report can be viewed at http://www.taglichbrothers.com.

Company Description:

NetSol Technologies, Inc., headquartered in Calabasas, CA, is a global provider of information technology and enterprise application solutions including credit and finance portfolio management systems, SAP consulting and services, custom development, systems integration, and technical services for global Financial, Leasing, Insurance, Energy, and Technology markets.

Taglich Brothers:

Taglich Brothers, Inc. is full-service broker dealer focused exclusively on microcap companies. The Company defines the microcap segment of the equity market as companies with less than $250 million in market capitalization. Taglich Brothers currently offers institutional and retail brokerage services, investment banking and comprehensive research coverage to the investment community.

The Taglich Brothers' Equity Research department is dedicated to providing research reports that are informative, insightful and illuminating. Reports are designed to distill volumes of investment information into a concise, straightforward format so that busy professional investors can make informed investment decisions.

Disclaimer:

The information and statistical data contained herein have been obtained from sources, which we believe to be reliable but in no way are warranted by us as to accuracy or completeness. We do not undertake to advise you as to changes in figures or our views. This is not a solicitation of any order to buy or sell. Taglich Brothers, Inc. is fully disclosed with its clearing firm, Pershing, LLC, is not a market maker and does not sell to or buy from customers on a principal basis. The above statement is the opinion of Taglich Brothers, Inc. and is not a guarantee that the target price for the stock will be met or that predicted business results for the company will occur. There may be instances when fundamental, technical and quantitative opinions contained in this report are not in concert. We, our affiliates, any officer, director or stockholder or any member of their families may from time to time purchase or sell any of the above-mentioned or related securities. Analysts and members of the Research Department are prohibited from buying or selling securities issued by the companies that Taglich Brothers, Inc. has a research relationship with, except if ownership of such securities was prior to the start of such relationship, then an Analyst or member of the Research Department may sell such securities after obtaining expressed written permission from Compliance. All research issued by Taglich Brothers, Inc. is based on public information. As of the date of this report, we, our affiliates, any officer, director or stockholder, or any member of their families do not have a position in the stock of the company mentioned in this report. Taglich Brothers, Inc. does not currently have an Investment Banking relationship with the company mentioned in this report and was not a manager or co-manager of any offering for the company with in the last three years. The company prepaid for the first three months of distribution a total of $4,500 (USD) in October 2011, and will pay beginning March 2011 a monthly monetary fee of $1,500 (USD) to Taglich Brothers, Inc. for the creation and dissemination of research reports.

Contact

Richard Oh
Email: press@taglichbrothers.com

More Info:

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