Head-To-Head Review: SecureWorks (NASDAQ:SCWX) versus NetSol Technologies (NASDAQ:NTWK)

SecureWorks (NASDAQ:SCWX) and NetSol Technologies (NASDAQ:NTWK) are both small-cap computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, institutional ownership and profitability.

Analyst Ratings

This is a summary of recent ratings for SecureWorks and NetSol Technologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SecureWorks	1	1	0	0	1.50
NetSol Technologies	0	0	0	0	0.00

SecureWorks presently has a consensus target price of $7.00, indicating a potential downside of 17.74%. Given SecureWorks’ stronger consensus rating and higher probable upside, analysts clearly believe SecureWorks is more favorable than NetSol Technologies.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SecureWorks	-25.49%	-5.71%	-3.93%
NetSol Technologies	1.17%	1.84%	1.17%

Valuation & Earnings

This table compares SecureWorks and NetSol Technologies”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SecureWorks	$365.88 million	2.07	-$86.04 million	($0.99)	-8.60
NetSol Technologies	$61.39 million	0.50	$680,000.00	$0.07	38.57

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

Volatility and Risk

SecureWorks has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, NetSol Technologies has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500.

Institutional & Insider Ownership

14.4% of SecureWorks shares are owned by institutional investors. Comparatively, 16.0% of NetSol Technologies shares are owned by institutional investors. 81.5% of SecureWorks shares are owned by insiders. Comparatively, 13.2% of NetSol Technologies shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

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

About SecureWorks

SecureWorks Corp., through its subsidiaries, provides technology-driven information security solutions for protecting its customers in the United States and internationally. The company's solutions include software-as-a-service solutions; managed security services; and professional services, including incident response and penetration testing services. Its solutions enable organizations to prevent security breaches, detect malicious activity, respond rapidly to security breaches, and identify emerging threats. The company sells its solutions primarily through its referral agents, regional value-added resellers, trade associations, and managed security service providers. It serves customers in a range of industries, including financial services, manufacturing, technology, retail, insurance, utility, and healthcare sectors. The company was formerly known as SecureWorks Holding Corporation and changed its name to SecureWorks Corp. in November 2015. SecureWorks Corp. was founded in 1999 and is headquartered in Atlanta, Georgia. SecureWorks Corp. is a subsidiary of Dell Marketing L.P.

About NetSol Technologies

NetSol Technologies, Inc. designs, develops, markets, and exports enterprise software solutions to the automobile financing and leasing, banking, and financial services industries worldwide. The company offers NFS Ascent, a suite of financial applications for businesses in the finance and leasing industry. Its NFS Ascent constituent applications include Omni Point of Sale, a web-based application; Contract Management System (CMS), an application for managing and maintaining credit contracts; Wholesale Finance System (WFS), a system for automating and managing the lifecycle of wholesale finance; Dealer Auditor Access System, a web-based solution that could be used in conjunction with WFS or any third-party wholesale finance system; NFS Ascent deployed on The Cloud, a cloud-version of NFS Ascent; and NFS Digital, that includes Self Point of Sale, Mobile Account, Mobile Point of Sale, Mobile Dealer, Mobile Auditor, Mobile Collector, and Mobile Field Investigator. The company also provides Otoz Digital Auto-Retail and mobility orchestration, a white-label SaaS platform; Otoz Ecosystem, an API-based architecture; and Otoz Platform, a white label platform, which includes Dealer/Admin Tool and Customer Portals. In addition, it offers system integration, consulting, and information technology products and services. It serves blue chip organizations, Dow-Jones 30 Industrials, Fortune 500 manufacturers and financial institutions, and vehicle manufacturers. The company was incorporated in 1997 and is headquartered in Encino, California.