NasdaqCM:NETE

Stock Analysis Report

Executive Summary

Net Element, Inc. operates as a financial technology and value-added solutions company in North America, Russia, and the Commonwealth of Independent States.

Snowflake

Fundamentals

Overvalued with concerning outlook.

Share Price & News

How has Net Element's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-3.1%

NETE

-4.4%

US Software

0.07%

US Market


1 Year Return

-12.7%

NETE

19.3%

US Software

8.9%

US Market

Return vs Industry: NETE underperformed the US Software industry which returned 19.3% over the past year.

Return vs Market: NETE underperformed the US Market which returned 8.9% over the past year.


Shareholder returns

NETEIndustryMarket
7 Day-3.1%-4.4%0.07%
30 Day-15.9%-4.4%-0.3%
90 Day18.0%-9.3%-1.6%
1 Year-12.7%-12.7%21.1%19.3%11.3%8.9%
3 Year-63.3%-63.3%108.2%99.8%46.3%36.8%
5 Year-97.0%-97.0%157.9%139.3%62.1%44.3%

Price Volatility Vs. Market

How volatile is Net Element's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Net Element undervalued compared to its fair value and its price relative to the market?

2.28x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: Insufficient data to calculate NETE's fair value to establish if it is undervalued.

Significantly Below Fair Value: Insufficient data to calculate NETE's fair value to establish if it is undervalued.


Price To Earnings Ratio

PE vs Industry: NETE is unprofitable, so we can't compare its PE Ratio to the Software industry average.

PE vs Market: NETE is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate NETE's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: NETE is good value based on its PB Ratio (2.3x) compared to the US Software industry average (5.3x).


Next Steps

Future Growth

How is Net Element forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

8.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NETE is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: NETE is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: NETE is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: NETE's revenue (7.7% per year) is forecast to grow faster than the US market (7.2% per year).

High Growth Revenue: NETE's revenue (7.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if NETE's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Net Element performed over the past 5 years?

24.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: NETE is unprofitable, but has reduced losses over the past 5 years at a rate of 24.3% per year.

Accelerating Growth: Unable to compare NETE's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: NETE is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (19.1%).


Return on Equity

High ROE: NETE has a negative Return on Equity (-65.68%), as it is currently unprofitable.


Return on Assets

ROA vs Industry: NETE is currently unprofitable, so its Return on Assets is negative.


Return on Capital Employed

ROCE Improving: NETE is currently unprofitable, so its Return on Capital Employed is negative.


Next Steps

Financial Health

How is Net Element's financial position?


Financial Position Analysis

Short Term Liabilities: NETE's short term assets ($6.9M) do not cover its short term liabilities ($7.9M)

Long Term Liabilities: NETE's short term assets (6.9M) do not cover its long term liabilities (7.5M)


Debt to Equity History and Analysis

Debt Level: NETE's debt to equity ratio (92.6%) is considered high

Reducing Debt: NETE had negative shareholder equity 5 years ago, but is now positive and has therefore improved.


Balance Sheet

Inventory Level: NETE has a low level of unsold assets or inventory.

Debt Coverage by Assets: NETE's debt is not covered by short term assets (assets are 0.9x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: NETE has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: NETE has less than a year of cash runway if free cash flow continues to reduce at historical rates of -35.6% each year


Next Steps

Dividend

What is Net Element's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.5%forecastin3Yearsn/a

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: Unable to evaluate NETE's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate NETE's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.

Stable Dividend: Insufficient data to determine if NETE's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if NETE's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of NETE's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Net Element's salary, the management and board of directors tenure and is there insider trading?

5.6yrs

Average management tenure


CEO

Oleg Firer (42yo)

6.5yrs

Tenure

US$955,868

Compensation

Mr. Oleg Firer has been Chief Executive Officer of Net Element, Inc. since April 16, 2013 and has also been its Director since April 16, 2013 and Executive Chairman since November, 2018. Mr. Firer served a ...


CEO Compensation Analysis

Compensation vs. Market: Oleg's total compensation ($USD955.87K) is about average for companies of similar size in the US market ($USD509.30K).

Compensation vs Earnings: Oleg's compensation has been consistent with company performance over the past year.


Management Age and Tenure

5.6yrs

Average Tenure

53yo

Average Age

Experienced Management: NETE's management team is seasoned and experienced (5.6 years average tenure).


Board Age and Tenure

1.6yrs

Average Tenure

60yo

Average Age

Experienced Board: NETE's board of directors are not considered experienced ( 1.6 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown


Management Team

  • Oleg Firer (42yo)

    Executive Chairman & CEO

    • Tenure: 6.5yrs
    • Compensation: US$955.87k
  • Steven Wolberg (60yo)

    Chief Legal Officer & Secretary

    • Tenure: 6.5yrs
    • Compensation: US$241.73k
  • Vlad Sadovskiy

    Director of Trading Operations TOT Payments

    • Tenure: 1.2yrs
  • Shawn Brown

    Head of Risk Management

    • Tenure: 0yrs
  • Andrey Krotov

    Chief Technology Officer

    • Tenure: 5.6yrs
  • Alexander Borisov

    Head of Online Solutions

    • Tenure: 0yrs
  • Giovanni Di Febo

    Head of Acquiring & Compliance

    • Tenure: 0yrs
  • Jeffrey Ginsberg (53yo)

    Chief Financial Officer

    • Tenure: 1.3yrs
    • Compensation: US$131.09k

Board Members

  • Howard Ash (60yo)

    Director

    • Tenure: 3.3yrs
    • Compensation: US$63.05k
  • Oleg Firer (42yo)

    Executive Chairman & CEO

    • Tenure: 6.5yrs
    • Compensation: US$955.87k
  • John Wiegand (62yo)

    Director

    • Tenure: 0.08yrs
  • Jon Najarian (61yo)

    Director

    • Tenure: 1.6yrs
    • Compensation: US$25.55k
  • Jonathan Fichman (48yo)

    Director

    • Tenure: 1.6yrs
    • Compensation: US$25.55k

Company Information

Net Element, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Net Element, Inc.
  • Ticker: NETE
  • Exchange: NasdaqCM
  • Founded: 2004
  • Industry: Application Software
  • Sector: Software
  • Market Cap: US$18.120m
  • Shares outstanding: 4.12m
  • Website: https://www.netelement.com

Number of Employees


Location

  • Net Element, Inc.
  • 3363 NE 163rd Street
  • Suite 705
  • North Miami Beach
  • Florida
  • 33160
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NETENasdaqCM (Nasdaq Capital Market)YesCommon StockUSUSDOct 2012
1N52DB (Deutsche Boerse AG)YesCommon StockDEEUROct 2012

Biography

Net Element, Inc. operates as a financial technology and value-added solutions company in North America, Russia, and the Commonwealth of Independent States. It operates in two segments, North American Tran ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/23 00:18
End of Day Share Price2019/10/22 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.