Morgan Stanley analyst Meta Marshall has maintained their bullish stance on NTSK stock, giving a Buy rating on December 12.
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Meta Marshall has given his Buy rating due to a combination of factors that highlight Netskope, Inc.’s strong performance and growth potential. The company demonstrated an acceleration in Annual Recurring Revenue (ARR) growth in the third fiscal quarter, which is a positive indicator of its financial health and market position. This growth was supported by increased hiring and improved sales representative productivity, which are expected to sustain the company’s ability to grow at a rate of 25-30% annually.
Furthermore, Netskope’s strategic focus on SASE adoption, AI security investments, and platform expansion positions it well within the cybersecurity market, which is often challenged by complexities such as mergers and acquisitions or transitions to SaaS models. The company’s performance in the third quarter, including a 34% year-over-year increase in ARR and a 118% Net Revenue Retention (NRR) rate, underscores its capability to upsell additional modules and expand its customer base. The attractive valuation, trading at 0.4x EV/Sales compared to the cybersecurity average of 0.6x, presents a compelling investment opportunity, prompting Marshall to recommend buying on any market weakness.
In another report released on December 12, Mizuho Securities also reiterated a Buy rating on the stock with a $26.00 price target.