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Netscout Systems (NTCT)
NASDAQ:NTCT
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Netscout Systems
(NASDAQ:NTCT)64Neutral
Netscout Systems (NTCT) vs. S&P 500 (SPY)
Market Cap
$1.55B
Dividend YieldN/A
Average Volume (3M)480.59K
Price to Earnings (P/E)―
Beta (1Y)0.70
Revenue Growth-1.55%
EPS Growth-250.10%
CountryUS
Employees2,296
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)-5.86
Shares Outstanding71,754,690
10 Day Avg. Volume532,940
30 Day Avg. Volume480,587
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.90
Price to Cash Flow (P/CF)9.40
P/FCF Ratio9.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$25.00Price Target Upside16.01% Upside
Rating ConsensusHold
Number of Analyst Covering1
Netscout Systems Business Overview & Revenue Model
Company DescriptionNetScout Systems, Inc. (NTCT) is a leading provider of application and network performance management products and solutions. Operating in the technology sector, the company specializes in offering robust tools for network monitoring, visibility, and cybersecurity, enabling organizations to maintain optimal network performance and security. With its comprehensive suite of products, NetScout serves a wide range of industries including telecommunications, enterprise, and government sectors, helping them to detect and resolve network issues efficiently.
How the Company Makes MoneyNetScout Systems makes money primarily through the sale of its network performance management and cybersecurity solutions. The company's revenue streams include the sale of hardware and software products, as well as subscription services for ongoing software updates and support. Additionally, NetScout generates income from professional services such as consulting and training, which help customers optimize the use of their solutions. Key partnerships with telecommunications companies and large enterprises contribute significantly to its earnings, as these collaborations often lead to long-term contracts and recurring revenue.
Netscout Systems Financial Statement Overview
Summary
Netscout Systems faces challenges in profitability and revenue growth, as evidenced by the income statement metrics. Despite this, the balance sheet shows a solid equity position, and cash flows remain robust, providing liquidity and operational flexibility. However, sustained losses impact overall financial health and investor confidence.Income Statement
The trailing twelve months (TTM) data shows a decline in revenue and profitability indicators. The gross profit margin and net profit margin are concerning, with the company experiencing a negative net income. Revenue growth has been erratic, with recent periods showing a decline. The negative EBITDA margin highlights operational challenges.40
Negative
Balance Sheet
The balance sheet reflects moderate financial stability, with a reasonable debt-to-equity ratio. The equity ratio indicates a solid capital structure with a significant portion of assets funded by equity. However, return on equity is negative, driven by recent net losses, which is a concern for investors.65
Positive
Cash Flow
The cash flow statement is a strong point for the company, with positive operating and free cash flows. The free cash flow to net income ratio indicates that the company generates cash efficiently despite reported net losses. Operating cash flow has shown resilience, supporting the company's liquidity position.75
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 821.13M | 829.46M | 914.53M | 855.58M | 831.28M | 891.82M | Gross Profit |
| 610.06M | 642.04M | 691.43M | 641.39M | 609.18M | 649.63M | EBIT |
| 64.65M | -149.83M | 77.66M | 49.73M | 37.13M | 17.64M | EBITDA |
| -334.26M | -51.43M | 174.01M | 155.10M | 147.19M | 147.61M | Net Income Common Stockholders |
| -417.96M | -147.73M | 59.65M | 35.87M | 19.35M | -2.75M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 423.13M | 423.13M | 419.00M | 703.20M | 476.45M | 386.46M | Total Assets |
| 2.60B | 2.60B | 2.82B | 3.19B | 3.09B | 3.12B | Total Debt |
| 150.08M | 150.08M | 160.47M | 415.34M | 423.62M | 531.00M | Net Debt |
| -239.59M | -239.59M | -226.32M | -220.82M | -43.55M | 192.51M | Total Liabilities |
| 703.24M | 703.24M | 790.91M | 1.13B | 1.08B | 1.18B | Stockholders Equity |
| 1.89B | 1.89B | 2.03B | 2.06B | 2.01B | 1.94B |
| Cash Flow | Free Cash Flow | ||||
| 164.12M | 52.47M | 146.00M | 285.61M | 197.40M | 205.10M | Operating Cash Flow |
| 169.73M | 58.81M | 156.65M | 296.01M | 213.92M | 225.02M | Investing Cash Flow |
| 1.97M | 13.36M | 15.30M | -68.35M | 24.70M | -4.31M | Financing Cash Flow |
| -66.74M | -69.35M | -419.43M | -54.16M | -118.31M | -286.87M |
Netscout Systems Technical Analysis
Negative
21.55
Price Trends
22.78
Negative
22.28
Negative
20.98
Positive
Market Momentum
-0.27
Positive
32.34
Neutral
9.66
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTCT, the sentiment is Negative. The current price of 21.55 is below the 20-day moving average (MA) of 23.68, below the 50-day MA of 22.78, and above the 200-day MA of 20.98, indicating a neutral trend. The MACD of -0.27 indicates Positive momentum. The RSI at 32.34 is Neutral, neither overbought nor oversold. The STOCH value of 9.66 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NTCT.
Netscout Systems Risk Analysis
Netscout Systems disclosed 32 risk factors in its most recent earnings report. Netscout Systems reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Netscout Systems Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $16.15B | 27.87 | 18.38% | ― | 3.02% | 31.36% | |
74 Outperform | $251.67B | 27.72 | 20.18% | 2.52% | -5.34% | -30.57% | |
64 Neutral | $1.55B | ― | -27.49% | ― | -1.55% | -250.10% | |
60 Neutral | $11.97B | 41.77 | 6.02% | 2.44% | -8.82% | -10.01% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% | |
44 Neutral | $1.93B | ― | -237.76% | ― | -24.49% | -250.61% |
* Technology Sector Average
Performance Comparison
NTCT
Netscout Systems
21.55
0.26
1.22%
CSCO
Cisco Systems
63.26
15.60
32.73%
EXTR
Extreme Networks
14.56
2.53
21.03%
FFIV
F5 Networks
280.11
89.51
46.96%
JNPR
Juniper Networks
35.94
-0.61
-1.67%
Netscout Systems Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: -3.58% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong performance in the third quarter, particularly in the Cybersecurity and Service Assurance segments, with significant revenue growth and earnings per share exceeding expectations. However, challenges remain with a year-to-date decline in overall revenue and specific struggles in the Service Assurance and Service Provider verticals. The sentiment is cautiously optimistic with a positive outlook for the fiscal year end.Highlights
Exceeding Revenue and Earnings Expectations
Q3 fiscal year 2025 revenue was approximately $252 million, up 16% compared to the prior year period. Diluted earnings per share was $0.94, up approximately 29% from previous year.
Strong Cybersecurity Growth
Cybersecurity revenue increased approximately 29% in Q3 and 7% for the first nine months of fiscal year 2025.
Service Assurance Segment Performance
Service Assurance revenue in Q3 increased by approximately 9% due to early order acceleration.
Product Revenue Surge
Product revenue was $128.2 million for Q3, an increase of 33.8% year-over-year.
Operating Profit Margin Improvement
Operating profit margin for Q3 was 35.6%, compared with 29% in the same quarter last year.
Lowlights
Overall Revenue Decline for Nine Months
Revenue for the first nine months of fiscal year 2025 was approximately $618 million, down approximately 1% year-over-year.
Service Assurance Year-to-Date Decline
Service Assurance revenue decreased by 5.5% for the first nine months of fiscal year 2025.
Service Provider Customer Vertical Decrease
Service provider customer vertical revenue decreased 7.2% for the first nine months of fiscal year 2025.
Company Guidance
During NETSCOUT's Third Quarter Fiscal Year 2025 Financial Results Conference Call, the company reported strong performance with third-quarter revenue reaching approximately $252 million, marking a 16% increase from the prior year. This was driven by robust growth in both Cybersecurity, which saw a 29% revenue increase, and Service Assurance product lines. The company achieved a diluted earnings per share (EPS) of $0.94, up 29% year-over-year. For the first nine months of the fiscal year, revenue was $618 million, reflecting a slight 1% decrease due to prior year benefits from backlog-related revenue and a business divestiture. The corresponding EPS for this period was $1.70, representing a 3% increase. Looking ahead, NETSCOUT updated its fiscal year 2025 outlook, anticipating revenue between $810 million to $820 million and non-GAAP EPS in the range of $2.15 to $2.25, maintaining the midpoint from previous guidance. The company highlighted its confidence in meeting full fiscal year goals, supported by customer orders received earlier than expected and ongoing initiatives in addressing cybersecurity threats and service assurance needs.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.