Netscout Systems (NTCT) AI Stock Analysis

• Market Cap: $2.03B
• Dividend Yield: N/A
• Average Volume (3M): 496.83K
• Price to Earnings (P/E): 22.8
• Beta (1Y): 1.04
• Revenue Growth: 9.60%
• EPS Growth: N/A
• Country: US
• Employees: 2,273
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.62
• Shares Outstanding: 72,193,670
• 10 Day Avg. Volume: 489,642
• 30 Day Avg. Volume: 496,827
• PEG Ratio: -0.03
• Price to Book (P/B): 0.97
• Price to Sales (P/S): 1.83
• P/FCF Ratio: 7.10
• Enterprise Value/Market Cap: 0.70
• Enterprise Value/Revenue: 1.63
• Enterprise Value/Gross Profit: 2.06
• Enterprise Value/Ebitda: 8.09
• 1Y Price Target: $33.00
• Price Target Upside: 17.52% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 2.33
• Revenue Forecast (FY): $847.14M

• Rating: 72 Outperform
• Price Target: $28.00 ▼(-0.28% Downside)

Netscout Systems' overall stock score is driven by strong financial performance and a positive earnings call, highlighting revenue and earnings growth. Technical analysis indicates a potential reversal from oversold conditions, while valuation remains reasonable. Challenges in the Service Provider market and external risks like government shutdowns and tariffs are notable concerns.

Positive Factors

Revenue Growth

Consistent revenue growth, particularly in the cybersecurity segment, indicates strong market demand and effective sales strategies, supporting long-term business expansion.

Cash Flow Performance

Strong cash flow performance enhances financial flexibility, allowing for reinvestment in growth initiatives and shareholder returns, supporting sustainable business operations.

Profit Margin Improvement

Improved profit margins reflect efficient cost management and pricing strategies, contributing to better profitability and competitive positioning in the market.

Negative Factors

Service Provider Vertical Decline

A decline in the service provider vertical may indicate challenges in maintaining market share or competitive pressures, potentially impacting overall revenue growth.

Service Assurance Slow Growth

Minimal growth in the service assurance segment suggests potential stagnation, which could hinder overall business expansion if not addressed.

Historical Earnings Volatility

Earnings volatility can signal underlying operational challenges, which may affect investor confidence and the company's ability to deliver consistent financial performance.

Netscout Systems Business Overview & Revenue Model

Company Description

Netscout Systems (NTCT) is a leading provider of application and network performance management solutions, serving various sectors including telecommunications, healthcare, and enterprise IT. The company specializes in ensuring the reliability and performance of networked applications through its advanced visibility and analytics solutions. Key products include the nGeniusONE platform, which provides real-time insights into application performance, and Arbor Networks, which focuses on cybersecurity and DDoS protection.

How the Company Makes Money

Netscout generates revenue primarily through the sale of its software solutions, hardware appliances, and subscription services. The company has a diverse revenue model that includes license fees for its software products, maintenance and support services, and recurring revenue from cloud-based offerings. Key revenue streams also come from professional services, such as consulting and training, which assist customers in optimizing their network performance. Additionally, Netscout has established strategic partnerships with various technology firms and telecommunications providers, enhancing its market reach and capabilities, thus contributing to its overall earnings.

Netscout Systems Financial Statement Overview

Summary

Netscout Systems demonstrates solid financial performance with strong profitability and cash flow metrics. The company has improved its margins and profitability, reduced leverage, and maintained a healthy cash flow position. While revenue growth is moderate, the overall financial health is stable, with a positive outlook for continued improvement.

Income Statement

Netscout Systems shows a strong gross profit margin of 78.7% TTM, indicating efficient cost management. The net profit margin improved significantly to 8.7% TTM from a negative margin in the previous annual report, reflecting a turnaround in profitability. Revenue growth is modest at 3.3% TTM, but the positive trend is a good sign. EBIT and EBITDA margins have also improved, signaling better operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is low at 0.027 TTM, indicating low leverage and financial stability. Return on equity has improved to 4.8% TTM from negative in the previous period, showing better profitability. The equity ratio is strong, suggesting a solid financial foundation. However, the company has experienced fluctuations in equity and returns in the past.

Cash Flow

Netscout Systems has shown a healthy free cash flow growth rate of 3.66% TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is robust at 0.65, and the free cash flow to net income ratio is nearly 1, demonstrating efficient cash conversion. The company has consistently generated positive free cash flow, supporting its financial health.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	862.77M	822.68M	829.46M	914.53M	855.58M	831.28M
Gross Profit	683.43M	643.94M	642.04M	691.43M	641.39M	609.18M
EBITDA	174.28M	-294.85M	-60.87M	174.01M	146.72M	139.01M
Net Income	89.58M	-366.92M	-147.73M	59.65M	35.87M	19.35M
Balance Sheet
Total Assets	2.18B	2.19B	2.60B	2.82B	3.19B	3.09B
Cash, Cash Equivalents and Short-Term Investments	516.86M	491.47M	423.13M	419.00M	703.20M	476.45M
Total Debt	43.55M	43.50M	150.08M	160.47M	415.34M	423.62M
Total Liabilities	602.63M	626.18M	703.24M	790.91M	1.13B	1.08B
Stockholders Equity	1.57B	1.56B	1.89B	2.03B	2.06B	2.01B
Cash Flow
Free Cash Flow	255.81M	210.97M	52.47M	146.00M	285.61M	197.40M
Operating Cash Flow	263.18M	217.67M	58.81M	156.65M	296.01M	213.92M
Investing Cash Flow	-20.41M	-7.00M	13.36M	15.30M	-68.35M	24.70M
Financing Cash Flow	-125.02M	-142.01M	-69.35M	-419.43M	-54.16M	-118.31M

Netscout Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 28.08
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTCT, the sentiment is Positive. The current price of 28.08 is above the 20-day moving average (MA) of 27.21, above the 50-day MA of 27.04, and above the 200-day MA of 23.95, indicating a bullish trend. The MACD of 0.24 indicates Negative momentum. The RSI at 58.49 is Neutral, neither overbought nor oversold. The STOCH value of 69.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NTCT.

Netscout Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATEN	79 Outperform	$1.29B	26.32	23.88%	1.34%	10.27%	3.52%
NTCT	72 Outperform	$2.03B	22.85	5.91%	―	9.60%	―
FIVN	69 Neutral	$1.61B	57.70	4.67%	―	12.48%	―
RDWR	65 Neutral	$1.04B	63.91	5.09%	―	10.40%	―
BOX	65 Neutral	$4.36B	24.55	204.27%	―	7.21%	58.61%
VRNT	64 Neutral	―	―	4.72%	―	-2.32%	7.70%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Netscout Systems Corporate Events

Netscout Systems Approves Equity Plan Amendment

On September 10, 2025, NetScout Systems, Inc. held its annual meeting where stockholders approved an amendment to increase the number of shares in the company’s 2019 Equity Incentive Plan by 3.5 million. Additionally, stockholders elected four directors for three-year terms, approved executive compensation, and ratified PricewaterhouseCoopers LLP as the independent auditor for the fiscal year ending March 31, 2026.