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Netscout (NTCT)
:NTCT
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Netscout Systems
(NASDAQ:NTCT)
Rating:61Neutral
Price Target:
$24.50
▲(5.06%Upside)
Netscout Systems (NTCT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.66B
Dividend YieldN/A
Average Volume (3M)408.30K
Price to Earnings (P/E)―
Beta (1Y)0.87
Revenue Growth-0.82%
EPS Growth-146.80%
CountryUS
Employees2,273
SectorTechnology
Sector Strength83
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.52
Shares Outstanding71,328,735
10 Day Avg. Volume307,335
30 Day Avg. Volume408,295
Financial Highlights & Ratios
PEG Ratio-0.12
Price to Book (P/B)1.02
Price to Sales (P/S)0.00
P/FCF Ratio9.45
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$21.00Price Target Upside-9.95% Downside
Rating ConsensusHold
Number of Analyst Covering1
Netscout Systems Business Overview & Revenue Model
Company DescriptionNetScout Systems, Inc. provides service assurance and cybersecurity solutions for protect digital business services against disruptions in the United States, Europe, Asia, and internationally. The company offers nGeniusONE management software that enables customers to predict, preempt, and resolve network and service delivery problems, as well as facilitate the optimization and capacity planning of their network infrastructures; and specialized platforms and analytic modules that enable its customers to analyze and troubleshoot traffic in radio access and Wi-Fi networks. It also provides nGeniusPULSE, an active testing tool that enables enterprises to identify infrastructure performance issues and determine application availability, reliability, and performance; and nGenius Business Analytics solution, which enables service providers to analyze their network traffic. In addition, the company offers ISNG, an advanced passive network probe; packet flow systems that deliver targeted network traffic access to various monitoring and security tools and systems; and a suite of test access points that enable non-disruptive access to network traffic. Further, it provides cybersecurity solutions to protect their networks against distributed denial of service attacks under the Arbor brand, such as Arbor Sightline, Arbor Threat Mitigation System, Arbor Insight, Arbor Edge Defense, and Arbor Cloud. Additionally, it offers advanced threat detection solutions, such as Omnis Cyber Investigator. It serves enterprise customers in various industries, including financial services, technology, manufacturing, healthcare, utilities, education, transportation, and retail; mobile operators, wireline operators, cable operators, Internet service providers, and cloud providers; and governmental agencies through a direct sales force, and indirect reseller and distribution channels. NetScout Systems, Inc. was incorporated in 1984 and is headquartered in Westford, Massachusetts.
How the Company Makes MoneyNetscout Systems generates revenue through the sale of its network performance management and cybersecurity solutions. The company's primary revenue streams include the sales of software licenses, hardware products, and subscription services. Netscout's solutions are often utilized by large enterprises and service providers to enhance their network visibility and operational efficiency. Additionally, the company offers maintenance and support services, which provide recurring revenue and strengthen customer relationships. Significant partnerships with technology vendors and service providers also play a crucial role in expanding their market reach and enhancing their solutions' integration capabilities.
Netscout Systems Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q4-2025)
| % Change Since: 9.95%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
The earnings call highlights strong performance in the Cybersecurity segment and effective cost management contributing to financial stability. However, challenges remain in the Service Assurance segment and service provider revenue, leading to a decline in overall revenue and EPS. The company remains optimistic about future growth prospects, particularly in Cybersecurity, despite economic uncertainties.Q4-2025 Updates
Positive Updates
Strong Fourth Quarter Revenue
Fourth-quarter revenue exceeded expectations, driven by solid performance in the Cybersecurity product line. Revenue increased 1% to approximately $205 million.
Cybersecurity Growth
Cybersecurity offerings delivered nearly 7% year-over-year revenue growth, driven by strong momentum within the enterprise customer vertical.
Cost Management and Financial Stability
Non-GAAP EPS for fiscal year 2025 was $2.22, a 1% improvement over fiscal year 2024, achieved through efficient cost management.
Strong Cash Flow
NetScout ended fiscal year 2025 with $492.5 million in cash and generated free cash flow of $211 million for the year.
Customer Wins and Market Expansion
Notable wins in Service Assurance and Cybersecurity with leading financial services and cloud service providers, respectively.
Negative Updates
Decline in Service Assurance Revenue
Service Assurance revenue declined approximately 4% year over year, partially due to the divestiture of the Test Optimization business and lower radio frequency propagation modeling project revenue.
Operating Margin and EPS Decline
Quarterly non-GAAP diluted earnings per share was $0.52, down approximately 5%, compared to the prior year.
Service Provider Revenue Decrease
Service provider customer vertical revenue decreased 10.1% year over year.
Company Guidance
During NetScout's fourth-quarter and full fiscal year 2025 earnings call, the company reported robust financial performance, notably in their Cybersecurity product line, which experienced a nearly 7% year-over-year revenue growth. The fourth-quarter revenue increased by 1% to approximately $205 million, while non-GAAP diluted earnings per share stood at $0.52, reflecting a 5% decrease year-over-year. The full fiscal year 2025 concluded with a revenue of approximately $823 million, remaining essentially flat when adjusted for the divestiture of the Test Optimization business. NetScout achieved a growth in non-GAAP EPS to $2.22 per diluted share, a 1% increase from the previous year, due to their focus on cost management. The company highlighted a strong cash position with $492.5 million in cash and marketable securities and reported a significant free cash flow of $211 million for the year. Looking forward to fiscal year 2026, NetScout anticipates revenue growth in the range of $825 million to $865 million and non-GAAP diluted EPS between $2.25 and $2.40, while maintaining a strategic focus on AI and cybersecurity product investments.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
Positive
23.32
Price Trends
21.62
Positive
22.15
Positive
21.75
Positive
Market Momentum
0.43
Positive
60.07
Neutral
57.14
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 23.32 is above the 20-day moving average (MA) of 23.11, above the 50-day MA of 21.62, and above the 200-day MA of 21.75, indicating a bullish trend. The MACD of 0.43 indicates Positive momentum. The RSI at 60.07 is Neutral, neither overbought nor oversold. The STOCH value of 57.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NTCT.
Netscout Systems Risk Analysis
Netscout Systems disclosed 33 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 1 New Risks
1.
International trade policies, including trade protection measures such as tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects. Q1, 2025
Netscout Systems Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $1.65B | 22.84 | 16.09% | 1.99% | 3.84% | 10.25% | |
75 Outperform | $1.13B | 24.58 | 5.32% | ― | -2.09% | 76.96% | |
74 Outperform | $1.28B | 26.72 | 24.36% | 1.35% | 4.90% | 9.91% | |
72 Outperform | $1.03B | 91.59 | 3.78% | ― | 9.54% | ― | |
65 Neutral | $2.16B | ― | -78.83% | ― | -11.00% | -792.47% | |
62 Neutral | $11.72B | 10.43 | -7.10% | 2.91% | 7.41% | -7.94% | |
61 Neutral | $1.66B | ― | -21.26% | ― | -0.82% | -146.80% |
* Technology Sector Average
Performance Comparison
NTCT
Netscout Systems
23.32
4.46
23.65%
EXTR
Extreme Networks
16.63
4.77
40.22%
RDWR
Radware
24.28
5.53
29.49%
SPNS
Sapiens
29.72
-2.41
-7.50%
VRNT
Verint Systems
19.09
-16.99
-47.09%
ATEN
A10 Networks
18.26
4.28
30.62%
Netscout Systems Corporate Events
Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
Netscout Systems Announces CFO and COO Retirement
Positive
May 8, 2025
On May 5, 2025, NETSCOUT SYSTEMS announced the retirement of its Chief Financial Officer, Jean Bua, and Chief Operating Officer, Michael Szabados, effective May 31, 2025. They will transition to advisory roles until June 2026. Anthony Piazza and Sanjay Munshi will assume the roles of CFO and COO, respectively, on June 1, 2025. The company also reported strong financial results for the fourth quarter and full fiscal year 2025, with a focus on cybersecurity solutions driving revenue. NETSCOUT aims to continue investing in innovation and maintaining customer relationships to support its long-term strategy.
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.