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Netscout Systems (NTCT)
NASDAQ:NTCT
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Netscout Systems
(NASDAQ:NTCT)
Rating:58Neutral
Price Target:
$22.50
▲(2.60% Upside)
Netscout Systems (NTCT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.55B
Dividend YieldN/A
Average Volume (3M)678.81K
Price to Earnings (P/E)21.6
Beta (1Y)0.97
Revenue Growth5.29%
EPS GrowthN/A
CountryUS
Employees2,273
SectorTechnology
Sector Strength98
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.34
Shares Outstanding71,875,270
10 Day Avg. Volume627,976
30 Day Avg. Volume678,813
Financial Highlights & Ratios
PEG Ratio-0.03
Price to Book (P/B)0.97
Price to Sales (P/S)1.83
P/FCF Ratio7.10
Enterprise Value/Market Cap0.83
Enterprise Value/Revenue1.57
Enterprise Value/Gross Profit2.07
Enterprise Value/Ebitda-3.86
Forecast
1Y Price Target
$21.75Price Target Upside-0.82% Downside
Rating ConsensusHold
Number of Analyst Covering2
Netscout Systems Business Overview & Revenue Model
Company DescriptionNetscout Systems (NTCT) is a global provider of application and network performance management solutions. The company specializes in delivering visibility, troubleshooting, and security solutions across a range of sectors, including telecommunications, financial services, and cloud service providers. Its core products include software and hardware solutions that help organizations monitor, analyze, and optimize their IT infrastructures, ensuring optimal performance and security for their applications and networks.
How the Company Makes MoneyNetscout generates revenue primarily through the sale of its software and hardware products, which are designed to enhance network performance and security. The company operates on a subscription-based model for many of its software solutions, providing recurring revenue through annual subscriptions and maintenance contracts. Additionally, Netscout earns revenue from professional services, such as consulting, deployment, and training, which help clients integrate its solutions into their existing systems. Strategic partnerships with telecommunications companies and technology providers also contribute to its earnings, as these alliances often lead to joint offerings and expanded market reach, enhancing overall sales.
Netscout Systems Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q1-2026)
| % Change Since: 0.97%|
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call presented a positive outlook with strong revenue and earnings growth, driven primarily by cybersecurity advancements and new product enhancements. The company demonstrated successful customer acquisitions and maintained a strong liquidity position. However, challenges such as a decline in service provider revenue and macroeconomic uncertainty were noted.Q1-2026 Updates
Positive Updates
Strong Revenue Growth
Revenue for Q1 of fiscal year 2026 was approximately $187 million, representing a 7% year-over-year increase. This growth was driven by strong performance in the cybersecurity area.
Increased Earnings
Non-GAAP diluted earnings per share increased approximately 21% year-over-year to $0.34, reflecting the benefit of restructuring and cost management initiatives.
Cybersecurity Revenue Surge
Cybersecurity revenue increased by 18% year-over-year, driven by strong growth in both enterprise and service provider customer verticals.
Successful Product Enhancements
Introduction of new AI-backed enhancements to NETSCOUT Arbor Edge Defense and NETSCOUT Arbor Enterprise Manager Adaptive DDoS solutions to enhance defense and improve reporting.
Major Customer Wins
Secured a high 7-figure order with a U.S. government agency and a low 7-figure deal with a major Latin American financial institution, reflecting strong traction in both service assurance and cybersecurity solutions.
Strong Liquidity Position
Ended the first quarter with $543.5 million in cash, cash equivalents, and marketable securities, representing an increase of $51 million since the end of fiscal year 2025.
Negative Updates
Service Provider Revenue Decline
Service provider customer vertical revenue decreased 5.6% year-over-year, despite growth in the enterprise customer vertical.
Minor Service Revenue Increase
Service revenue increased only 0.3% year-over-year, highlighting a slower growth rate compared to product revenue.
Macro-Economic Uncertainty
The company remains cautious amid ongoing macroeconomic uncertainty, which may impact future performance.
Company Guidance
During NETSCOUT's First Quarter Fiscal 2026 Financial Results Conference Call, the company reported a 7% year-over-year increase in revenue to approximately $187 million, driven by strong growth in the cybersecurity segment, which saw an 18% increase. The company also expanded its gross profit margin, achieving a non-GAAP diluted earnings per share of $0.34, reflecting a 21% year-over-year increase. The service assurance revenue grew by 1%, primarily supported by enterprise customer investments in digital transformation and AIOps. Geographically, the U.S. accounted for 54% of the revenue. NETSCOUT also announced enhancements in their cybersecurity offerings, including AI-backed solutions and alignment with the NIST Zero-Trust security framework, reinforcing their strategic position in the market. The company reaffirmed its fiscal year 2026 revenue guidance of $825 million to $865 million and non-GAAP EPS of $2.25 to $2.40.Netscout Systems Financial Statement Overview
Summary
Netscout Systems shows mixed financial performance with declining revenue and profitability challenges. However, it maintains strong cash flow and manageable leverage, though declining equity is a concern.Income Statement
Netscout Systems has experienced declining revenue over the past year, with total revenue decreasing from $914.5 million in 2023 to $822.7 million in 2025. The company has also faced consistent operating losses, as indicated by negative EBIT and net income in the most recent year. Gross profit margins have remained stable, but the net profit margin has been negative, highlighting profitability challenges.45
Neutral
Balance Sheet
The balance sheet shows a moderate debt-to-equity ratio, indicating manageable leverage. There is a significant decrease in stockholders' equity, which can impact financial stability. The equity ratio remains healthy, suggesting a stable asset base. However, the overall decrease in total assets and equity over time is a concern.60
Neutral
Cash Flow
Netscout Systems has maintained a positive free cash flow, which is a positive indicator of financial health. The company's operating cash flow has grown significantly compared to previous years, improving its ability to cover operational expenses. The free cash flow to net income ratio is favorable, showing effective cash management despite negative net income.70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 821.13M | 822.68M | 829.46M | 914.53M | 855.58M | 831.28M |
| Gross Profit | 623.17M | 643.94M | 642.04M | 691.43M | 641.39M | 609.18M |
| EBITDA | -334.26M | -294.85M | -60.87M | 174.01M | 155.10M | 139.01M |
| Net Income | -417.96M | -366.92M | -147.73M | 59.65M | 35.87M | 19.35M |
Balance Sheet | ||||||
| Total Assets | 2.17B | 2.19B | 2.60B | 2.82B | 3.19B | 3.09B |
| Cash, Cash Equivalents and Short-Term Investments | 426.90M | 491.47M | 423.13M | 419.00M | 703.20M | 476.45M |
| Total Debt | 117.76M | 43.50M | 150.08M | 160.47M | 415.34M | 423.62M |
| Total Liabilities | 654.16M | 626.18M | 703.24M | 790.91M | 1.13B | 1.08B |
| Stockholders Equity | 1.52B | 1.56B | 1.89B | 2.03B | 2.06B | 2.01B |
Cash Flow | ||||||
| Free Cash Flow | 164.12M | 212.26M | 52.47M | 146.00M | 285.61M | 197.40M |
| Operating Cash Flow | 169.73M | 217.67M | 58.81M | 156.65M | 296.01M | 213.92M |
| Investing Cash Flow | 1.97M | -7.00M | 13.36M | 15.30M | -68.35M | 24.70M |
| Financing Cash Flow | -66.74M | -142.01M | -69.35M | -419.43M | -54.16M | -118.31M |
Netscout Systems Technical Analysis
Negative
21.93
Price Trends
23.07
Negative
22.25
Negative
22.25
Negative
Market Momentum
-0.46
Negative
46.37
Neutral
66.07
Neutral
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 21.93 is below the 20-day moving average (MA) of 22.01, below the 50-day MA of 23.07, and below the 200-day MA of 22.25, indicating a bearish trend. The MACD of -0.46 indicates Negative momentum. The RSI at 46.37 is Neutral, neither overbought nor oversold. The STOCH value of 66.07 is Neutral, 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 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 0 New Risks
Netscout Systems Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $4.61B | 24.67 | 152.34% | ― | 4.88% | 80.94% | |
74 Outperform | $1.26B | 25.44 | 24.39% | 1.40% | 11.04% | 18.70% | |
69 Neutral | $1.26B | 27.05 | 5.32% | ― | -2.09% | 76.96% | |
65 Neutral | $1.88B | 270.10 | 1.42% | ― | 14.21% | ― | |
64 Neutral | $1.04B | 75.58 | 4.46% | ― | 11.51% | ― | |
61 Neutral | $35.87B | 6.13 | -9.30% | 2.06% | 7.63% | -6.38% | |
58 Neutral | $1.55B | 21.58 | 4.88% | ― | 5.29% | ― |
* Technology Sector Average
Performance Comparison
NTCT
Netscout Systems
21.93
3.34
17.97%
RDWR
Radware
24.29
3.05
14.36%
VRNT
Verint Systems
19.97
-11.01
-35.54%
ATEN
A10 Networks
17.13
4.65
37.26%
FIVN
Five9
24.05
-8.31
-25.68%
BOX
Box
31.04
3.69
13.49%
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
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.