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Netscout Systems (NTCT)
NASDAQ:NTCT
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Netscout Systems
(NASDAQ:NTCT)
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Rating:69Neutral
Price Target:
$25.00
▼(-3.03% Downside)
Netscout Systems' overall stock score is driven by its strong financial performance and positive earnings call, highlighting growth in the cybersecurity segment and improved profit margins. Technical analysis presents a neutral outlook, while valuation suggests moderate pricing. Challenges in specific revenue segments pose risks, but the company's financial stability and strategic focus on growth areas support a positive outlook.
Netscout Systems (NTCT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.86B
Dividend YieldN/A
Average Volume (3M)622.14K
Price to Earnings (P/E)25.8
Beta (1Y)1.00
Revenue Growth5.29%
EPS GrowthN/A
CountryUS
Employees2,273
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.34
Shares Outstanding71,875,270
10 Day Avg. Volume750,427
30 Day Avg. Volume622,138
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.69
Enterprise Value/Revenue1.54
Enterprise Value/Gross Profit1.96
Enterprise Value/Ebitda8.04
Forecast
1Y Price Target
$26.33Price Target Upside2.13% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
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: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call reflected a positive start to fiscal year 2026 for NETSCOUT, with strong growth in revenue and profitability driven primarily by the cybersecurity segment. The company demonstrated effective cost management and showcased innovative product solutions. However, there were some challenges in the service provider vertical, with a decline in revenue, and slower growth in the service assurance revenue.Q1-2026 Updates
Positive Updates
Strong Revenue Growth
Revenue for Q1 FY2026 was approximately $187 million, representing a 7% year-over-year increase driven by strong growth in the cybersecurity segment and timing of orders.
Increase in Cybersecurity Revenue
Cybersecurity revenue increased approximately 18% year-over-year, driven by strong growth in both enterprise and service provider customer verticals.
Improved Profit Margins
The company expanded both gross and operating profit margins, with non-GAAP gross profit margin increasing by 1.6 percentage points to 78.7%.
Significant Earnings Per Share Growth
Non-GAAP diluted earnings per share was $0.34, an increase of approximately 21% year-over-year.
Positive Cash Flow and Share Repurchase
Free cash flow for the quarter was $71.7 million, and the company repurchased approximately 761,000 shares of common stock for approximately $15 million.
Negative Updates
Decline in Service Provider Vertical Revenue
Revenue from the service provider customer vertical decreased by 5.6% year-over-year.
Minimal Growth in Service Assurance Revenue
Service assurance revenue increased by only 1.4% year-over-year, indicating slower growth compared to other segments.
Company Guidance
During NETSCOUT's First Quarter Fiscal 2026 Financial Results Conference Call, the company provided several key financial metrics and insights into its business strategy. NETSCOUT reported a revenue of approximately $187 million for Q1, marking a 7% year-over-year increase, driven by robust growth in its cybersecurity segment. The company achieved a non-GAAP gross profit margin of 78.7%, with product revenue increasing by 19.3% to $73 million and service revenue rising slightly by 0.3% to $113.8 million. Operating profit margin improved to 14.2% from 8% the previous year, and non-GAAP diluted earnings per share increased by 21% to $0.34. The cybersecurity segment saw an 18% growth, while the service assurance segment grew by 1%. The company reaffirmed its fiscal year 2026 revenue guidance of $825 million to $865 million and non-GAAP EPS outlook of $2.25 to $2.40, with a full-year effective tax rate expected to be around 20%. NETSCOUT also highlighted its strong cash position, ending the quarter with $543.5 million in cash and investments, and free cash flow of $71.7 million.Netscout Systems Financial Statement Overview
Summary
Netscout Systems shows mixed financial performance. While there are challenges with declining revenue and profitability, the company maintains a strong cash flow position and manageable leverage. However, the decrease in equity and assets is concerning.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.65
Positive
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.72
Positive
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.78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 834.86M | 822.68M | 829.46M | 914.53M | 855.58M | 831.28M |
| Gross Profit | 657.07M | 643.94M | 642.04M | 691.43M | 641.39M | 609.18M |
| EBITDA | 160.28M | -294.85M | -60.87M | 174.01M | 155.10M | 139.01M |
| Net Income | 72.78M | -366.92M | -147.73M | 59.65M | 35.87M | 19.35M |
Balance Sheet | ||||||
| Total Assets | 2.16B | 2.19B | 2.60B | 2.82B | 3.19B | 3.09B |
| Cash, Cash Equivalents and Short-Term Investments | 532.51M | 491.47M | 423.13M | 419.00M | 703.20M | 476.45M |
| Total Debt | 41.53M | 43.50M | 150.08M | 160.47M | 415.34M | 423.62M |
| Total Liabilities | 609.88M | 626.18M | 703.24M | 790.91M | 1.13B | 1.08B |
| Stockholders Equity | 1.55B | 1.56B | 1.89B | 2.03B | 2.06B | 2.01B |
Cash Flow | ||||||
| Free Cash Flow | 246.78M | 212.26M | 52.47M | 146.00M | 285.61M | 197.40M |
| Operating Cash Flow | 252.79M | 217.67M | 58.81M | 156.65M | 296.01M | 213.92M |
| Investing Cash Flow | -21.19M | -7.00M | 13.36M | 15.30M | -68.35M | 24.70M |
| Financing Cash Flow | -108.63M | -142.01M | -69.35M | -419.43M | -54.16M | -118.31M |
Netscout Systems Technical Analysis
Positive
25.78
Price Trends
23.58
Positive
23.45
Positive
22.69
Positive
Market Momentum
0.65
Positive
62.38
Neutral
72.77
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 25.78 is above the 20-day moving average (MA) of 25.33, above the 50-day MA of 23.58, and above the 200-day MA of 22.69, indicating a bullish trend. The MACD of 0.65 indicates Positive momentum. The RSI at 62.38 is Neutral, neither overbought nor oversold. The STOCH value of 72.77 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 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 | 1.32B | 26.65 | 25.01% | 1.32% | 11.04% | 18.70% | |
71 Outperform | 4.68B | 25.94 | 98.79% | ― | 6.29% | 62.03% | |
69 Neutral | $1.86B | 25.76 | 4.88% | ― | 5.29% | ― | |
67 Neutral | 1.99B | 277.08 | 1.23% | ― | 14.21% | ― | |
66 Neutral | 1.16B | 82.20 | 4.18% | ― | 11.51% | ― | |
62 Neutral | 1.22B | 30.75 | 4.61% | ― | -2.32% | 7.70% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
Performance Comparison
NTCT
Netscout Systems
25.78
4.40
20.58%
RDWR
Radware
26.90
5.11
23.45%
VRNT
Verint Systems
20.26
-5.31
-20.77%
ATEN
A10 Networks
18.31
4.31
30.79%
FIVN
Five9
25.12
-3.64
-12.66%
BOX
Box
32.30
-0.45
-1.37%
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.