Netskope, Inc. (NTSK) AI Stock Analysis

• Market Cap: $7.61B
• Dividend Yield: N/A
• Average Volume (3M): 2.11M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.07
• Revenue Growth: 31.27%
• EPS Growth: -86.64%
• Country: US
• Employees: 2,605
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Services
• EPS (TTM): N/A
• Shares Outstanding: 54,970,000
• 10 Day Avg. Volume: 2,951,182
• 30 Day Avg. Volume: 2,109,813
• PEG Ratio: -0.26
• Price to Book (P/B): -14.81
• Price to Sales (P/S): 13.36
• P/FCF Ratio: -47.61
• Enterprise Value/Market Cap: 1.18
• Enterprise Value/Revenue: 17.46
• Enterprise Value/Gross Profit: 26.38
• Enterprise Value/Ebitda: -17.46
• 1Y Price Target: $27.21
• Price Target Upside: 42.83% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 15
• EPS Forecast (FY): -1.2
• Revenue Forecast (FY): $689.81M

• Rating: 47 Neutral
• Price Target: $19.00 ▼(-0.26% Downside)

Netskope's overall stock score reflects its financial instability and challenges with profitability, despite improvements in revenue and cash flow. Technical indicators show mixed signals, and valuation remains unattractive due to negative earnings. The earnings call provided positive growth insights but also highlighted significant expenses and market uncertainties.

Positive Factors

Revenue Growth

Sustained revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion and stability.

Product Adoption

High product adoption across the customer base suggests strong product-market fit and customer reliance, enhancing retention and cross-selling opportunities.

Strategic Partnerships

Strategic alliances with industry leaders enhance Netskope's integration capabilities and market reach, driving future growth and competitive advantage.

Negative Factors

Profitability Challenges

Persistent profitability issues can hinder reinvestment in growth initiatives and may affect long-term financial health and investor confidence.

High Leverage

High leverage and negative equity increase financial risk, potentially limiting operational flexibility and increasing vulnerability to economic downturns.

Stock-Based Compensation

Significant stock-based compensation can dilute shareholder value and impact net income, affecting long-term profitability and financial performance.

Netskope, Inc. Business Overview & Revenue Model

Company Description

Netskope, Inc. (NTSK) is a leading player in the cybersecurity sector, specializing in cloud security and secure access service edge (SASE) solutions. The company provides a comprehensive platform that enables organizations to protect their data and applications across various cloud environments, on-premises infrastructure, and remote workforces. Its core products include cloud access security broker (CASB) services, data loss prevention (DLP), secure web gateway (SWG), and zero trust network access (ZTNA), designed to enhance visibility, security, and compliance in a rapidly evolving digital landscape.

How the Company Makes Money

Netskope generates revenue primarily through subscription-based models for its cloud security services, which include CASB, SWG, DLP, and ZTNA. Customers typically pay recurring fees based on the number of users or the volume of data processed, providing a stable and predictable revenue stream. Additionally, the company may offer professional services and consulting as value-added offerings. Significant partnerships with major cloud service providers and technology companies enhance Netskope's market reach and integration capabilities, further driving customer acquisition and retention. This strategic positioning in the growing cybersecurity market is pivotal to its revenue growth.

Netskope, Inc. Financial Statement Overview

Summary

Netskope, Inc. shows improvement in gross profit margin and free cash flow management. However, the company faces challenges with profitability, high leverage, and negative equity, indicating financial instability.

Income Statement

Netskope, Inc. shows a significant improvement in gross profit margin from 59.78% to 64.63%, indicating better cost management. However, the company is still struggling with negative net profit margins, though there is a slight improvement from -84.75% to -65.86%. The EBIT and EBITDA margins remain negative, reflecting ongoing operational challenges. Revenue growth is positive, but profitability remains a concern.

Balance Sheet

The balance sheet reveals a negative stockholders' equity, leading to a concerning debt-to-equity ratio, though it has improved from -1.98 to -1.36. The return on equity is negative, indicating losses relative to equity. The equity ratio is not directly provided, but the negative equity suggests financial instability and high leverage.

Cash Flow

Cash flow analysis shows a reduction in negative free cash flow, with a free cash flow to net income ratio improving from 1.25 to 1.37. However, operating cash flow remains negative, indicating ongoing cash management issues. The company needs to focus on improving cash generation from operations.

Breakdown	TTM	Dec 2024	Dec 2023
Income Statement
Total Revenue	512.67M	538.27M	406.88M
Gross Profit	339.40M	347.90M	243.25M
EBITDA	-512.80M	-204.20M	-263.25M
Net Income	-622.62M	-354.51M	-344.85M
Balance Sheet
Total Assets	1.72B	858.51M	773.79M
Cash, Cash Equivalents and Short-Term Investments	1.15B	246.69M	286.96M
Total Debt	814.98M	662.70M	508.50M
Total Liabilities	1.56B	1.34B	1.03B
Stockholders Equity	151.03M	-485.59M	-256.82M
Cash Flow
Free Cash Flow	10.39M	-151.10M	-208.32M
Operating Cash Flow	19.95M	-110.68M	-167.17M
Investing Cash Flow	-98.64M	2.24M	176.95M
Financing Cash Flow	897.33M	109.86M	6.29M

Netskope, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CSCO	77 Outperform	$307.40B	29.34	23.01%	2.08%	8.91%	14.53%
CHKP	76 Outperform	$20.62B	20.53	34.19%	―	6.31%	25.27%
GRMN	74 Outperform	$40.07B	25.68	19.66%	1.67%	16.56%	3.19%
FTNT	71 Outperform	$61.14B	33.56	228.04%	―	14.78%	22.52%
FIS	64 Neutral	$34.75B	211.37	1.15%	2.40%	4.26%	-75.98%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
NTSK	47 Neutral	$7.61B	-10.59	―	―	31.27%	-86.64%

Netskope, Inc. Corporate Events

Netskope Reports Strong Q3 2026 Financial Results

On December 11, 2025, Netskope announced its financial results for the third quarter of fiscal year 2026, ending October 31, 2025. The company reported a 34% year-over-year increase in Annual Recurring Revenue, reaching $754 million, and a 33% rise in quarterly revenue to $184.2 million. Despite a GAAP loss from operations of $447 million, Netskope achieved a positive free cash flow of $10.6 million. The company completed its Initial Public Offering in September, raising $992.2 million, and expanded its NewEdge private cloud network with new data centers. Netskope also announced enhancements to its Netskope One platform and deepened its collaboration with Microsoft, positioning itself strongly in the security and networking industry.

Netskope, Inc. Completes IPO with Stock Reclassification

On September 19, 2025, Netskope, Inc. completed its initial public offering, resulting in the reclassification of its common stock to Class B common stock. This event led to the company entering into supplemental indentures for its convertible senior notes, adjusting conversion rates and prices, and marking the offering as a Qualified Initial Public Offering.