NETSCOUT SYSTEMS INC (NTCT) Stock Fundamental Analysis
USA - NASDAQ:NTCT - US64115T1043 - Common Stock
25.89 USD
-0.08 (-0.31%)
We assign a fundamental rating of 5 out of 10 to NTCT. NTCT was compared to 48 industry peers in the Communications Equipment industry. NTCT has an average financial health and profitability rating. NTCT is cheap, but on the other hand it scores bad on growth. These ratings could make NTCT a good candidate for value investing.
1. Profitability
1.1 Basic Checks
NTCT had positive earnings in the past year.
In the past year NTCT had a positive cash flow from operations.
In multiple years NTCT reported negative net income over the last 5 years.
Each year in the past 5 years NTCT had a positive operating cash flow.
1.2 Ratios
The Return On Assets of NTCT (3.37%) is better than 64.58% of its industry peers.
NTCT has a Return On Equity of 4.70%. This is in the better half of the industry: NTCT outperforms 64.58% of its industry peers.
NTCT has a Return On Invested Capital of 4.18%. This is in the better half of the industry: NTCT outperforms 68.75% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NTCT is significantly below the industry average of 13.71%.
The 3 year average ROIC (2.83%) for NTCT is below the current ROIC(4.18%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.37% | ||
| ROE | 4.7% | ||
| ROIC | 4.18% |
ROA(3y)-6.79%
ROA(5y)-3.72%
ROE(3y)-9.46%
ROE(5y)-5.14%
ROIC(3y)2.83%
ROIC(5y)2.2%
1.3 Margins
The Profit Margin of NTCT (8.72%) is better than 77.08% of its industry peers.
Looking at the Operating Margin, with a value of 11.21%, NTCT is in the better half of the industry, outperforming 77.08% of the companies in the same industry.
NTCT's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 78.70%, NTCT belongs to the best of the industry, outperforming 97.92% of the companies in the same industry.
NTCT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.21% | ||
| PM (TTM) | 8.72% | ||
| GM | 78.7% |
OM growth 3Y19.56%
OM growth 5Y33.65%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y1.45%
GM growth 5Y1.45%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), NTCT is destroying value.
NTCT has more shares outstanding than it did 1 year ago.
The number of shares outstanding for NTCT remains at a similar level compared to 5 years ago.
NTCT has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
An Altman-Z score of 2.50 indicates that NTCT is not a great score, but indicates only limited risk for bankruptcy at the moment.
NTCT has a better Altman-Z score (2.50) than 64.58% of its industry peers.
There is no outstanding debt for NTCT. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 2.5 |
ROIC/WACC0.43
WACC9.79%
2.3 Liquidity
NTCT has a Current Ratio of 1.77. This is a normal value and indicates that NTCT is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of NTCT (1.77) is comparable to the rest of the industry.
NTCT has a Quick Ratio of 1.73. This is a normal value and indicates that NTCT is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.73, NTCT is in the better half of the industry, outperforming 64.58% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.77 | ||
| Quick Ratio | 1.73 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.61% over the past year.
The Earnings Per Share has been growing slightly by 6.94% on average over the past years.
NTCT shows a small growth in Revenue. In the last year, the Revenue has grown by 5.29%.
NTCT shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.60% yearly.
EPS 1Y (TTM)4.61%
EPS 3Y6.11%
EPS 5Y6.94%
EPS Q2Q%21.43%
Revenue 1Y (TTM)5.29%
Revenue growth 3Y-1.3%
Revenue growth 5Y-1.6%
Sales Q2Q%6.98%
3.2 Future
Based on estimates for the next years, NTCT will show a small growth in Earnings Per Share. The EPS will grow by 5.86% on average per year.
The Revenue is expected to grow by 4.22% on average over the next years.
EPS Next Y5.08%
EPS Next 2Y4.95%
EPS Next 3Y5.86%
EPS Next 5YN/A
Revenue Next Year3.53%
Revenue Next 2Y3.16%
Revenue Next 3Y4.22%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 11.41, the valuation of NTCT can be described as reasonable.
Based on the Price/Earnings ratio, NTCT is valued cheaply inside the industry as 89.58% of the companies are valued more expensively.
NTCT's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.41.
Based on the Price/Forward Earnings ratio of 10.64, the valuation of NTCT can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of NTCT indicates a rather cheap valuation: NTCT is cheaper than 95.83% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of NTCT to the average of the S&P500 Index (22.87), we can say NTCT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.41 | ||
| Fwd PE | 10.64 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NTCT is valued cheaper than 87.50% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, NTCT is valued cheaper than 93.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.58 | ||
| EV/EBITDA | 8.17 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of NTCT may justify a higher PE ratio.
PEG (NY)2.25
PEG (5Y)1.64
EPS Next 2Y4.95%
EPS Next 3Y5.86%
5. Dividend
5.1 Amount
NTCT does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:NTCT (9/23/2025, 1:54:53 PM)
25.89
-0.08 (-0.31%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners93.69%
Inst Owner Change-0.74%
Ins Owners3.64%
Ins Owner Change5.25%
Market Cap1.86B
Analysts76
Price Target30.71 (18.62%)
Short Float %3.57%
Short Ratio3.75
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)6.48%
Min EPS beat(2)-0.04%
Max EPS beat(2)12.99%
EPS beat(4)3
Avg EPS beat(4)11.06%
Min EPS beat(4)-0.04%
Max EPS beat(4)28.89%
EPS beat(8)7
Avg EPS beat(8)34.69%
EPS beat(12)11
Avg EPS beat(12)30.88%
EPS beat(16)15
Avg EPS beat(16)29.73%
Revenue beat(2)2
Avg Revenue beat(2)1.76%
Min Revenue beat(2)1.1%
Max Revenue beat(2)2.42%
Revenue beat(4)3
Avg Revenue beat(4)3.64%
Min Revenue beat(4)-0.56%
Max Revenue beat(4)11.59%
Revenue beat(8)5
Avg Revenue beat(8)0.38%
Revenue beat(12)8
Avg Revenue beat(12)1.12%
Revenue beat(16)10
Avg Revenue beat(16)1.48%
PT rev (1m)3.3%
PT rev (3m)3.3%
EPS NQ rev (1m)-8.59%
EPS NQ rev (3m)-13.92%
EPS NY rev (1m)0%
EPS NY rev (3m)0.15%
Revenue NQ rev (1m)0.72%
Revenue NQ rev (3m)0.79%
Revenue NY rev (1m)0.44%
Revenue NY rev (3m)1.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.41 | ||
| Fwd PE | 10.64 | ||
| P/S | 2.23 | ||
| P/FCF | 7.58 | ||
| P/OCF | 7.36 | ||
| P/B | 1.2 | ||
| P/tB | 8.18 | ||
| EV/EBITDA | 8.17 |
EPS(TTM)2.27
EY8.77%
EPS(NY)2.43
Fwd EY9.4%
FCF(TTM)3.42
FCFY13.19%
OCF(TTM)3.52
OCFY13.58%
SpS11.61
BVpS21.53
TBVpS3.16
PEG (NY)2.25
PEG (5Y)1.64
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.37% | ||
| ROE | 4.7% | ||
| ROCE | 5.29% | ||
| ROIC | 4.18% | ||
| ROICexc | 5.97% | ||
| ROICexgc | N/A | ||
| OM | 11.21% | ||
| PM (TTM) | 8.72% | ||
| GM | 78.7% | ||
| FCFM | 29.4% |
ROA(3y)-6.79%
ROA(5y)-3.72%
ROE(3y)-9.46%
ROE(5y)-5.14%
ROIC(3y)2.83%
ROIC(5y)2.2%
ROICexc(3y)3.67%
ROICexc(5y)2.85%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)3.58%
ROCE(5y)2.78%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y37.03%
ROICexc growth 5Y48.15%
OM growth 3Y19.56%
OM growth 5Y33.65%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y1.45%
GM growth 5Y1.45%
F-Score9
Asset Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 11.36% | ||
| Cap/Sales | 0.88% | ||
| Interest Coverage | 34.01 | ||
| Cash Conversion | 160.04% | ||
| Profit Quality | 337.32% | ||
| Current Ratio | 1.77 | ||
| Quick Ratio | 1.73 | ||
| Altman-Z | 2.5 |
F-Score9
WACC9.79%
ROIC/WACC0.43
Cap/Depr(3y)10.43%
Cap/Depr(5y)11.55%
Cap/Sales(3y)0.91%
Cap/Sales(5y)1.19%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)4.61%
EPS 3Y6.11%
EPS 5Y6.94%
EPS Q2Q%21.43%
EPS Next Y5.08%
EPS Next 2Y4.95%
EPS Next 3Y5.86%
EPS Next 5YN/A
Revenue 1Y (TTM)5.29%
Revenue growth 3Y-1.3%
Revenue growth 5Y-1.6%
Sales Q2Q%6.98%
Revenue Next Year3.53%
Revenue Next 2Y3.16%
Revenue Next 3Y4.22%
Revenue Next 5YN/A
EBIT growth 1Y92.87%
EBIT growth 3Y18.01%
EBIT growth 5Y31.51%
EBIT Next Year1.11%
EBIT Next 3Y6.03%
EBIT Next 5YN/A
FCF growth 1Y79.71%
FCF growth 3Y-9.6%
FCF growth 5Y0.57%
OCF growth 1Y72.2%
OCF growth 3Y-9.74%
OCF growth 5Y-0.66%