NETSCOUT SYSTEMS INC (NTCT) Stock Fundamental Analysis
NASDAQ:NTCT - Nasdaq - US64115T1043 - Common Stock - Currency: USD
Overall NTCT gets a fundamental rating of 5 out of 10. We evaluated NTCT against 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. This makes NTCT very considerable for value investing!
1. Profitability
1.1 Basic Checks
NTCT had positive earnings in the past year.
NTCT had a positive operating cash flow in the past year.
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
NTCT's Return On Assets of -16.78% is on the low side compared to the rest of the industry. NTCT is outperformed by 72.92% of its industry peers.
NTCT has a Return On Equity of -23.51%. This is in the lower half of the industry: NTCT underperforms 64.58% of its industry peers.
With a decent Return On Invested Capital value of 3.55%, NTCT is doing good in the industry, outperforming 64.58% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for NTCT is significantly below the industry average of 14.30%.
The last Return On Invested Capital (3.55%) for NTCT is above the 3 year average (2.83%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -16.78% | ||
| ROE | -23.51% | ||
| ROIC | 3.55% |
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
With a decent Operating Margin value of 9.71%, NTCT is doing good in the industry, outperforming 75.00% 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 78.27%, NTCT belongs to the best of the industry, outperforming 97.92% of the companies in the same industry.
In the last couple of years the Gross Margin of NTCT has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.71% | ||
| PM (TTM) | N/A | ||
| GM | 78.27% |
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
NTCT has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for NTCT has been increased compared to 1 year ago.
NTCT has about the same amout of shares outstanding than it did 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
NTCT has an Altman-Z score of 2.20. This is not the best score and indicates that NTCT is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of NTCT (2.20) is better than 64.58% of its industry peers.
NTCT has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 2.2 |
ROIC/WACC0.35
WACC10.12%
2.3 Liquidity
NTCT has a Current Ratio of 1.75. This is a normal value and indicates that NTCT is financially healthy and should not expect problems in meeting its short term obligations.
NTCT has a Current ratio (1.75) which is in line with its industry peers.
A Quick Ratio of 1.72 indicates that NTCT should not have too much problems paying its short term obligations.
NTCT has a Quick ratio of 1.72. This is in the better half of the industry: NTCT outperforms 70.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.75 | ||
| Quick Ratio | 1.72 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 0.45% over the past year.
Measured over the past 5 years, NTCT shows a small growth in Earnings Per Share. The EPS has been growing by 6.94% on average per year.
Looking at the last year, NTCT shows a decrease in Revenue. The Revenue has decreased by -0.81% in the last year.
The Revenue has been decreasing by -1.60% on average over the past years.
EPS 1Y (TTM)0.45%
EPS 3Y6.11%
EPS 5Y6.94%
EPS Q2Q%-5.45%
Revenue 1Y (TTM)-0.81%
Revenue growth 3Y-1.3%
Revenue growth 5Y-1.6%
Sales Q2Q%0.76%
3.2 Future
The Earnings Per Share is expected to grow by 4.95% on average over the next years.
Based on estimates for the next years, NTCT will show a small growth in Revenue. The Revenue will grow by 4.36% on average per year.
EPS Next Y5.08%
EPS Next 2Y4.95%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year2.82%
Revenue Next 2Y2.61%
Revenue Next 3Y4.36%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
A Price/Earnings ratio of 10.43 indicates a reasonable valuation of NTCT.
NTCT's Price/Earnings ratio is rather cheap when compared to the industry. NTCT is cheaper than 93.75% of the companies in the same industry.
NTCT is valuated cheaply when we compare the Price/Earnings ratio to 27.50, which is the current average of the S&P500 Index.
NTCT is valuated reasonably with a Price/Forward Earnings ratio of 9.92.
NTCT's Price/Forward Earnings ratio is rather cheap when compared to the industry. NTCT is cheaper than 93.75% of the companies in the same industry.
NTCT is valuated cheaply when we compare the Price/Forward Earnings ratio to 36.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.43 | ||
| Fwd PE | 9.92 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NTCT indicates a rather cheap valuation: NTCT is cheaper than 85.42% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NTCT indicates a rather cheap valuation: NTCT is cheaper than 89.58% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.79 | ||
| EV/EBITDA | 7.71 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PEG (NY)2.05
PEG (5Y)1.5
EPS Next 2Y4.95%
EPS Next 3YN/A
5. Dividend
5.1 Amount
No dividends for NTCT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
23.04
+0.14 (+0.61%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners94.07%
Inst Owner Change0%
Ins Owners3.66%
Ins Owner Change0.64%
Market Cap1.64B
Analysts47.5
Price Target29.73 (29.04%)
Short Float %2.25%
Short Ratio2.99
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)14.43%
Min EPS beat(2)-0.04%
Max EPS beat(2)28.89%
EPS beat(4)3
Avg EPS beat(4)40%
Min EPS beat(4)-0.04%
Max EPS beat(4)128.76%
EPS beat(8)7
Avg EPS beat(8)33.09%
EPS beat(12)11
Avg EPS beat(12)30.38%
EPS beat(16)14
Avg EPS beat(16)28.72%
Revenue beat(2)2
Avg Revenue beat(2)7%
Min Revenue beat(2)2.42%
Max Revenue beat(2)11.59%
Revenue beat(4)3
Avg Revenue beat(4)3.76%
Min Revenue beat(4)-0.56%
Max Revenue beat(4)11.59%
Revenue beat(8)4
Avg Revenue beat(8)0.18%
Revenue beat(12)7
Avg Revenue beat(12)1.03%
Revenue beat(16)10
Avg Revenue beat(16)1.42%
PT rev (1m)0%
PT rev (3m)-2.24%
EPS NQ rev (1m)-10.61%
EPS NQ rev (3m)-6.35%
EPS NY rev (1m)0.44%
EPS NY rev (3m)0.29%
Revenue NQ rev (1m)-3.31%
Revenue NQ rev (3m)-3.67%
Revenue NY rev (1m)0.58%
Revenue NY rev (3m)0.77%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.43 | ||
| Fwd PE | 9.92 | ||
| P/S | 2 | ||
| P/FCF | 7.79 | ||
| P/OCF | 7.55 | ||
| P/B | 1.05 | ||
| P/tB | 7.29 | ||
| EV/EBITDA | 7.71 |
EPS(TTM)2.21
EY9.59%
EPS(NY)2.32
Fwd EY10.08%
FCF(TTM)2.96
FCFY12.84%
OCF(TTM)3.05
OCFY13.24%
SpS11.53
BVpS21.88
TBVpS3.16
PEG (NY)2.05
PEG (5Y)1.5
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -16.78% | ||
| ROE | -23.51% | ||
| ROCE | 4.49% | ||
| ROIC | 3.55% | ||
| ROICexc | 4.9% | ||
| ROICexgc | N/A | ||
| OM | 9.71% | ||
| PM (TTM) | N/A | ||
| GM | 78.27% | ||
| FCFM | 25.64% |
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-Score7
Asset Turnover0.38
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 10.5% | ||
| Cap/Sales | 0.81% | ||
| Interest Coverage | 19.06 | ||
| Cash Conversion | 151.53% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.75 | ||
| Quick Ratio | 1.72 | ||
| Altman-Z | 2.2 |
F-Score7
WACC10.12%
ROIC/WACC0.35
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)0.45%
EPS 3Y6.11%
EPS 5Y6.94%
EPS Q2Q%-5.45%
EPS Next Y5.08%
EPS Next 2Y4.95%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-0.81%
Revenue growth 3Y-1.3%
Revenue growth 5Y-1.6%
Sales Q2Q%0.76%
Revenue Next Year2.82%
Revenue Next 2Y2.61%
Revenue Next 3Y4.36%
Revenue Next 5YN/A
EBIT growth 1Y25.5%
EBIT growth 3Y18.01%
EBIT growth 5Y31.51%
EBIT Next Year1.11%
EBIT Next 3Y4.26%
EBIT Next 5YN/A
FCF growth 1Y302.05%
FCF growth 3Y-9.6%
FCF growth 5Y0.57%
OCF growth 1Y270.12%
OCF growth 3Y-9.74%
OCF growth 5Y-0.66%