NETSCOUT SYSTEMS INC (NTCT) Stock Fundamental Analysis
NASDAQ:NTCT - US64115T1043 - Common Stock
23.89 USD
+0.75 (+3.24%)
23.89 USD
0 (0%)
Taking everything into account, NTCT scores 5 out of 10 in our fundamental rating. NTCT was compared to 48 industry peers in the Communications Equipment industry. Both the profitability and the financial health of NTCT get a neutral evaluation. Nothing too spectacular is happening here. 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
In the past year NTCT was profitable.
In the past year NTCT had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: NTCT reported negative net income in multiple years.
NTCT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NTCT has a worse Return On Assets (-16.78%) than 75.00% of its industry peers.
NTCT has a Return On Equity of -23.51%. This is in the lower half of the industry: NTCT underperforms 68.75% of its industry peers.
The Return On Invested Capital of NTCT (3.55%) is better than 66.67% of its industry peers.
NTCT had an Average Return On Invested Capital over the past 3 years of 2.83%. This is significantly below the industry average of 13.48%.
The 3 year average ROIC (2.83%) for NTCT is below the current ROIC(3.55%), indicating increased profibility in the last year.
| 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
Looking at the Operating Margin, with a value of 9.71%, 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.
NTCT's Gross Margin of 78.27% is amongst the best of the industry. NTCT outperforms 97.92% of its industry peers.
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so 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.
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.
2.2 Solvency
NTCT has an Altman-Z score of 2.28. 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.
Looking at the Altman-Z score, with a value of 2.28, NTCT is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
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 | 2.28 |
ROIC/WACC0.35
WACC10.23%
2.3 Liquidity
A Current Ratio of 1.75 indicates that NTCT should not have too much problems paying its short term obligations.
NTCT has a Current ratio (1.75) which is comparable to the rest of the industry.
NTCT has a Quick Ratio of 1.72. This is a normal value and indicates that NTCT is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of NTCT (1.72) is better than 68.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.75 | ||
| Quick Ratio | 1.72 |
3. Growth
3.1 Past
NTCT shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.61%.
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 -0.82% in the last year.
The Revenue has been decreasing by -1.60% on average over the past years.
EPS 1Y (TTM)4.61%
EPS 3Y6.11%
EPS 5Y6.94%
EPS Q2Q%21.43%
Revenue 1Y (TTM)-0.82%
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 4.95% on average per year.
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 Year3.07%
Revenue Next 2Y2.75%
Revenue Next 3Y4.36%
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 decreasing.
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 10.52 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 27.08, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 9.81, which indicates a very decent valuation of NTCT.
Based on the Price/Forward Earnings ratio, NTCT is valued cheaply inside the industry as 95.83% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of NTCT to the average of the S&P500 Index (22.67), we can say NTCT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.52 | ||
| Fwd PE | 9.81 |
4.2 Price Multiples
85.42% of the companies in the same industry are more expensive than NTCT, based on the Enterprise Value to EBITDA ratio.
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 | 8.14 | ||
| EV/EBITDA | 8.3 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates NTCT does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)2.07
PEG (5Y)1.52
EPS Next 2Y4.95%
EPS Next 3YN/A
5. Dividend
5.1 Amount
NTCT does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
23.89
+0.75 (+3.24%)
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 Change1.84%
Market Cap1.72B
Analysts47.5
Price Target29.73 (24.45%)
Short Float %3.44%
Short Ratio3.71
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)0%
EPS NQ rev (3m)-6.35%
EPS NY rev (1m)0%
EPS NY rev (3m)0.44%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.31%
Revenue NY rev (1m)0.24%
Revenue NY rev (3m)0.83%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.52 | ||
| Fwd PE | 9.81 | ||
| P/S | 2.09 | ||
| P/FCF | 8.14 | ||
| P/OCF | 7.89 | ||
| P/B | 1.1 | ||
| P/tB | 7.62 | ||
| EV/EBITDA | 8.3 |
EPS(TTM)2.27
EY9.5%
EPS(NY)2.43
Fwd EY10.19%
FCF(TTM)2.94
FCFY12.29%
OCF(TTM)3.03
OCFY12.68%
SpS11.45
BVpS21.71
TBVpS3.13
PEG (NY)2.07
PEG (5Y)1.52
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 | 2.28 |
F-Score7
WACC10.23%
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)4.61%
EPS 3Y6.11%
EPS 5Y6.94%
EPS Q2Q%21.43%
EPS Next Y5.08%
EPS Next 2Y4.95%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-0.82%
Revenue growth 3Y-1.3%
Revenue growth 5Y-1.6%
Sales Q2Q%6.98%
Revenue Next Year3.07%
Revenue Next 2Y2.75%
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%