NETSCOUT SYSTEMS INC (NTCT) Stock Fundamental Analysis
NASDAQ:NTCT - Nasdaq - US64115T1043 - Common Stock - Currency: USD
NTCT gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 49 industry peers in the Communications Equipment industry. NTCT has only an average score on both its financial health and profitability. NTCT is valued quite cheap, but it does not seem to be growing. 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.
NTCT had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: NTCT reported negative net income in multiple years.
In the past 5 years NTCT always reported a positive cash flow from operatings.
1.2 Ratios
NTCT has a worse Return On Assets (-16.78%) than 73.47% of its industry peers.
With a Return On Equity value of -23.51%, NTCT is not doing good in the industry: 65.31% of the companies in the same industry are doing better.
With a decent Return On Invested Capital value of 3.55%, NTCT is doing good in the industry, outperforming 63.27% of the companies in the same industry.
NTCT had an Average Return On Invested Capital over the past 3 years of 2.83%. This is significantly below the industry average of 13.69%.
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
NTCT has a Operating Margin of 9.71%. This is in the better half of the industry: NTCT outperforms 75.51% of its industry peers.
In the last couple of years the Operating Margin of NTCT has grown nicely.
NTCT's Gross Margin of 78.27% is amongst the best of the industry. NTCT outperforms 97.96% of its industry peers.
NTCT's Gross Margin has been stable in the last couple of years.
| 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.
NTCT has about the same amout of shares outstanding than it did 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
An Altman-Z score of 2.20 indicates that NTCT is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of NTCT (2.20) is better than 67.35% 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/WACC0.37
WACC9.64%
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's Quick ratio of 1.72 is fine compared to the rest of the industry. NTCT outperforms 71.43% 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.
The Earnings Per Share has been growing slightly by 6.94% on average over the past years.
The Revenue has decreased by -0.81% in the past 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
NTCT is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.44% yearly.
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 Y4.62%
EPS Next 2Y4.44%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year2.23%
Revenue Next 2Y2.58%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 10.33, the valuation of NTCT can be described as very reasonable.
87.76% of the companies in the same industry are more expensive than NTCT, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of NTCT to the average of the S&P500 Index (26.29), we can say NTCT is valued rather cheaply.
NTCT is valuated reasonably with a Price/Forward Earnings ratio of 9.87.
Based on the Price/Forward Earnings ratio, NTCT is valued cheaply inside the industry as 83.67% of the companies are valued more expensively.
NTCT's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.17.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.33 | ||
| Fwd PE | 9.87 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NTCT is valued cheaper than 89.80% of the companies in the same industry.
NTCT's Price/Free Cash Flow ratio is rather cheap when compared to the industry. NTCT is cheaper than 89.80% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.72 | ||
| EV/EBITDA | 7.68 |
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)2.24
PEG (5Y)1.49
EPS Next 2Y4.44%
EPS Next 3YN/A
5. Dividend
5.1 Amount
NTCT does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
22.83
-0.01 (-0.04%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners92.22%
Inst Owner Change3.26%
Ins Owners3.7%
Ins Owner Change-2.69%
Market Cap1.63B
Analysts47.5
Price Target30.41 (33.2%)
Short Float %2.52%
Short Ratio3.59
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)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.56%
EPS NY rev (1m)0%
EPS NY rev (3m)0.97%
Revenue NQ rev (1m)-0.37%
Revenue NQ rev (3m)-0.37%
Revenue NY rev (1m)0.19%
Revenue NY rev (3m)0.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.33 | ||
| Fwd PE | 9.87 | ||
| P/S | 1.98 | ||
| P/FCF | 7.72 | ||
| P/OCF | 7.48 | ||
| P/B | 1.04 | ||
| P/tB | 7.23 | ||
| EV/EBITDA | 7.68 |
EPS(TTM)2.21
EY9.68%
EPS(NY)2.31
Fwd EY10.13%
FCF(TTM)2.96
FCFY12.96%
OCF(TTM)3.05
OCFY13.37%
SpS11.53
BVpS21.88
TBVpS3.16
PEG (NY)2.24
PEG (5Y)1.49
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
WACC9.64%
ROIC/WACC0.37
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 Y4.62%
EPS Next 2Y4.44%
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 Year2.23%
Revenue Next 2Y2.58%
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%