27.865 USD
+0.58 (+2.14%)
We assign a fundamental rating of 6 out of 10 to NTCT. NTCT was compared to 48 industry peers in the Communications Equipment industry. NTCT scores excellent on profitability, but there are some minor concerns on its financial health. NTCT scores decently on growth, while it is valued quite cheap. This could make an interesting combination. These ratings would make NTCT suitable 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.
- In the past 5 years NTCT always reported a positive cash flow from operatings.
1.2 Ratios
- With a decent Return On Assets value of 4.12%, NTCT is doing good in the industry, outperforming 72.92% of the companies in the same industry.
- The Return On Equity of NTCT (5.69%) is better than 68.75% of its industry peers.
- NTCT's Return On Invested Capital of 4.83% is fine compared to the rest of the industry. NTCT outperforms 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 12.15%.
- The last Return On Invested Capital (4.83%) for NTCT is above the 3 year average (2.83%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.12% | ||
| ROE | 5.69% | ||
| ROIC | 4.83% |
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 Profit Margin, with a value of 10.38%, NTCT belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
- NTCT's Operating Margin of 12.74% is fine compared to the rest of the industry. NTCT outperforms 77.08% of its industry peers.
- In the last couple of years the Operating Margin of NTCT has grown nicely.
- Looking at the Gross Margin, with a value of 79.21%, NTCT belongs to the top of the industry, outperforming 95.83% 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 | 12.74% | ||
| PM (TTM) | 10.38% | ||
| GM | 79.21% |
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.
- 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.
- 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 2.69 indicates that NTCT is not a great score, but indicates only limited risk for bankruptcy at the moment.
- With a decent Altman-Z score value of 2.69, NTCT is doing good in the industry, outperforming 62.50% 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 | 2.69 |
ROIC/WACC0.49
WACC9.93%
2.3 Liquidity
- NTCT has a Current Ratio of 1.88. 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 (1.88) is comparable to the rest of the industry.
- NTCT has a Quick Ratio of 1.84. 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 (1.84) is better than 68.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.88 | ||
| Quick Ratio | 1.84 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 19.21% 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.
- The Revenue has grown by 9.60% in the past year. This is quite good.
- The Revenue has been decreasing by -1.60% on average over the past years.
EPS 1Y (TTM)19.21%
EPS 3Y6.11%
EPS 5Y6.94%
EPS Q2Q%31.91%
Revenue 1Y (TTM)9.6%
Revenue growth 3Y-1.3%
Revenue growth 5Y-1.6%
Sales Q2Q%14.6%
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 6.63% on average per year.
- Based on estimates for the next years, NTCT will show a small growth in Revenue. The Revenue will grow by 3.53% on average per year.
EPS Next Y10.92%
EPS Next 2Y7.99%
EPS Next 3Y6.63%
EPS Next 5YN/A
Revenue Next Year4.81%
Revenue Next 2Y3.71%
Revenue Next 3Y3.53%
Revenue Next 5YN/A
3.3 Evolution
- The EPS growth rate is stable: in the next years the growth will be about the same 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
- The Price/Earnings ratio is 11.51, which indicates a very decent valuation of NTCT.
- Based on the Price/Earnings ratio, NTCT is valued cheaply inside the industry as 91.67% of the companies are valued more expensively.
- The average S&P500 Price/Earnings ratio is at 27.21. NTCT is valued rather cheaply when compared to this.
- The Price/Forward Earnings ratio is 10.81, which indicates a very decent valuation of NTCT.
- 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 (25.98), we can say NTCT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.51 | ||
| Fwd PE | 10.81 |
4.2 Price Multiples
- NTCT's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. NTCT is cheaper than 83.33% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, NTCT is valued cheaply inside the industry as 95.83% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.86 | ||
| EV/EBITDA | 8.35 |
4.3 Compensation for Growth
- NTCT's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- NTCT has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.05
PEG (5Y)1.66
EPS Next 2Y7.99%
EPS Next 3Y6.63%
5. Dividend
5.1 Amount
- NTCT does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
NETSCOUT SYSTEMS INC / NTCT FAQ
What is the fundamental rating for NTCT stock?
ChartMill assigns a fundamental rating of 6 / 10 to NTCT.
Can you provide the valuation status for NETSCOUT SYSTEMS INC?
ChartMill assigns a valuation rating of 8 / 10 to NETSCOUT SYSTEMS INC (NTCT). This can be considered as Undervalued.
Can you provide the profitability details for NETSCOUT SYSTEMS INC?
NETSCOUT SYSTEMS INC (NTCT) has a profitability rating of 7 / 10.
How financially healthy is NETSCOUT SYSTEMS INC?
The financial health rating of NETSCOUT SYSTEMS INC (NTCT) is 6 / 10.