NETSCOUT SYSTEMS INC (NTCT) Stock Fundamental Analysis
NASDAQ:NTCT - Nasdaq - US64115T1043 - Common Stock - Currency: USD
Taking everything into account, NTCT scores 4 out of 10 in our fundamental rating. NTCT was compared to 51 industry peers in the Communications Equipment industry. NTCT has only an average score on both its financial health and profitability. NTCT has a bad growth rate and is valued cheaply.
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.
NTCT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NTCT's Return On Assets of -28.94% is on the low side compared to the rest of the industry. NTCT is outperformed by 80.00% of its industry peers.
NTCT's Return On Equity of -41.07% is on the low side compared to the rest of the industry. NTCT is outperformed by 68.00% of its industry peers.
NTCT has a Return On Invested Capital (2.15%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for NTCT is significantly below the industry average of 10.90%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -28.94% | ||
| ROE | -41.07% | ||
| ROIC | 2.15% |
ROA(3y)-0.82%
ROA(5y)-0.38%
ROE(3y)-1.04%
ROE(5y)-0.46%
ROIC(3y)2.33%
ROIC(5y)1.77%
1.3 Margins
NTCT's Operating Margin of 5.41% is fine compared to the rest of the industry. NTCT outperforms 66.00% of its industry peers.
NTCT's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 77.08%, NTCT belongs to the best of the industry, outperforming 98.00% 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 | 5.41% | ||
| PM (TTM) | N/A | ||
| GM | 77.08% |
OM growth 3Y19.68%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y1.84%
GM growth 5Y1.44%
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.
Compared to 1 year ago, NTCT has more shares outstanding
NTCT has less shares outstanding than it did 5 years ago.
NTCT has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.09 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 2.09, NTCT is doing good in the industry, outperforming 66.00% of the companies in the same industry.
NTCT has a debt to FCF ratio of 0.55. This is a very positive value and a sign of high solvency as it would only need 0.55 years to pay back of all of its debts.
NTCT's Debt to FCF ratio of 0.55 is fine compared to the rest of the industry. NTCT outperforms 76.00% of its industry peers.
A Debt/Equity ratio of 0.05 indicates that NTCT is not too dependend on debt financing.
NTCT has a Debt to Equity ratio of 0.05. This is in the better half of the industry: NTCT outperforms 64.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.05 | ||
| Debt/FCF | 0.55 | ||
| Altman-Z | 2.09 |
ROIC/WACC0.23
WACC9.31%
2.3 Liquidity
A Current Ratio of 1.68 indicates that NTCT should not have too much problems paying its short term obligations.
NTCT's Current ratio of 1.68 is in line compared to the rest of the industry. NTCT outperforms 44.00% of its industry peers.
NTCT has a Quick Ratio of 1.63. This is a normal value and indicates that NTCT is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.63, NTCT perfoms like the industry average, outperforming 60.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.68 | ||
| Quick Ratio | 1.63 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 10.34% over the past year.
NTCT shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.62% yearly.
NTCT shows a decrease in Revenue. In the last year, the revenue decreased by -1.55%.
The Revenue has been decreasing by -1.83% on average over the past years.
EPS 1Y (TTM)10.34%
EPS 3Y8.97%
EPS 5Y9.62%
EPS Q2Q%28.77%
Revenue 1Y (TTM)-1.55%
Revenue growth 3Y-0.07%
Revenue growth 5Y-1.83%
Sales Q2Q%15.57%
3.2 Future
NTCT is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 0.97% yearly.
The Revenue is expected to grow by 2.44% on average over the next years.
EPS Next Y2%
EPS Next 2Y2.02%
EPS Next 3Y0.97%
EPS Next 5YN/A
Revenue Next Year-3.21%
Revenue Next 2Y-0.61%
Revenue Next 3Y0.63%
Revenue Next 5Y2.44%
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
With a Price/Earnings ratio of 9.77, the valuation of NTCT can be described as very reasonable.
NTCT's Price/Earnings ratio is rather cheap when compared to the industry. NTCT is cheaper than 94.00% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.98, NTCT is valued rather cheaply.
A Price/Forward Earnings ratio of 9.56 indicates a reasonable valuation of NTCT.
NTCT's Price/Forward Earnings ratio is rather cheap when compared to the industry. NTCT is cheaper than 94.00% of the companies in the same industry.
NTCT's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.66.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.77 | ||
| Fwd PE | 9.56 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NTCT is valued cheaper than 84.00% 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 86.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.55 | ||
| EV/EBITDA | 10.86 |
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)4.89
PEG (5Y)1.02
EPS Next 2Y2.02%
EPS Next 3Y0.97%
5. Dividend
5.1 Amount
No dividends for NTCT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:NTCT (3/3/2025, 1:19:46 PM)
21.89
-0.6 (-2.67%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners92.22%
Inst Owner Change-1.36%
Ins Owners3.7%
Ins Owner Change2.85%
Market Cap1.57B
Analysts47.5
Price Target30.41 (38.92%)
Short Float %2.12%
Short Ratio3.51
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)2
Avg EPS beat(2)65.58%
Min EPS beat(2)2.4%
Max EPS beat(2)128.76%
EPS beat(4)4
Avg EPS beat(4)56.39%
Min EPS beat(4)2.4%
Max EPS beat(4)128.76%
EPS beat(8)8
Avg EPS beat(8)39.33%
EPS beat(12)12
Avg EPS beat(12)34.31%
EPS beat(16)15
Avg EPS beat(16)29.02%
Revenue beat(2)1
Avg Revenue beat(2)0.51%
Min Revenue beat(2)-0.56%
Max Revenue beat(2)1.59%
Revenue beat(4)2
Avg Revenue beat(4)0.4%
Min Revenue beat(4)-7.2%
Max Revenue beat(4)7.77%
Revenue beat(8)4
Avg Revenue beat(8)-0.24%
Revenue beat(12)6
Avg Revenue beat(12)0.66%
Revenue beat(16)8
Avg Revenue beat(16)0.36%
PT rev (1m)7.19%
PT rev (3m)9.69%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)1.07%
EPS NY rev (3m)1.23%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.33%
Revenue NY rev (3m)0.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.77 | ||
| Fwd PE | 9.56 | ||
| P/S | 2 | ||
| P/FCF | 11.55 | ||
| P/OCF | 11.04 | ||
| P/B | 1.08 | ||
| P/tB | 15.64 | ||
| EV/EBITDA | 10.86 |
EPS(TTM)2.24
EY10.23%
EPS(NY)2.29
Fwd EY10.46%
FCF(TTM)1.89
FCFY8.65%
OCF(TTM)1.98
OCFY9.05%
SpS10.97
BVpS20.34
TBVpS1.4
PEG (NY)4.89
PEG (5Y)1.02
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -28.94% | ||
| ROE | -41.07% | ||
| ROCE | 2.47% | ||
| ROIC | 2.15% | ||
| ROICexc | 2.89% | ||
| ROICexgc | N/A | ||
| OM | 5.41% | ||
| PM (TTM) | N/A | ||
| GM | 77.08% | ||
| FCFM | 17.27% |
ROA(3y)-0.82%
ROA(5y)-0.38%
ROE(3y)-1.04%
ROE(5y)-0.46%
ROIC(3y)2.33%
ROIC(5y)1.77%
ROICexc(3y)2.95%
ROICexc(5y)2.21%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)2.68%
ROCE(5y)2.04%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y29.17%
ROICexc growth 5YN/A
OM growth 3Y19.68%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y1.84%
GM growth 5Y1.44%
F-Score6
Asset Turnover0.38
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.05 | ||
| Debt/FCF | 0.55 | ||
| Debt/EBITDA | 0.67 | ||
| Cap/Depr | 9.09% | ||
| Cap/Sales | 0.8% | ||
| Interest Coverage | 7.19 | ||
| Cash Conversion | 127.35% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.68 | ||
| Quick Ratio | 1.63 | ||
| Altman-Z | 2.09 |
F-Score6
WACC9.31%
ROIC/WACC0.23
Cap/Depr(3y)10.55%
Cap/Depr(5y)12.88%
Cap/Sales(3y)1.05%
Cap/Sales(5y)1.47%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)10.34%
EPS 3Y8.97%
EPS 5Y9.62%
EPS Q2Q%28.77%
EPS Next Y2%
EPS Next 2Y2.02%
EPS Next 3Y0.97%
EPS Next 5YN/A
Revenue 1Y (TTM)-1.55%
Revenue growth 3Y-0.07%
Revenue growth 5Y-1.83%
Sales Q2Q%15.57%
Revenue Next Year-3.21%
Revenue Next 2Y-0.61%
Revenue Next 3Y0.63%
Revenue Next 5Y2.44%
EBIT growth 1Y-48.89%
EBIT growth 3Y19.59%
EBIT growth 5YN/A
EBIT Next Year-4.05%
EBIT Next 3Y2.92%
EBIT Next 5Y3.28%
FCF growth 1Y-42.11%
FCF growth 3Y-35.7%
FCF growth 5Y-16.11%
OCF growth 1Y-42.26%
OCF growth 3Y-34.97%
OCF growth 5Y-17.06%