Overall NTCT gets a fundamental rating of 6 out of 10. We evaluated NTCT against 48 industry peers in the Communications Equipment industry. NTCT has an excellent profitability rating, 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 could make NTCT a good candidate for value investing.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

NTCT had positive earnings in the past year.
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.
Each year in the past 5 years NTCT had a positive operating cash flow.

1.2 Ratios

Looking at the Return On Assets, with a value of 4.12%, NTCT is in the better half of the industry, outperforming 72.92% of the companies in the same industry.
Looking at the Return On Equity, with a value of 5.69%, NTCT is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 4.83%, NTCT is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for NTCT is significantly below the industry average of 12.17%.
The 3 year average ROIC (2.83%) for NTCT is below the current ROIC(4.83%), indicating increased profibility in the last year.

		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

The Profit Margin of NTCT (10.38%) is better than 81.25% of its industry peers.
NTCT has a Operating Margin of 12.74%. This is in the better half of the industry: NTCT outperforms 77.08% of its industry peers.
NTCT's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 79.21%, NTCT belongs to the best 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%

More info and screens

ROA

ROE

ROIC

Operating and Profit Margin

Show most profitable peers

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.
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 2.75 indicates that NTCT is not a great score, but indicates only limited risk for bankruptcy at the moment.
NTCT's Altman-Z score of 2.75 is fine compared to the rest of the industry. NTCT outperforms 60.42% 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	2.75

ROIC/WACC0.49

WACC9.95%

2.3 Liquidity

A Current Ratio of 1.88 indicates that NTCT should not have too much problems paying its short term obligations.
NTCT has a Current ratio (1.88) which 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.
NTCT has a Quick ratio of 1.84. This is in the better half of the industry: NTCT outperforms 68.75% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.88
Quick Ratio	1.84

More info and screens

WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

Show peers with great health

3. Growth

3.1 Past

NTCT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.21%, which is quite good.
The Earnings Per Share has been growing slightly by 6.94% on average over the past years.
Looking at the last year, NTCT shows a quite strong growth in Revenue. The Revenue has grown by 9.60% in the last year.
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

NTCT is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.63% yearly.
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

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

More info and screens

Find the best growth stocks

Show best growing peers

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 11.60, which indicates a very decent valuation of NTCT.
91.67% 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 (28.60), we can say NTCT is valued rather cheaply.
A Price/Forward Earnings ratio of 10.89 indicates a reasonable valuation of NTCT.
95.83% of the companies in the same industry are more expensive than NTCT, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of NTCT to the average of the S&P500 Index (25.83), we can say NTCT is valued rather cheaply.

		Industry Rank	Sector Rank
PE	11.6
Fwd PE	10.89

4.2 Price Multiples

NTCT's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. NTCT is cheaper than 81.25% of the companies 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 95.83% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	7.92
EV/EBITDA	8.68

4.3 Compensation for Growth

The 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.