27.9 USD
-0.06 (-0.21%)
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. A decent growth rate in combination with a cheap valuation! Better keep an eye on NTCT. These ratings could make NTCT a good candidate 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.
- Each year in the past 5 years NTCT had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of NTCT (4.12%) is better than 72.92% of its industry peers.
- 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.
- NTCT has a better Return On Invested Capital (4.83%) 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 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
- NTCT has a Profit Margin of 10.38%. This is amongst the best in the industry. NTCT outperforms 81.25% of its industry peers.
- With a decent Operating Margin value of 12.74%, NTCT is doing good in the industry, outperforming 77.08% of the companies in the same industry.
- 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.
- 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 | 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.
- Compared to 1 year ago, NTCT has more shares outstanding
- NTCT has about the same amout of shares outstanding than it did 5 years ago.
- NTCT has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
- NTCT has an Altman-Z score of 2.74. 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.
- NTCT has a Altman-Z score of 2.74. This is in the better half of the industry: NTCT outperforms 60.42% of its industry peers.
- 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 | 2.74 |
ROIC/WACC0.49
WACC9.91%
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
- 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.
- NTCT shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.94% yearly.
- 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
- 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.
- NTCT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.53% yearly.
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.
- 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
- Based on the Price/Earnings ratio of 11.53, the valuation of NTCT can be described as reasonable.
- 91.67% of the companies in the same industry are more expensive than NTCT, based on the Price/Earnings ratio.
- NTCT's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.82.
- The Price/Forward Earnings ratio is 10.83, 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.
- NTCT is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.95, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.53 | ||
| Fwd PE | 10.83 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, NTCT is valued cheaply inside the industry as 81.25% of the companies are valued more expensively.
- 95.83% of the companies in the same industry are more expensive than NTCT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.87 | ||
| EV/EBITDA | 8.64 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The decent profitability rating of NTCT may justify a higher PE ratio.
PEG (NY)1.06
PEG (5Y)1.66
EPS Next 2Y7.99%
EPS Next 3Y6.63%
5. Dividend
5.1 Amount
- No dividends for NTCT!.
| 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.