NETSCOUT SYSTEMS INC (NTCT) Stock Fundamental Analysis
USA - NASDAQ:NTCT - US64115T1043 - Common Stock
25.83 USD
-0.23 (-0.88%)
25.83 USD
0 (0%)
NTCT gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 48 industry peers in the Communications Equipment industry. NTCT has only an average score on both its financial health and profitability. NTCT is cheap, but on the other hand it scores bad on growth. This makes NTCT very considerable for value investing!
1. Profitability
1.1 Basic Checks
In the past year NTCT was profitable.
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 3.37%, NTCT is doing good in the industry, outperforming 64.58% of the companies in the same industry.
NTCT's Return On Equity of 4.70% is fine compared to the rest of the industry. NTCT outperforms 64.58% of its industry peers.
NTCT has a better Return On Invested Capital (4.18%) than 68.75% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NTCT is significantly below the industry average of 13.71%.
The 3 year average ROIC (2.83%) for NTCT is below the current ROIC(4.18%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.37% | ||
| ROE | 4.7% | ||
| ROIC | 4.18% |
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 8.72%, NTCT is in the better half of the industry, outperforming 77.08% of the companies in the same industry.
NTCT has a better Operating Margin (11.21%) than 77.08% of its industry peers.
NTCT's Operating Margin has improved in the last couple of years.
NTCT has a Gross Margin of 78.70%. This is amongst the best in the industry. NTCT outperforms 97.92% of its industry peers.
NTCT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.21% | ||
| PM (TTM) | 8.72% | ||
| GM | 78.7% |
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.
Compared to 1 year ago, NTCT has more shares outstanding
Compared to 5 years ago, NTCT has about the same amount of shares outstanding.
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 2.51 indicates that NTCT is not a great score, but indicates only limited risk for bankruptcy at the moment.
NTCT's Altman-Z score of 2.51 is fine compared to the rest of the industry. NTCT outperforms 64.58% 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 | 2.51 |
ROIC/WACC0.42
WACC10%
2.3 Liquidity
NTCT has a Current Ratio of 1.77. 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 (1.77) which is in line with its industry peers.
A Quick Ratio of 1.73 indicates that NTCT should not have too much problems paying its short term obligations.
NTCT's Quick ratio of 1.73 is fine compared to the rest of the industry. NTCT outperforms 64.58% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.77 | ||
| Quick Ratio | 1.73 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.61% over the past year.
The Earnings Per Share has been growing slightly by 6.94% on average over the past years.
NTCT shows a small growth in Revenue. In the last year, the Revenue has grown by 5.29%.
The Revenue has been decreasing by -1.60% on average over the past years.
EPS 1Y (TTM)4.61%
EPS 3Y6.11%
EPS 5Y6.94%
EPS Q2Q%21.43%
Revenue 1Y (TTM)5.29%
Revenue growth 3Y-1.3%
Revenue growth 5Y-1.6%
Sales Q2Q%6.98%
3.2 Future
NTCT is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.86% yearly.
The Revenue is expected to grow by 4.22% on average over the next years.
EPS Next Y5.08%
EPS Next 2Y4.95%
EPS Next 3Y5.86%
EPS Next 5YN/A
Revenue Next Year3.53%
Revenue Next 2Y3.16%
Revenue Next 3Y4.22%
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.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 11.38, the valuation of NTCT can be described as reasonable.
NTCT's Price/Earnings ratio is rather cheap when compared to the industry. NTCT is cheaper than 91.67% of the companies in the same industry.
NTCT is valuated cheaply when we compare the Price/Earnings ratio to 27.38, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 10.61, which indicates a very decent valuation of NTCT.
NTCT's Price/Forward Earnings ratio is rather cheap when compared to the industry. NTCT is cheaper than 95.83% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of NTCT to the average of the S&P500 Index (22.86), we can say NTCT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.38 | ||
| Fwd PE | 10.61 |
4.2 Price Multiples
87.50% of the companies in the same industry are more expensive than NTCT, based on the Enterprise Value to EBITDA ratio.
NTCT's Price/Free Cash Flow ratio is rather cheap when compared to the industry. NTCT is cheaper than 95.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.56 | ||
| EV/EBITDA | 8.22 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of NTCT may justify a higher PE ratio.
PEG (NY)2.24
PEG (5Y)1.64
EPS Next 2Y4.95%
EPS Next 3Y5.86%
5. Dividend
5.1 Amount
NTCT does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
25.83
-0.23 (-0.88%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners93.69%
Inst Owner Change-0.74%
Ins Owners3.64%
Ins Owner Change5.25%
Market Cap1.86B
Analysts76
Price Target30.71 (18.89%)
Short Float %3.57%
Short Ratio3.75
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)6.48%
Min EPS beat(2)-0.04%
Max EPS beat(2)12.99%
EPS beat(4)3
Avg EPS beat(4)11.06%
Min EPS beat(4)-0.04%
Max EPS beat(4)28.89%
EPS beat(8)7
Avg EPS beat(8)34.69%
EPS beat(12)11
Avg EPS beat(12)30.88%
EPS beat(16)15
Avg EPS beat(16)29.73%
Revenue beat(2)2
Avg Revenue beat(2)1.76%
Min Revenue beat(2)1.1%
Max Revenue beat(2)2.42%
Revenue beat(4)3
Avg Revenue beat(4)3.64%
Min Revenue beat(4)-0.56%
Max Revenue beat(4)11.59%
Revenue beat(8)5
Avg Revenue beat(8)0.38%
Revenue beat(12)8
Avg Revenue beat(12)1.12%
Revenue beat(16)10
Avg Revenue beat(16)1.48%
PT rev (1m)3.3%
PT rev (3m)3.3%
EPS NQ rev (1m)-8.59%
EPS NQ rev (3m)-13.92%
EPS NY rev (1m)0%
EPS NY rev (3m)0.44%
Revenue NQ rev (1m)0.72%
Revenue NQ rev (3m)0.79%
Revenue NY rev (1m)0.69%
Revenue NY rev (3m)1.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.38 | ||
| Fwd PE | 10.61 | ||
| P/S | 2.22 | ||
| P/FCF | 7.56 | ||
| P/OCF | 7.34 | ||
| P/B | 1.2 | ||
| P/tB | 8.16 | ||
| EV/EBITDA | 8.22 |
EPS(TTM)2.27
EY8.79%
EPS(NY)2.43
Fwd EY9.42%
FCF(TTM)3.42
FCFY13.22%
OCF(TTM)3.52
OCFY13.62%
SpS11.61
BVpS21.53
TBVpS3.16
PEG (NY)2.24
PEG (5Y)1.64
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.37% | ||
| ROE | 4.7% | ||
| ROCE | 5.29% | ||
| ROIC | 4.18% | ||
| ROICexc | 5.97% | ||
| ROICexgc | N/A | ||
| OM | 11.21% | ||
| PM (TTM) | 8.72% | ||
| GM | 78.7% | ||
| FCFM | 29.4% |
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-Score9
Asset Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 11.36% | ||
| Cap/Sales | 0.88% | ||
| Interest Coverage | 34.01 | ||
| Cash Conversion | 160.04% | ||
| Profit Quality | 337.32% | ||
| Current Ratio | 1.77 | ||
| Quick Ratio | 1.73 | ||
| Altman-Z | 2.51 |
F-Score9
WACC10%
ROIC/WACC0.42
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)4.61%
EPS 3Y6.11%
EPS 5Y6.94%
EPS Q2Q%21.43%
EPS Next Y5.08%
EPS Next 2Y4.95%
EPS Next 3Y5.86%
EPS Next 5YN/A
Revenue 1Y (TTM)5.29%
Revenue growth 3Y-1.3%
Revenue growth 5Y-1.6%
Sales Q2Q%6.98%
Revenue Next Year3.53%
Revenue Next 2Y3.16%
Revenue Next 3Y4.22%
Revenue Next 5YN/A
EBIT growth 1Y92.87%
EBIT growth 3Y18.01%
EBIT growth 5Y31.51%
EBIT Next Year1.11%
EBIT Next 3Y6.03%
EBIT Next 5YN/A
FCF growth 1Y79.71%
FCF growth 3Y-9.6%
FCF growth 5Y0.57%
OCF growth 1Y72.2%
OCF growth 3Y-9.74%
OCF growth 5Y-0.66%