NETSCOUT SYSTEMS INC (NTCT) Stock Fundamental Analysis
NASDAQ:NTCT - Nasdaq - US64115T1043 - Common Stock - Currency: USD
NTCT gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 49 industry peers in the Communications Equipment industry. NTCT has an average financial health and profitability rating. NTCT has a bad growth rate and is valued cheaply.
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.
In the past 5 years NTCT always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of -28.94%, NTCT is doing worse than 73.47% of the companies in the same industry.
Looking at the Return On Equity, with a value of -41.07%, NTCT is doing worse than 65.31% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 2.15%, NTCT is in line with its industry, outperforming 59.18% of the companies in the same industry.
NTCT had an Average Return On Invested Capital over the past 3 years of 2.33%. This is significantly below the industry average of 10.99%.
| 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 has a better Operating Margin (5.41%) than 65.31% of its industry peers.
In the last couple of years the Operating Margin of NTCT has grown nicely.
The Gross Margin of NTCT (77.08%) is better than 97.96% of its industry peers.
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so NTCT is destroying value.
The number of shares outstanding for NTCT has been increased compared to 1 year ago.
The number of shares outstanding for NTCT has been reduced compared to 5 years ago.
The debt/assets ratio for NTCT is higher compared to a year ago.
2.2 Solvency
NTCT has an Altman-Z score of 1.93. 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 1.93. This is in the better half of the industry: NTCT outperforms 67.35% of its industry peers.
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 has a Debt to FCF ratio of 0.55. This is in the better half of the industry: NTCT outperforms 77.55% of its industry peers.
NTCT has a Debt/Equity ratio of 0.05. This is a healthy value indicating a solid balance between debt and equity.
NTCT has a Debt to Equity ratio of 0.05. This is in the better half of the industry: NTCT outperforms 65.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.05 | ||
| Debt/FCF | 0.55 | ||
| Altman-Z | 1.93 |
ROIC/WACC0.22
WACC9.68%
2.3 Liquidity
A Current Ratio of 1.68 indicates that NTCT should not have too much problems paying its short term obligations.
NTCT has a Current ratio of 1.68. This is comparable to the rest of the industry: NTCT outperforms 40.82% 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.
NTCT's Quick ratio of 1.63 is in line compared to the rest of the industry. NTCT outperforms 57.14% of its industry peers.
| 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%.
NTCT shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.83% yearly.
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
Based on estimates for the next years, NTCT will show a small growth in Earnings Per Share. The EPS will grow by 3.00% on average per year.
The Revenue is expected to grow by 2.44% on average over the next years.
EPS Next Y1.69%
EPS Next 2Y2.51%
EPS Next 3Y3%
EPS Next 5YN/A
Revenue Next Year-3.09%
Revenue Next 2Y-0.56%
Revenue Next 3Y0.65%
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.
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
With a Price/Earnings ratio of 8.98, the valuation of NTCT can be described as very reasonable.
91.84% 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 (28.33), we can say NTCT is valued rather cheaply.
NTCT is valuated reasonably with a Price/Forward Earnings ratio of 8.70.
Based on the Price/Forward Earnings ratio, NTCT is valued cheaper than 91.84% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.37, NTCT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.98 | ||
| Fwd PE | 8.7 |
4.2 Price Multiples
NTCT's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. NTCT is cheaper than 81.63% of the companies in the same industry.
85.71% 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 | 10.62 | ||
| EV/EBITDA | 9.34 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates NTCT does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)5.31
PEG (5Y)0.93
EPS Next 2Y2.51%
EPS Next 3Y3%
5. Dividend
5.1 Amount
NTCT does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
20.12
+0.29 (+1.46%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners92.22%
Inst Owner Change0.52%
Ins Owners3.7%
Ins Owner Change-1.29%
Market Cap1.44B
Analysts47.5
Price Target30.41 (51.14%)
Short Float %3.1%
Short Ratio4.85
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)0%
PT rev (3m)7.19%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)-0.3%
EPS NY rev (3m)0.92%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.13%
Revenue NY rev (3m)0.45%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.98 | ||
| Fwd PE | 8.7 | ||
| P/S | 1.83 | ||
| P/FCF | 10.62 | ||
| P/OCF | 10.15 | ||
| P/B | 0.99 | ||
| P/tB | 14.37 | ||
| EV/EBITDA | 9.34 |
EPS(TTM)2.24
EY11.13%
EPS(NY)2.31
Fwd EY11.49%
FCF(TTM)1.89
FCFY9.42%
OCF(TTM)1.98
OCFY9.85%
SpS10.97
BVpS20.34
TBVpS1.4
PEG (NY)5.31
PEG (5Y)0.93
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 | 1.93 |
F-Score6
WACC9.68%
ROIC/WACC0.22
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 Y1.69%
EPS Next 2Y2.51%
EPS Next 3Y3%
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-3.09%
Revenue Next 2Y-0.56%
Revenue Next 3Y0.65%
Revenue Next 5Y2.44%
EBIT growth 1Y-48.89%
EBIT growth 3Y19.59%
EBIT growth 5YN/A
EBIT Next Year7.45%
EBIT Next 3Y3.08%
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%