NETSCOUT SYSTEMS INC (NTCT) Stock Fundamental Analysis
NASDAQ:NTCT - Nasdaq - US64115T1043 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to NTCT. NTCT was compared to 50 industry peers in the Communications Equipment industry. NTCT has only an average score on both its financial health and profitability. NTCT is valued quite cheap, but it does not seem to be growing. These ratings would make NTCT suitable 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.
NTCT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of -16.78%, NTCT is doing worse than 72.00% of the companies in the same industry.
The Return On Equity of NTCT (-23.51%) is worse than 64.00% of its industry peers.
NTCT has a better Return On Invested Capital (3.55%) than 64.00% 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 13.82%.
The 3 year average ROIC (2.83%) for NTCT is below the current ROIC(3.55%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -16.78% | ||
| ROE | -23.51% | ||
| ROIC | 3.55% |
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 better Operating Margin (9.71%) than 76.00% of its industry peers.
NTCT's Operating Margin has improved in the last couple of years.
The Gross Margin of NTCT (78.27%) is better than 98.00% of its industry peers.
NTCT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.71% | ||
| PM (TTM) | N/A | ||
| GM | 78.27% |
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
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 2.15 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 2.15, NTCT is doing good in the industry, outperforming 64.00% of the companies in the same industry.
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 | 2.15 |
ROIC/WACC0.36
WACC9.98%
2.3 Liquidity
NTCT has a Current Ratio of 1.75. 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 of 1.75. This is comparable to the rest of the industry: NTCT outperforms 52.00% of its industry peers.
NTCT has a Quick Ratio of 1.72. 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 better Quick ratio (1.72) than 72.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.75 | ||
| Quick Ratio | 1.72 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 0.45% over the past year.
NTCT shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.94% yearly.
The Revenue has decreased by -0.81% in the past year.
NTCT shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.60% yearly.
EPS 1Y (TTM)0.45%
EPS 3Y6.11%
EPS 5Y6.94%
EPS Q2Q%-5.45%
Revenue 1Y (TTM)-0.81%
Revenue growth 3Y-1.3%
Revenue growth 5Y-1.6%
Sales Q2Q%0.76%
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 4.95% on average per year.
NTCT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.36% yearly.
EPS Next Y5.08%
EPS Next 2Y4.95%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year2.82%
Revenue Next 2Y2.61%
Revenue Next 3Y4.36%
Revenue Next 5YN/A
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
The Price/Earnings ratio is 10.04, which indicates a very decent valuation of NTCT.
Compared to the rest of the industry, the Price/Earnings ratio of NTCT indicates a rather cheap valuation: NTCT is cheaper than 94.00% of the companies listed in the same industry.
NTCT is valuated cheaply when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
NTCT is valuated reasonably with a Price/Forward Earnings ratio of 9.55.
Based on the Price/Forward Earnings ratio, NTCT is valued cheaply inside the industry as 92.00% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 21.76. NTCT is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.04 | ||
| Fwd PE | 9.55 |
4.2 Price Multiples
92.00% of the companies in the same industry are more expensive than NTCT, based on the Enterprise Value to EBITDA ratio.
90.00% 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 | 7.5 | ||
| EV/EBITDA | 7.36 |
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)1.98
PEG (5Y)1.45
EPS Next 2Y4.95%
EPS Next 3YN/A
5. Dividend
5.1 Amount
NTCT does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
22.18
-0.33 (-1.47%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners94.07%
Inst Owner Change0%
Ins Owners3.66%
Ins Owner Change0.64%
Market Cap1.58B
Analysts47.5
Price Target29.73 (34.04%)
Short Float %2.03%
Short Ratio3.05
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)14.43%
Min EPS beat(2)-0.04%
Max EPS beat(2)28.89%
EPS beat(4)3
Avg EPS beat(4)40%
Min EPS beat(4)-0.04%
Max EPS beat(4)128.76%
EPS beat(8)7
Avg EPS beat(8)33.09%
EPS beat(12)11
Avg EPS beat(12)30.38%
EPS beat(16)14
Avg EPS beat(16)28.72%
Revenue beat(2)2
Avg Revenue beat(2)7%
Min Revenue beat(2)2.42%
Max Revenue beat(2)11.59%
Revenue beat(4)3
Avg Revenue beat(4)3.76%
Min Revenue beat(4)-0.56%
Max Revenue beat(4)11.59%
Revenue beat(8)4
Avg Revenue beat(8)0.18%
Revenue beat(12)7
Avg Revenue beat(12)1.03%
Revenue beat(16)10
Avg Revenue beat(16)1.42%
PT rev (1m)0%
PT rev (3m)-2.24%
EPS NQ rev (1m)-10.61%
EPS NQ rev (3m)-6.35%
EPS NY rev (1m)0.44%
EPS NY rev (3m)0.29%
Revenue NQ rev (1m)-3.31%
Revenue NQ rev (3m)-3.67%
Revenue NY rev (1m)0.58%
Revenue NY rev (3m)0.77%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.04 | ||
| Fwd PE | 9.55 | ||
| P/S | 1.92 | ||
| P/FCF | 7.5 | ||
| P/OCF | 7.27 | ||
| P/B | 1.01 | ||
| P/tB | 7.02 | ||
| EV/EBITDA | 7.36 |
EPS(TTM)2.21
EY9.96%
EPS(NY)2.32
Fwd EY10.47%
FCF(TTM)2.96
FCFY13.33%
OCF(TTM)3.05
OCFY13.76%
SpS11.53
BVpS21.88
TBVpS3.16
PEG (NY)1.98
PEG (5Y)1.45
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -16.78% | ||
| ROE | -23.51% | ||
| ROCE | 4.49% | ||
| ROIC | 3.55% | ||
| ROICexc | 4.9% | ||
| ROICexgc | N/A | ||
| OM | 9.71% | ||
| PM (TTM) | N/A | ||
| GM | 78.27% | ||
| FCFM | 25.64% |
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-Score7
Asset Turnover0.38
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 10.5% | ||
| Cap/Sales | 0.81% | ||
| Interest Coverage | 19.06 | ||
| Cash Conversion | 151.53% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.75 | ||
| Quick Ratio | 1.72 | ||
| Altman-Z | 2.15 |
F-Score7
WACC9.98%
ROIC/WACC0.36
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)0.45%
EPS 3Y6.11%
EPS 5Y6.94%
EPS Q2Q%-5.45%
EPS Next Y5.08%
EPS Next 2Y4.95%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-0.81%
Revenue growth 3Y-1.3%
Revenue growth 5Y-1.6%
Sales Q2Q%0.76%
Revenue Next Year2.82%
Revenue Next 2Y2.61%
Revenue Next 3Y4.36%
Revenue Next 5YN/A
EBIT growth 1Y25.5%
EBIT growth 3Y18.01%
EBIT growth 5Y31.51%
EBIT Next Year1.11%
EBIT Next 3Y4.26%
EBIT Next 5YN/A
FCF growth 1Y302.05%
FCF growth 3Y-9.6%
FCF growth 5Y0.57%
OCF growth 1Y270.12%
OCF growth 3Y-9.74%
OCF growth 5Y-0.66%