NetScout Systems, Inc. (NASDAQ:NTCT), which is in the communications business, and is based in United States, received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to $26.62 at one point, and dropping to the lows of $21.22. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether NetScout Systems’s current trading price of $22.2 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at NetScout Systems’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for NetScout Systems
What is NetScout Systems worth?
Good news, investors! NetScout Systems is still a bargain right now. According to my valuation, the intrinsic value for the stock is $39.9, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that NetScout Systems’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will NetScout Systems generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Though in the case of NetScout Systems, it is expected to deliver a relatively unexciting top-line growth of 3.9% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since NTCT is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on NTCT for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy NTCT. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on NetScout Systems. You can find everything you need to know about NetScout Systems in the latest infographic research report. If you are no longer interested in NetScout Systems, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.