Netskope (NTSK) Valuation Check as New MCP Security Features Target Emerging Enterprise AI Risks

Netskope (NTSK) just rolled out new security features for Model Context Protocol traffic inside its Netskope One platform, a timely move as more enterprises plug AI agents directly into sensitive internal systems.

See our latest analysis for Netskope.

The new MCP protections land as Netskope’s 1 day share price return of 7.36 percent and 7 day share price return of 10.75 percent contrast with a weaker year to date share price return of negative 12.49 percent. This suggests short term momentum is improving despite a softer longer term trend.

If today’s AI security story has your attention, it could be a good moment to see what else is shaping the sector through high growth tech and AI stocks.

With revenue still growing near 20 percent annually and shares trading at a steep discount to analyst targets, is Netskope an overlooked AI security play or is the market already pricing in its next leg of growth?

Price-to-Sales of 12.2x, Is it Justified?

Netskope closed at $19.68 per share, but its current valuation lens is a steep 12.2 times sales, well above key benchmarks.

The price to sales ratio compares the company’s market value to its annual revenue and is often used for fast growing, yet unprofitable, software and cloud businesses. For Netskope, this multiple is doing a lot of heavy lifting, asking investors to pay a premium long before earnings turn positive.

That premium stands out. Netskope trades on a 12.2 times price to sales ratio compared to a peer group average of 8.3 times and a US software industry average of just 5 times. This is a rich mark that assumes its growth trajectory and eventual path to profitability will outpace many rivals.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price to sales of 12.2x (OVERVALUED)

However, slowing top line growth or a prolonged path to profitability could quickly challenge the premium multiple that investors are currently paying for Netskope.

Find out about the key risks to this Netskope narrative.

Another Lens on Value

Our DCF model paints a far less generous picture, putting Netskope’s fair value closer to $9.96 per share, well below the current $19.68 price and implying the stock is overvalued on cash flows too. If both lenses flash rich, what exactly is the market betting on?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Netskope for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 908 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Netskope Narrative

If this perspective is not quite how you see Netskope’s story, review the numbers yourself and build a tailored view in minutes, Do it your way.

A great starting point for your Netskope research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

Ready for more actionable investment ideas?

Before you move on, you may wish to consider using the Simply Wall St Screener to surface opportunities you might otherwise overlook.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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