NasdaqGS:NTCT

Stock Analysis Report

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Executive Summary

NetScout Systems, Inc. provides service assurance, security, and business analytics for digital business services against disruptions in availability, performance, and security.

Rewards

Trading at 24.7% below our estimate of its fair value

Earnings are forecast to grow 134.26% per year

Risk Analysis

No risks detected for NTCT from our risk checks.


Snowflake Analysis

Fair value with moderate growth potential.


Similar Companies

Share Price & News

How has NetScout Systems's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NTCT has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.0%

NTCT

1.1%

US Communications

1.6%

US Market


1 Year Return

-2.1%

NTCT

-16.6%

US Communications

4.8%

US Market

Return vs Industry: NTCT exceeded the US Communications industry which returned -16.6% over the past year.

Return vs Market: NTCT underperformed the US Market which returned 4.8% over the past year.


Shareholder returns

NTCTIndustryMarket
7 Day4.0%1.1%1.6%
30 Day-4.8%-3.1%2.3%
90 Day6.6%17.6%29.5%
1 Year-2.1%-2.1%-14.3%-16.6%7.1%4.8%
3 Year-24.9%-24.9%36.4%27.5%37.1%28.1%
5 Year-29.1%-29.1%63.2%44.0%67.2%48.6%

Price Volatility Vs. Market

How volatile is NetScout Systems's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is NetScout Systems undervalued compared to its fair value and its price relative to the market?

24.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NTCT ($25.7) is trading below our estimate of fair value ($34.15)

Significantly Below Fair Value: NTCT is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NTCT is unprofitable, so we can't compare its PE Ratio to the Communications industry average.

PE vs Market: NTCT is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate NTCT's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: NTCT is good value based on its PB Ratio (1x) compared to the US Communications industry average (2x).


Next Steps

Future Growth

How is NetScout Systems forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

134.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NTCT is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2.2%).

Earnings vs Market: NTCT is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: NTCT's is expected to become profitable in the next 3 years.

Revenue vs Market: NTCT's revenue (1.6% per year) is forecast to grow slower than the US market (9.3% per year).

High Growth Revenue: NTCT's revenue (1.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if NTCT's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has NetScout Systems performed over the past 5 years?

-24.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NTCT is currently unprofitable.

Growing Profit Margin: NTCT is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: NTCT is unprofitable, and losses have increased over the past 5 years at a rate of -24.7% per year.

Accelerating Growth: Unable to compare NTCT's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: NTCT is unprofitable, making it difficult to compare its past year earnings growth to the Communications industry (-36.4%).


Return on Equity

High ROE: NTCT has a negative Return on Equity (-0.14%), as it is currently unprofitable.


Next Steps

Financial Health

How is NetScout Systems's financial position?


Financial Position Analysis

Short Term Liabilities: NTCT's short term assets ($659.7M) exceed its short term liabilities ($399.0M).

Long Term Liabilities: NTCT's short term assets ($659.7M) do not cover its long term liabilities ($783.6M).


Debt to Equity History and Analysis

Debt Level: NTCT's debt to equity ratio (23.2%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if NTCT's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: NTCT's debt is well covered by operating cash flow (50%).

Interest Coverage: NTCT is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet


Next Steps

Dividend

What is NetScout Systems's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate NTCT's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate NTCT's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if NTCT's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if NTCT's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of NTCT's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

13.4yrs

Average management tenure


CEO

Anil Singhal (66yo)

36.08yrs

Tenure

US$2,745,534

Compensation

Mr. Anil K. Singhal co-founded NetScout Systems Inc. in 1984 and has been its Chief Executive Officer and Director since June 1984. Mr. Singhal has been Chairman of the Board and President at NetScout Syst ...


CEO Compensation Analysis

Compensation vs Market: Anil's total compensation ($USD2.75M) is below average for companies of similar size in the US market ($USD4.72M).

Compensation vs Earnings: Anil's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Anil Singhal
Co-Founder36.08yrsUS$2.75m4.67% $86.6m
Michael Szabados
Vice Chairman & COO1.42yrsUS$1.62m0.060% $1.1m
Jean Bua
Executive VP8.67yrsUS$1.43m0.084% $1.6m
John Downing
Executive Vice President of Worldwide Sales Operations13.5yrsUS$1.40m0.13% $2.4m
Anthony Piazza
Vice President of Corporate Financeno datano datano data
Bruce Kelley
CTO, Senior VP & Service Provider19.5yrsno datano data
Thor Wallace
Chief Information Officer & Senior VP3.5yrsno datano data
Jeff Levinson
VP, General Counsel & Secretary14.67yrsno datano data
Thomas Raimondi
Chief Marketing Officerno datano datano data
Kevin Keough
Senior Vice President of Corporate Development5yrsno datano data

13.4yrs

Average Tenure

62yo

Average Age

Experienced Management: NTCT's management team is seasoned and experienced (13.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Anil Singhal
Co-Founder36.08yrsUS$2.75m4.67% $86.6m
Michael Szabados
Vice Chairman & COO1.42yrsUS$1.62m0.060% $1.1m
John Egan
Lead Independent Directorno dataUS$306.30k0.12% $2.3m
Joseph Hadzima
Independent Director22yrsUS$265.05k0.17% $3.1m
Vivian Vitale
Independent Director1.42yrsUS$116.83k0.0055% $102.1k
Robert Donahue
Independent Director7.33yrsUS$275.80k0.035% $641.8k
Susan Spradley
Independent Director2.25yrsUS$247.38k0.012% $231.3k
Christopher Perretta
Independent Director5.83yrsUS$250.30k0.029% $533.8k
Alfred Grasso
Independent Director2.25yrsUS$247.13k0.012% $231.3k

4.0yrs

Average Tenure

66yo

Average Age

Experienced Board: NTCT's board of directors are considered experienced (4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

NetScout Systems, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: NetScout Systems, Inc.
  • Ticker: NTCT
  • Exchange: NasdaqGS
  • Founded: 1984
  • Industry: Communications Equipment
  • Sector: Tech
  • Market Cap: US$1.856b
  • Shares outstanding: 72.22m
  • Website: https://www.netscout.com

Number of Employees


Location

  • NetScout Systems, Inc.
  • 310 Littleton Road
  • Westford
  • Massachusetts
  • 1886
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NTCTNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDAug 1999
NSZDB (Deutsche Boerse AG)YesCommon StockDEEURAug 1999

Biography

NetScout Systems, Inc. provides service assurance, security, and business analytics for digital business services against disruptions in availability, performance, and security. The company offers nGeniusONE management software that enables customers to predict, preempt, and resolve network and service delivery problems, as well as facilitate the optimization and capacity planning of their network infrastructures; and specialized platforms and analytic modules that enable its customers to analyze and troubleshoot traffic in radio access and Wi-Fi networks. It also provides nGeniusPULSE, an active testing tool that enables enterprises to identify infrastructure performance issues and determine application availability, reliability, and performance; and nGenius Business Analytics solution, which enables service providers to analyze their network traffic. In addition, the company offers ISNG, an advanced passive network probe; packet flow systems that deliver targeted network traffic access to various monitoring and security tools and systems; and a suite of test access points that enable non-disruptive access to network traffic. Further, it provides security solutions that enable service providers and enterprises to protect their networks against distributed denial of service attacks under the Arbor brand; and threat detection solutions to identify and investigate potential advanced network threats. The company serves enterprise customers in industries, including financial services, technology, manufacturing, healthcare, utilities, education, transportation, and retail; mobile operators, wireline operators, cable operators, Internet service providers, and cloud providers; and governmental agencies through a direct sales force, and indirect reseller and distribution channels. It has operations in the United States, Asia, Europe, and internationally. The company was founded in 1984 and is headquartered in Westford, Massachusetts. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/04 00:12
End of Day Share Price2020/07/02 00:00
Earnings2020/03/31
Annual Earnings2020/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.