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Netscout Systems
(NASDAQ:NTCT)
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Rating:73Outperform
Price Target:
$45.00
▲(12.50% Upside)
Action:Upgraded
Date:08/07/26
NTCT scores well primarily due to strong financial health—low leverage, solid free cash flow, and a meaningful profitability rebound—plus a generally positive earnings call with reaffirmed FY2027 guidance and improved margins. The score is held back by weaker near-term technical momentum (below 20/50-day averages, negative MACD) and a relatively high P/E with no dividend yield provided.
Positive Factors
Very low leverage and strong balance sheet
Extremely low debt-to-equity and a conservative capital structure provide durable financial flexibility. This cushions the business against cyclical slowdowns, supports strategic investments or M&A, and reduces refinancing risk, preserving operating optionality over the next several quarters.
Negative Factors
Modest overall revenue growth
Sustained low top-line growth constrains long-term earnings scalability and increases dependence on margin expansion and cost discipline to drive profits. If revenue momentum doesn't accelerate, upside is limited and operational improvements may mask weaker demand trends.
Read all positive and negative factors
Positive Factors
Negative Factors
Very low leverage and strong balance sheet
Extremely low debt-to-equity and a conservative capital structure provide durable financial flexibility. This cushions the business against cyclical slowdowns, supports strategic investments or M&A, and reduces refinancing risk, preserving operating optionality over the next several quarters.
Read all positive factors
Netscout Systems Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down where sales are coming from across regions, highlighting which markets drive growth and where the company is exposed to local economic or currency swings. For investors, regional splits reveal demand patterns, sales concentration risks, and how global trends or government spending could affect future revenue.
Breaks down where sales are coming from across regions, highlighting which markets drive growth and where the company is exposed to local economic or currency swings. For investors, regional splits reveal demand patterns, sales concentration risks, and how global trends or government spending could affect future revenue.
Data provided by:
The Fly
The FlyNetscout Systems (NTCT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.88B
Dividend YieldN/A
Average Volume (3M)638.63K
Price to Earnings (P/E)23.4
Beta (1Y)0.94
Revenue Growth5.79%
EPS Growth65.56%
CountryUS
Employees2,063
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)1.67
Shares Outstanding72,707,310
10 Day Avg. Volume543,568
30 Day Avg. Volume638,630
Financial Highlights & Ratios
PEG Ratio-0.19
Price to Book (P/B)1.38
Price to Sales (P/S)2.65
P/FCF Ratio7.99
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$43.00Price Target Upside7.50% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)2.72
Revenue Forecast (FY)$902.42M
Netscout Systems Business Overview & Revenue Model
Company Description
NetScout Systems, Inc. specializes in delivering comprehensive service assurance and robust cybersecurity solutions, designed to protect digital business services from potential disruptions worldwide, with operations spanning the United States, Eu...
How the Company Makes Money
NETSCOUT makes money primarily by selling and supporting technology that delivers network visibility, performance analytics, and security threat detection/mitigation. Revenue is generated from (1) product sales, which typically include network mon...
Netscout Systems Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call presented a solid operational quarter with double‑digit top‑line growth, meaningful margin expansion, EPS upside, a strategic acquisition and a major patent milestone. Key strengths were Service Assurance momentum, product revenue growth, improved profitability, and enhanced DDoS capacity. Offsetting items included flat cybersecurity growth versus a tough comp, order timing that pulled $10M–$15M into the quarter (creating Q2 linearity risk), inventory buildup to hedge supply constraints, and slower service provider/international timing. On balance the positives—revenue and margin expansion, strategic acquisition and IP progress—outweigh the near‑term timing and segment weaknesses.Positive Updates
Top-Line Growth
Total revenue of $210.4M, up 12.7% year-over-year (management also reported ~13%); product revenue $86M, up 17.8% YoY; service revenue $124.4M, up 9.4% YoY.
Negative Updates
Cybersecurity Growth Largely Flat
Cybersecurity revenue increased only ~0.6% YoY (management cited ~1%), facing a difficult prior‑year comparison when that segment grew in the high‑teens; cybersecurity remains a long‑term opportunity but near‑term growth was muted.
Read all updates
Q1-2027 Updates
Positive
Negative
Top-Line Growth
Total revenue of $210.4M, up 12.7% year-over-year (management also reported ~13%); product revenue $86M, up 17.8% YoY; service revenue $124.4M, up 9.4% YoY.
Read all positive updates
Company Guidance
NETSCOUT reaffirmed its FY2027 guidance, calling for revenue of $885–$915 million and non‑GAAP EPS of $2.65–$2.80, with a non‑GAAP effective tax rate of ~20% and weighted‑average diluted shares of ~74–75 million; management expects year‑over‑year growth in both revenue and earnings, service revenue to grow in the low‑single‑digits for the full year, Q2 revenue to be broadly consistent with the prior‑year period (implying first‑half revenue growth in the mid‑single‑digits), and Q2 EPS to grow in the high‑single‑digits.Netscout Systems Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
88
Very Positive
Cash Flow
80
Positive
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 883.16M | 859.48M | 822.68M | 829.46M | 914.53M | 855.58M |
| Gross Profit | 693.93M | 637.85M | 643.94M | 642.04M | 691.43M | 641.39M |
| EBITDA | 198.24M | 176.75M | -294.85M | -60.87M | 174.01M | 146.72M |
| Net Income | 121.05M | 95.53M | -366.92M | -147.73M | 59.65M | 35.87M |
Balance Sheet | ||||||
| Total Assets | 2.31B | 2.35B | 2.19B | 2.60B | 2.82B | 3.19B |
| Cash, Cash Equivalents and Short-Term Investments | 629.41M | 667.96M | 491.47M | 423.13M | 419.00M | 703.20M |
| Total Debt | 39.98M | 39.59M | 76.01M | 182.59M | 209.29M | 469.26M |
| Total Liabilities | 647.81M | 705.26M | 626.18M | 703.24M | 790.91M | 1.13B |
| Stockholders Equity | 1.66B | 1.65B | 1.56B | 1.89B | 2.03B | 2.06B |
Cash Flow | ||||||
| Free Cash Flow | 258.08M | 285.43M | 210.97M | 52.47M | 146.00M | 285.61M |
| Operating Cash Flow | 271.76M | 294.54M | 217.67M | 58.81M | 156.65M | 296.01M |
| Investing Cash Flow | -133.39M | -92.83M | -7.00M | 13.36M | 15.30M | -68.35M |
| Financing Cash Flow | -73.25M | -76.69M | -142.01M | -69.35M | -419.43M | -54.16M |
Netscout Systems Technical Analysis
Negative
40.00
Price Trends
40.92
Negative
38.44
Positive
33.29
Positive
Market Momentum
-0.50
Positive
43.73
Neutral
48.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTCT, the sentiment is Negative. The current price of 40 is above the 20-day moving average (MA) of 39.96, below the 50-day MA of 40.92, and above the 200-day MA of 33.29, indicating a neutral trend. The MACD of -0.50 indicates Positive momentum. The RSI at 43.73 is Neutral, neither overbought nor oversold. The STOCH value of 48.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NTCT.
Netscout Systems Risk Analysis
Netscout Systems disclosed 34 risk factors in its most recent earnings report. Netscout Systems reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Netscout Systems Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $22.83B | 31.14 | 19.86% | ― | 9.41% | 10.59% | |
73 Outperform | $2.88B | 23.44 | 7.42% | ― | 5.79% | 65.56% | |
67 Neutral | $1.99B | 45.58 | 19.61% | 0.70% | 12.20% | -13.97% | |
66 Neutral | $112.44B | -526.87 | -13.86% | ― | 33.53% | -72.17% | |
65 Neutral | $1.27B | 73.47 | 5.05% | ― | 9.98% | 18.53% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $17.96B | 43.30 | 8.49% | ― | 5.87% | -0.31% |
* Technology Sector Average
NTCT
Netscout Systems
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NET
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56.23%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.