NetScout Systems, Inc.
NetScout Systems, Inc. Fundamental Analysis
NetScout Systems, Inc. (NTCT) shows weak financial fundamentals with a PE ratio of 22.31, profit margin of 11.13%, and ROE of 6.07%. The company generates $0.9B in annual revenue with weak year-over-year growth of -0.82%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 48.5/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze NTCT's fundamental strength across five key dimensions:
Efficiency Score
WeakNTCT struggles to generate sufficient returns from assets.
Valuation Score
ModerateNTCT shows balanced valuation metrics.
Growth Score
WeakNTCT faces weak or negative growth trends.
Financial Health Score
ExcellentNTCT maintains a strong and stable balance sheet.
Profitability Score
WeakNTCT struggles to sustain strong margins.
Key Financial Metrics
Is NTCT Expensive or Cheap?
P/E Ratio
NTCT trades at 22.31 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, NTCT's PEG of 3.49 indicates potential overvaluation.
Price to Book
The market values NetScout Systems, Inc. at 1.30 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 14.93 times EBITDA. This signals the market has high growth expectations.
How Well Does NTCT Make Money?
Net Profit Margin
For every $100 in sales, NetScout Systems, Inc. keeps $11.13 as profit after all expenses.
Operating Margin
Core operations generate 12.78 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $6.07 in profit for every $100 of shareholder equity.
ROA
NetScout Systems, Inc. generates $4.13 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
NetScout Systems, Inc. generates strong operating cash flow of $285.74M, reflecting robust business health.
Free Cash Flow
NetScout Systems, Inc. generates strong free cash flow of $277.36M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $3.84 in free cash annually.
FCF Yield
NTCT converts 12.82% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
22.31
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
3.49
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.30
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.50
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.04
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.92
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.06
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.06
vs 25 benchmark
How NTCT Stacks Against Its Sector Peers
| Metric | NTCT Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 22.31 | 35.19 | Better (Cheaper) |
| ROE | 6.07% | 1155.00% | Weak |
| Net Margin | 11.13% | -127067.00% (disorted) | Strong |
| Debt/Equity | 0.04 | 0.41 | Strong (Low Leverage) |
| Current Ratio | 1.92 | 4.71 | Neutral |
| ROA | 4.13% | -314918.00% (disorted) | Weak |
NTCT outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews NetScout Systems, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-3.35%
Industry Style: Growth, Innovation, High Beta
DecliningEPS CAGR
-13859.34%
Industry Style: Growth, Innovation, High Beta
DecliningFCF CAGR
1.35%
Industry Style: Growth, Innovation, High Beta
Growing