NetScout Systems Inc (NTCT) stock analysis

NTCTNasdaqServices-Computer Integrated Systems DesignFiscal year ends March 31

Financials through Q2 FY2027, quarter ended Sep 30, 2026Last filing: 10-Q on Nov 5, 2026Score 21/3031% below fair value

$32.72+0.45 (+1.39%)

Close on Nov 11, 2026Market cap $2.38BP/E 18.6Yield –

StockData Score

Prices as of Nov 11, 2026How the score works

Solid21 of 30 checks passed

NetScout Systems passes 21 of the 30 checks behind our score; 5 could not be run for lack of data and count as not passed. Each dot in the shape is one check — hover it for the numbers.

Valuation: 6/6
Growth: 4/6
Past performance: 5/6
Financial health: 6/6
Dividend: 0/6

What stands out

Margin of safety over 20%
The price is 30.9% below fair value, more than the 20% cushion we look for.
Trading below fair value
The share price of $32.72 is below our fair value estimate of $47.36.
Return on capital over 10%
Return on invested capital was 10.3%, above the 10% that usually covers the cost of capital.
No debt
NetScout Systems has no borrowings on its latest balance sheet.

What to watch

Return on equity under 15%
Return on equity was 8.1% over the last twelve months and averaged -3.6% over five years; we look for 15% on both.
Revenue growing under 10% a year
Revenue grew -2.0% a year over the last three fiscal years, short of the 10% we look for.
Growing slower than the industry
Revenue grew 2.7% over the last twelve months; the Computer Programming, Data Processing, and Other Computer Related Services median is 9.6%.
No dividend
NetScout Systems has not paid a dividend in the last twelve months.

Valuation6/6

P/E below its 5-year median
NetScout Systems's P/E of 18.6 is below its own 5-year median of 33.7.
P/E below the industry
NetScout Systems's P/E of 18.6 is below the Computer Programming, Data Processing, and Other Computer Related Services median of 27.6.
EV/EBITDA below its 5-year median
NetScout Systems's EV/EBITDA of 10.0 is below its 5-year median of 11.9.
P/B below the industry
NetScout Systems's price-to-book of 1.45 is below the Computer Programming, Data Processing, and Other Computer Related Services median of 3.32.
Trading below fair value
The share price of $32.72 is below our fair value estimate of $47.36.
Margin of safety over 20%
The price is 30.9% below fair value, more than the 20% cushion we look for.

Growth4/6

Revenue growing under 10% a year
Revenue grew -2.0% a year over the last three fiscal years, short of the 10% we look for.
EPS growing 10%+ a year
Diluted EPS grew 16.6% a year over the last three fiscal years.
Earnings growth accelerating
Net income grew 44.7% over the last twelve months, against a 5-year average of 37.6% a year.
Growing slower than the industry
Revenue grew 2.7% over the last twelve months; the Computer Programming, Data Processing, and Other Computer Related Services median is 9.6%.
Guidance raised
NetScout Systems raised its fiscal year 2026 Revenue outlook on Feb 5, 2026.
Gross margin improving
Gross margin was 79.7% over the last twelve months, against 79.2% a year earlier.

Past performance5/6

Return on equity under 15%
Return on equity was 8.1% over the last twelve months and averaged -3.6% over five years; we look for 15% on both.
Return on capital over 10%
Return on invested capital was 10.3%, above the 10% that usually covers the cost of capital.
Return on equity above the industry
NetScout Systems's return on equity of 8.1% is above the Computer Programming, Data Processing, and Other Computer Related Services median of -1.2%.
Earnings grew over 5 years
Net income grew 37.6% a year on average over the last five fiscal years.
Net margin above its 5-year average
Net margin was 14.6% over the last twelve months, against a 5-year average of -8.1%.
Net margin above the industry
NetScout Systems's net margin of 14.6% is above the Computer Programming, Data Processing, and Other Computer Related Services median of -4.8%.

Financial health6/6

No debt
NetScout Systems has no borrowings on its latest balance sheet.
Debt not rising
With no debt today, leverage cannot have risen.
Debt covered by cash flow
There is no debt to cover.
Interest well covered
Operating income covers interest expense 79.0 times.
Short-term assets cover short-term debts
Current assets are 1.73 times current liabilities.
Low bankruptcy risk
The Altman Z-score is 3.05; above 3 is the safe zone and below 1.8 the distress zone.

Dividend0/6

No dividend
NetScout Systems has not paid a dividend in the last twelve months.
Yield against Treasuries
No dividend.
Yield against the market
No dividend.
Dividend stability
No dividend.
Earnings cover
No dividend.
Cash-flow cover
No dividend.

Scores of similar companies

Fair value

How we estimate it

Our estimate per share

$47.36

The share price is 31% below this estimate.

20%+ below

Near fair value

20%+ above

$32.72Price$47.36Fair value

Method	Multiple used	Own 5Y median	Industry median	Value per share	Weight
P/E	30.6×	33.7×	27.6×	$53.94	40%
EV/EBITDA	15.3×	11.9×	18.8×	$46.79	35%
P/B	2.2×	1.1×	3.3×	$49.82	10%
Earnings power	8.5% cost of equity	–	–	$29.53	15%
Fair value				$47.36	100%

Valuation over time

Using the earnings and balance sheet published at each date, not today's.

P/E at month end
Own 5-year median 33.7
Computer Programming, Data Processing, and Other Computer Related Services median 27.6

An estimate from reported numbers and market multiples, not a price target or investment advice. It can be far off for companies whose profits are about to change sharply.

Market risk

From the past year of daily prices.

Liquidity

Low risk

Average value traded per day: $20.04M
Value traded per 1% price move: $14.14M

Downside

Low risk

Typical loss in a bad month: 14.5%
Volatility (annualized): 35%
Sharpe ratio, 1 year: 0.21
Beta to the S&P 500 (5Y): 0.73

Typical bad-month loss, week by week

Margins

Share of revenue, fiscal years 2012 to 2026

Gross margin

79.4%+6.1 pts over 5 years

Operating margin

12.8%+8.3 pts over 5 years

Net margin

11.1%+8.8 pts over 5 years

Growth rates

Compound annual growth to fiscal 2026

Per year	1 year	3 years	5 years	10 years
Revenue	+4.5%	-2.0%	+0.7%	-1.1%
Gross profit	+6.0%	-0.4%	+2.3%	+0.9%
Operating income	–	+12.2%	+24.2%	–
Net income	–	+17.0%	+37.6%	–
EPS, diluted	–	+16.6%	+38.0%	–
Free cash flow	+34.5%	+25.0%	+7.2%	+14.7%

Returns and balance sheet

10 fiscal years. Hover a measure to see how it is calculated.

Measure	FY2017	FY2021	FY2026
Return on equity	1.4%	1.0%	6.0%
Return on assets	0.9%	0.6%	4.2%
Current ratio	1.86	1.76	1.85
Debt to equity	0.12	0.17	–
Net debt to EBITDA	-0.02×	-0.82×	–
Interest coverage	6.8×	3.4×	64.4×
Inventory turnover	7.1×	9.9×	13.5×
Capex to revenue	2.6%	1.4%	1.1%
Diluted shares	93M	74M	73M

DuPont analysis

Return on equity split into margin, efficiency and leverage

Net margin11.1%

Asset turnover0.38×

Equity multiplier1.41×

Return on equity, FY20266.0%

Fiscal year	Net margin	Asset turnover	Equity multiplier	Return on equity
FY2026	11.1%	0.38×	1.41×	6.0%
FY2025	-44.6%	0.34×	1.39×	-21.3%
FY2024	-17.8%	0.31×	1.38×	-7.5%
FY2023	6.5%	0.30×	1.47×	2.9%
FY2022	4.2%	0.27×	1.54×	1.8%
FY2021	2.3%	0.27×	1.57×	1.0%
FY2020	-0.3%	0.28×	1.60×	-0.1%
FY2019	-8.1%	0.27×	1.61×	-3.5%
FY2018	8.1%	0.28×	1.55×	3.5%
FY2017	2.9%	0.32×	1.47×	1.4%

Where these numbers come from

Parsed from the XBRL in NetScout Systems's annual and quarterly filings with the SEC
Fourth quarters derived from the annual report minus nine months
Every figure in the statements links to its source filing