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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Netscout Systems, Inc. (XNAS:NTCT) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
NTCT
Name:
NETSCOUT SYSTEMS, INC. (XNAS:NTCT)
Sector:
21.48M
Industry:
Software�Infrastructure
CEO:
Mr. Anil Singhal
Total Employees:
2,331
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -112.17% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF NETSCOUT SYSTEMS, INC.(NTCT) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�INFRASTRUCTURE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
30.78
One Month Price Target:
$30.89
Six Month Price Target :
$31.43
Likely Price in One Year's Time:
Ticker:
$32.09
Likely Trading Range Today Under (Normal Volatility)
$30.68
Price Upper limit ($) :
$30.92
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$29.29
This week:
$27.46
This month :
$24.13
Other Primary facts
Market Cap:
2.13B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
71.48M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.05%
-15.95%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$37.67
$34.50
$23.89
$27.06
Medium risk (<10%) entry points
Buy Call
Sell Call
$33.46
Buy Put:
Sell Put:
$32.78
$28.09
$28.78
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
NTCT
Sharpe Ratio:
2.32%
Comparison:
NTCT, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 42.08% higher than the industry
& ratio is 1.92% higher than the market/S&P 500 average
Average Returns/Yield of
NTCT
Daily returns:
0.06%
Weekly returns:
0.32%
Monthly returns:
1.28%
Yearly returns:
14.38%
Comparison of returns:
Average annual returns/yield (last 3 years) is 7.12% above industry average
Classification:
NTCT, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.77
Statistical test of Returns:
NTCT has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.38%
Weekly Volatility:
5.33%
Monthly Volatility:
10.66%
Yearly Volatility:
36.91%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.16%
Volatility in last five trading days has been -93.20% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.83%
Weekly VaR:
-10.80%
Monthly VaR:
-21.60%
How Much Can the price of
NTCT
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-74.81%
This translates to price declining to:
$25.13
This translates to price declining to:
$7.75
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
NTCT is a 52.42% riskier investment compared to the market/S&P 500 & is 30.58% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -28.49% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
NTCT
Beta in relation to market/S&P 500--0.63
Expected beta in 1 year's time:
0.59
Expected beta in 3 year's time:
0.834
Unlevered (debt free) Beta:
0.54
Beta in relation to Nasdaq (XNAS):
0.512
Beta in relation to all global stocks::
0.784
Beta Comparison & Analysis
Beta of competitors/peers::
1.561
Beta is -59.45% lower than peers
Average Industry Beta:
1.112
Beta is -43.05% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
2.77%
Sustainable growth rate is -99.25% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.079
Alpha is 118.93% above industry average alpha yield
Alpha is 504% higher than market/& is unsustainably high
Analysis of Cost of Capital of
NTCT
Equity cost of capital:
0.075
Equity cost of capital is -30.46% below industry mean WACC
Unlevered (without debt) cost of capital:
6.39%
Before-tax cost of debt:
1.78%
After-tax cost of debt:
1.40%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.40%
WACC is -11.84% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$11.97
Revenue growth rate per share of (3Y):
1.1
Annual revenue growth rate is -98.98% below industry average
EPS:
$0.48
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$3.89
-
-
Debt per share
$5.72
EBITDA per share
$2.61
Valuation Analysis Today of
NTCT
P/E Ratio:
58.05
P/E Ratio of Competitors/Peers:
88.93
P/E ratio is -34.72% lower than main peers & is -11.01% lower than the industry
Stock price/value with industry average P/E ratio: $31.31
NTCT is -1.70% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
2.57
Price to sales ratio is -76.58% below the industry mean
P/B (Price to book value ratio):
1.1
Price to free cash flow: 7.92
Price to free cash flow ratio is -82.66% lower than the industry
Net income growth rate (3Y):
-71.00%
Net income growth rate is -100.84% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
20.40%
Net debt to equity ratio:
-3.32%
Debt to assets ratio:
13.47%
Net debt to assets ratio:
-2.19%
Debt-to-asset ratio is -80.68% below industry average
Ability to repay debt:
Interest coverage ratio:
24.96
Interest coverage ratio is -111.83% less than industry average
Looking forward:
Debt growth rate:
-14.93%
Annual debt growth is -114% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.458
Statistical significance of correlation:
NTCT has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.48
Stock price is -4.53% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.48
Correlation of price movement with Nasdaq (^IXIC):
0.001
Covariance of price movement with the market:
0.002
Kurtosis
7.805
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.282
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
NTCT
Gross Profit Margin Ratio:
299%
Operating Profit Margin Ratio:
5.81%
Operating profit margin is -148.98% lower than the industry
Net Profit Margin Ratio:
299%
Effective Tax Rate:
15.95%
Effective tax rate is -49.08% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
1.85%
Return on equity (ROE) is -98.27% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
1.22%
Return on assets (ROA) is -132.19% lower than the industry
Financial Leverage:
1.2x
Current Ratio:
1.89
Current ratio is -18.63% below industry average
Cash Conversion Cycle (days):
75.6
Cash conversion cycle is -32.86% below industry average
The remaining useful life of property plant & equipment is: 10.9 years
Stock based compensation to net income ratio:
37.77%
In-depth Efficiency Analysis
Revenue generated per employee:
367.0K
Each employee generates -7% less revenue than industry average revenue per employee
EBITDA generated per employee:
80.1K
Each employee generates 22% more EBITDA than industry average revenue per employee
Profit generated per employee:
15.9K
Each employee generates -24% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
9.2K
Each employee generates -53% less free cash flow than industry average revenue per employee
Assets/Capital per employee
1.0M
Each employee generates -53% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- -4.85%
Growth rate in R&D investment/expenditure is 87.01% higher than the industry
Competitors/Peer firms of
NTCT
EVERBRIDGE, INC. (XNAS:EVBG)
CHICKEN SOUP FOR THE SOUL ENTERTAINMENT INC. (XNAS:CSSEN)
BIGCOMMERCE HOLDINGS, INC. (XNAS:BIGC)
SHOALS TECHNOLOGIES GROUP, INC. (XNAS:SHLS)
VERTEX, INC. (XNAS:VERX)
LIVEPERSON, INC. (XNAS:LPSN)
ECHOSTAR CORPORATION (XNAS:SATS)
RIOT BLOCKCHAIN, INC. (XNAS:RIOT)
SUPER MICRO COMPUTER, INC. (XNAS:SMCI)
Current Analyst Ratings
Strong buy�4%
Buy�13%
Hold�17%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
855.58M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
214.19M
641.39M
171.13M
96.59M
360.78M
264.19M
59.74M
591.66M
297.00K
7.48M
135.14M
186.61M
49.73M
36.97M
43.99M
7.02M
36.97M
Statement of Cash Flow
Date:
Period:
24.24M
Differed Income Tax :
- 2896.00K
Stock Based Compensation :
13.97M
Change in Working Capital :
- 2806.00K
Accounts Receivables:
-
Other Working Capital:
- 42766.00K
Other Non-Cash Items:
2.90M
Net Cash Provided by Operating Activities:
24.06M
Investments in PP&E:
- 2578.00K
Net Acquisitions:
-
Purchases of Investments:
- 5696.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
6/30/21
2022
Q1
487.17M
6.74M
493.91M
146.20M
19.53M
36.62M
696.26M
105.87M
1.72B
494.41M
-
8.20M
12.22M
2.34B
-
3.03B
16.96M
12.13M
5.49M
257.97M
80.51M
367.57M
408.58M
62.44M
662.53M
-
1.03B
124.00K
363.35M
- 1877.0K
1.64B
June 30, 2021 at 6:00:00 AM
805.84M
2.00B
3.03B
-
420.70M
- 66464.0K
8.23M
12.00K
- 32.00K
-
-
-
-
- 4777.00K
- 4777.00K
745.00K
19.99M
487.17M
467.18M
24.06M
- 2578.00K
21.48M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
NTCT
2023
2024
2025
2026
2027
$37.69
$39.30
$40.97
$42.71
$44.53