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1. Company Snapshot

1.a. Company Description

NetScout Systems, Inc.provides service assurance and cybersecurity solutions for protect digital business services against disruptions in the United States, Europe, Asia, and internationally.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 cybersecurity solutions to protect their networks against distributed denial of service attacks under the Arbor brand, such as Arbor Sightline, Arbor Threat Mitigation System, Arbor Insight, Arbor Edge Defense, and Arbor Cloud.


Additionally, it offers advanced threat detection solutions, such as Omnis Cyber Investigator.It serves enterprise customers in various 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.NetScout Systems, Inc.


was incorporated in 1984 and is headquartered in Westford, Massachusetts.

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1.b. Last Insights on NTCT

NetScout Systems' recent performance was driven by strong Q1 FY26 earnings, beating estimates with $0.34 per share, and robust product sales. The company's pivot to cybersecurity and enterprise is driving growth, margin expansion, and improved profitability. New enhancements to its Omnis Cyber Intelligence Network Detection and Response solution and AI-powered DDoS defense solutions have improved incident response and threat detection. Additionally, its participation in TM Forum's NeuroNOC Catalyst project and leadership position in the SPARK Matrix: Network Observability have further solidified its position.

1.c. Company Highlights

2. NETSCOUT's Strong Q2 FY2026 Earnings Driven by Cybersecurity and Service Assurance Growth

NETSCOUT reported a robust second quarter fiscal year 2026, with revenue reaching $219 million, a 15% year-over-year increase. Diluted earnings per share (EPS) came in at $0.62, significantly beating estimates of $0.45 and representing a 32% year-over-year increase. For the first half of the fiscal year, revenue was $406 million, an 11% year-over-year increase, with diluted EPS of $0.95, a 27% year-over-year increase. The company's gross profit margin also expanded, increasing by 1.7 percentage points to 81.4% in the second quarter, driven by a higher mix of software sales.

Publication Date: Nov -23

📋 Highlights
  • Revenue and EPS Growth:: Q2 revenue $219M (+15% YoY); H1 revenue $406M (+11% YoY); Q2 diluted EPS $0.62 (+32% YoY); H1 diluted EPS $0.95 (+27% YoY).
  • Segment Performance:: Service Assurance revenue +10% YoY in H1; Cybersecurity revenue +13% YoY in H1, driven by enterprise/service provider demand.
  • Customer Wins:: $830-870M full-year revenue guidance raised; $230-240M Q3 revenue outlook; $8-figure federal government deal and $7-figure telecom contract secured.
  • Margin Expansion:: Q2 gross profit margin rose 1.7pp to 81.4%; software-driven product mix supports sustained high margins.
  • Innovation and Strategy:: Launched Omnis KlearSight Sensor for Kubernetes; AI sensor/AI Insight AI solutions to target service assurance and DDoS markets; Adaptive DDoS revenue included in 2026 results.

Segment Performance

The company's Service Assurance revenue grew 10% year-over-year in the first half, driven by growth from enterprise and service provider customer verticals, particularly in the federal government sector. NETSCOUT's cybersecurity revenue also increased 13% year-over-year, driven by demand from both enterprise and service provider customer verticals seeking to protect against an increasingly complex cyber threat landscape.

Key Highlights and Customer Wins

Notable customer wins included an enterprise deal with a U.S. government agency in the 8-figure range and a low 7-figure deal with a major U.S. telecommunications company. The company also launched its Omnis KlearSight Sensor for Kubernetes, providing comprehensive observability within complex cloud environments. According to Anil Singhal, NETSCOUT is leveraging smart data telemetry to feed algorithms for better outcomes, and the company is creating new products such as AI sensor and AI Insight to allow customers to mix NETSCOUT's data with other datasets.

Outlook and Valuation

NETSCOUT raised its full-year revenue outlook to $830-870 million and non-GAAP diluted EPS to $2.35-2.45. For the third quarter, revenue is expected to be $230-240 million, with non-GAAP diluted EPS of $0.83-0.88. With a current P/E Ratio of 20.8 and an EV/EBITDA of 8.92, the market appears to be pricing in a certain level of growth. Analysts estimate next year's revenue growth at 5.1%, which is relatively modest compared to the company's recent performance. The stock's Free Cash Flow Yield of 13.71% is attractive, suggesting that the company's cash generation capabilities are underappreciated.

3. NewsRoom

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Wall Street Analysts Believe NetScout (NTCT) Could Rally 33.03%: Here's is How to Trade

Dec -03

Source: zacks.com

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Envestnet Asset Management Inc. Makes New Investment in NetScout Systems, Inc. $NTCT

Nov -27

Source: defenseworld.net

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3 Networking Stocks to Consider From a Thriving Industry

Nov -20

Source: zacks.com

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Bank of New York Mellon Corp Lowers Holdings in NetScout Systems, Inc. $NTCT

Nov -19

Source: defenseworld.net

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Does NetScout (NTCT) Have the Potential to Rally 32.49% as Wall Street Analysts Expect?

Nov -17

Source: zacks.com

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NetScout: Visibility Is Strengthening, And The Stock Still Has Room To Run

Nov -13

Source: seekingalpha.com

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NetScout Systems, Inc. (NTCT) Q2 2026 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

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NetScout (NTCT) Q2 Earnings: How Key Metrics Compare to Wall Street Estimates

Nov -06

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.39%)

6. Segments

Hardware and Software Solutions Service

Expected Growth: 10.27%

NetScout Systems, Inc.'s 10.27% growth in Hardware and Software Solutions Service is driven by increasing demand for network performance management, cybersecurity threats, and digital transformation. Growing adoption of cloud, IoT, and 5G technologies also fuels growth. Additionally, the company's strategic acquisitions and partnerships, such as the purchase of Danaher's Communications Business, expand its product portfolio and customer base.

Hardware and Software Solutions Product

Expected Growth: 10.55%

The 10.55% growth of NetScout Systems, Inc.'s Hardware and Software Solutions Product is driven by increasing demand for network performance management, cybersecurity threats, and digital transformation. Growing adoption of cloud, IoT, and 5G technologies also fuels growth. Additionally, NetScout's product portfolio expansion, strategic partnerships, and strong sales execution contribute to the segment's growth.

7. Detailed Products

nGeniusONE

A real-time, scalable, and modular network performance management solution that provides visibility into network traffic, application performance, and service delivery

nGeniusPULSE

A network-based application performance monitoring solution that provides visibility into application performance, user experience, and business transactions

nGenius packet flow systems

A family of packet flow appliances that provide real-time network traffic monitoring, analysis, and reporting

ISNG (Intelligent Sensor Network Gateway)

A network appliance that provides real-time network traffic monitoring, analysis, and reporting for security and performance use cases

OptiView XG

A network analysis and troubleshooting solution that provides real-time network performance monitoring and analysis

TruView

A network performance monitoring and analysis solution that provides real-time visibility into network traffic, application performance, and user experience

8. NetScout Systems, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for NetScout Systems, Inc. is medium due to the presence of alternative network performance management solutions.

Bargaining Power Of Customers

The bargaining power of customers for NetScout Systems, Inc. is low due to the company's strong brand reputation and the complexity of its products.

Bargaining Power Of Suppliers

The bargaining power of suppliers for NetScout Systems, Inc. is medium due to the presence of multiple suppliers for its hardware and software components.

Threat Of New Entrants

The threat of new entrants for NetScout Systems, Inc. is low due to the high barriers to entry in the network performance management market.

Intensity Of Rivalry

The intensity of rivalry for NetScout Systems, Inc. is high due to the presence of several established competitors in the network performance management market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 5.59%
Debt Cost 5.64%
Equity Weight 94.41%
Equity Cost 7.24%
WACC 7.16%
Leverage 5.92%

11. Quality Control: NetScout Systems, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Consensus Cloud Solutions

A-Score: 5.1/10

Value: 8.6

Growth: 2.4

Quality: 7.6

Yield: 0.0

Momentum: 8.0

Volatility: 3.7

1-Year Total Return ->

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i3 Verticals

A-Score: 5.1/10

Value: 3.6

Growth: 4.8

Quality: 7.8

Yield: 0.0

Momentum: 8.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
NetScout Systems

A-Score: 5.0/10

Value: 5.5

Growth: 1.7

Quality: 7.5

Yield: 0.0

Momentum: 8.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Yext

A-Score: 4.3/10

Value: 2.4

Growth: 6.9

Quality: 5.9

Yield: 0.0

Momentum: 7.5

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Zuora

A-Score: 4.2/10

Value: 5.2

Growth: 4.3

Quality: 3.9

Yield: 0.0

Momentum: 6.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Appian

A-Score: 4.2/10

Value: 4.9

Growth: 6.4

Quality: 5.4

Yield: 0.0

Momentum: 4.0

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

27.02$

Current Price

27.02$

Potential

-0.00%

Expected Cash-Flows