Quality Investor

NetScout Systems, Inc.

Rank #221ValueWatchlistCompare with other stocks

NTCT · Nasdaq · Technology

NetScout Systems, Inc. (NTCT) — Rank #221 by gross profitability (GP/assets 0.30) · ROE 5.7% · Piotroski F-Score N/A.

As-of 2026-10-30 · CIK 0001078075 · all metrics point-in-time as of the filing date.

About

NetScout Systems, Inc. provides carrier service assurance, cybersecurity, and Distributed Denial-of-Service (DDoS) solutions to protect digital business services against disruptions.

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It offers nGeniusONE management software 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 to analyze and troubleshoot traffic in radio access and Wi-Fi networks; and Omnis Insights, a solution that is designed to generate a high-fidelity and curated dataset that strengthens observability and cybersecurity operations. Its platform provides real-time generation and analysis of information-rich, high-volume network-derived data for use its applications and partner networks. In addition, it offers ISNG, a real-time information platform that provides insights to optimize network performance; packet flow systems that delivers targeted network traffic access to a range of monitoring and cybersecurity tools and systems, including the nGeniusONE application; vSTREAM, a virtualized form factor version; Infinistream, an advanced passive network probe; and markets test access points that enables full and non-disruptive access to network traffic. Further, the company provides cybersecurity solutions to protect networks against DDoS attacks under the Arbor solutions, including Arbor Sightline, Arbor Threat Mitigation System, Arbor Insight, Arbor Edge Defense, and Omnis Cyber Intelligence solutions. It serves enterprise customers in financial services, technology, manufacturing, healthcare, utilities, education, transportation, and retail; mobile, wireline, and cable operators, internet service providers, and cloud providers industries; and government and associated agencies through a direct sales force, and indirect reseller and distribution channels.

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

Industry
Software - Infrastructure
Sector
Technology
State
DE
Filer Category
Large accelerated filer
Fiscal Year End
March 31

Company Snapshot

P/E and dividend yield are the primary valuation lenses for mature businesses.

Market Cap

—

P/E (annual)

—

P/S (annual)

—

P/B

—

P/OCF (annual)

—

Shareholder Yield

—

Employees

2,052

Industry

Software - Infrastructure

Exchange

Nasdaq

10/11

Flags passed

NTCT passes 10/11 quality flags

1 caution to review

  • CAUTION
    Dilution above 2%

    Annual share count increase exceeds 2%. May be acceptable for high-growth companies funding talent via stock compensation

  • PASS
    Gross margin holding
  • PASS
    FCF not negative from investment
  • PASS
    Disclosure consistent
  • PASS
    Revenue not declining
  • PASS
    Operating margin holding
  • PASS
    Free cash flow intact
  • PASS
    Passes safety gate
  • PASS
    No competitive retreat
  • PASS
    SBC not compressing margin
  • PASS
    No valuation convergence

Strengths Revenue growth accelerating · Deferred revenue growing · Sequential beat (rev + EPS)

No data Balance sheet — not counted as a pass.

A count of the 12 warning flags that could be evaluated. Unweighted: colour follows the worst flag.

Quality Profile

Profitability

1/1 pass
GP / assets
0.30
Return on equity
5.7%
Gross margin trend
PASS

Safety

1/1 pass
Balance-sheet safety
PASS
Debt / equity
0.39
Current ratio
1.83×
Net cash
$668.47M

Cash Flow

3/3 pass
Positive FCF
PASS
Cash-backed earnings
PASS
Accruals healthy
PASS
SBC / revenue
7.0%

Growth

1/2 pass
Revenue growth
4.5%
Piotroski F-Score
N/A
Share dilution
2.4%

Dividend yield and payout ratio are the primary reads at this stage (trailing P/E — see valuation above).

Profitability

Does it make money well?

No warning flags · GP/assets 0.30

Gross profitability (GP / assets)

0.30

Primary signal (Novy-Marx).

5th of 8 SIC 7373 peers

Return on equity

5.7%

Gross margin

79.4%

1st of 7 SIC 7373 peers

Revenue growth (YoY)

4.5%

Gross margin improving

Margin trend vs prior year.

PASS

Operating Leverage

2023202420252026
Revenue vs COGS
Revenue vs OpEx
Op. Income vs Revenue

Growth

Revenue CAGR (3Y)

-2.0%

Revenue CAGR (5Y)

0.7%

Earnings CAGR (3Y)

17.0%

FCF CAGR (3Y)

25.0%

Cash Flow Health

Is the cash real?

No warning flags · FCF 199% above net income

Free cash flow

$285.43M

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF vs net income

198.8%

(FCF − net income) ÷ |net income|. Positive: cash above earnings. Negative: below.

FCF not below net income

Fails when free cash flow is below net income (yellow flag).

PASS

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

7.0%

Stock-based comp intensity.

Balance Sheet Strength

Can it survive a storm?

Caution: Dilution above 2% · net cash $668.47M

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

0.39

1st of 8 SIC 7373 peers (best = lowest)

Current ratio

1.83×

2nd of 8 SIC 7373 peers

Quick ratio

1.68×

Net cash

$668.47M

Cash & equivalents minus total debt.

Piotroski F-Score

N/A

Only 8/9 components determinable.

Valuation

Is the price reasonable?

No warning flags

Capital allocation quality

Composite score

3.3 / 5

Good
Share count trend
2.4%2/5 Fair
Buyback timing
N/AN/A
Dividend growth consistency(non-payer or broken streak)
0 yr3/5 Good
Net debt trajectory(deleveraging)
9.0%5/5 Strong

Lifecycle Phase History

20212026
Capital Return
Value
Decline
Startup

Price History

NTCT+41.3% · +7.1% CAGRSPY+82.9% · +12.8% CAGR