Serves enterprise clients across sectors such as financial services, healthcare, manufacturing, and telecommunications, as well as service providers and government agencies globally.Generates revenue through the sale of software platforms, hardware appliances, and related services for network visibility, analytics, and security.What is the market context for this disposition and did timing impact valuation? The sale was executed at around $27.23 per share, near both the open and close on Dec. 3, 2025, when ...

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the "long context," investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.Even ...

Shares of NetScout Systems (NTCT) have gained 1.5% over the past four weeks to close the last trading session at $27.31, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $36.33 indicates a potential upside of 33%.The mean estimate comprises three short-term price targets with a standard deviation of $6.11. While the lowest estimate of $31.00 indicates a 13.5% increase from the cu ...

Industry Overview - The Zacks Computer - Networking industry is poised for growth driven by advancements in cloud computing, network security, big data, and next-gen connectivity, particularly with the rapid adoption of AI technology [1][2] - The proliferation of AI workloads and hyperscale data centers is leading to increased investments in high-speed interconnects, optical networking, and Ethernet switches [1] - The deployment of 5G technology is enhancing the Internet of Things (IoT), Advanced Driver Assistance Systems, AR/VR devices, and 5G smartphones, thereby increasing demand for robust networking infrastructure [1] Trends Influencing the Industry - The explosion of AI workloads necessitates significant upgrades in observability infrastructure, increasing the demand for innovative networking products [2] - The rapid deployment of 5G technology is expected to boost growth prospects, with substantial investments required to upgrade core fiber backhaul networks [5] - The upcoming Wi-Fi 7 upgrade cycle is anticipated to drive momentum in the industry, addressing Wi-Fi spectrum shortages and supporting a higher number of connected devices [6] Company Performance - NetScout Systems reported a 15% year-over-year revenue increase to $219 million in Q2 of fiscal 2026, driven by demand across enterprise and service provider markets [20] - Digi International achieved a 9% year-over-year revenue growth of $114 million in fiscal 2025, with a 31% surge in Annual Recurring Revenue (ARR) to $152 million [28] - Lantronix reported a 3% year-over-year revenue increase to $29.8 million in Q1 of fiscal 2026, with significant growth in its unmanned aerial systems segment [34] Stock Market Performance - The Zacks Computer - Networking industry has outperformed the S&P 500 Composite and the broader Zacks Computer and Technology sector, gaining 33.4% over the past year compared to the sector's 23.9% and the S&P 500's 12.9% [11] - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 22.45X, slightly below the S&P 500's 22.78X and the sector's 27.8X [14] Future Outlook - The Zacks Industry Rank for the Computer - Networking industry is 38, placing it in the top 16% of over 243 Zacks industries, indicating bright near-term prospects [9] - Companies in the industry are focusing on innovation in networking technologies, including network virtualization and Software-Defined Networking, to meet the growing demand for secure infrastructure [4]

Summary of NetScout Systems Conference Call Company Overview - **Company**: NetScout Systems (NasdaqGS: NTCT) - **Conference Date**: November 19, 2025 Key Points Financial Performance - **Q2 Revenue Growth**: NetScout reported a revenue growth of **15%** in Q2, with contributions from both service assurance and cybersecurity sectors [4][5] - **First Half Growth**: The company achieved an **11%** growth in revenue for the first half of the fiscal year [5] - **Customer Behavior**: Despite macroeconomic uncertainties, there has been no significant pullback in customer spending observed [6] Industry Dynamics - **5G Capacity Utilization**: The company noted a turning point in the 5G market, where previously deployed capacity is now being utilized, leading to increased demand for monitoring tools [9][10] - **AI Traffic Growth**: The rise in AI-related traffic is expected to create additional network demands, further driving the need for NetScout's services [11] Capital Expenditure Trends - **Carrier Investments**: Major carriers like Verizon and AT&T are focusing on investing in fiber infrastructure to enhance network capacity and reduce costs [14][15] - **Satellite Deployment**: Carriers are also exploring satellite technology to expand coverage, which will necessitate more monitoring solutions [16] Cybersecurity Focus - **Cybersecurity Growth**: The cybersecurity segment grew by **13%** in the first half of the year, driven by ongoing threats and the need for modern technology [12] - **Adaptive DDoS Solutions**: The company is focusing on adaptive DDoS solutions to help enterprises manage cybersecurity threats more effectively [39][42] Product Development - **AI Integration**: NetScout is embedding AI into its products, including new offerings like AI Sensor and Streamer, to enhance observability and data analysis capabilities [18][19] - **DPI Technology**: The company has a strong competitive advantage in Deep Packet Inspection (DPI) technology, which is becoming increasingly relevant in the AI and cybersecurity landscape [25] Strategic Outlook - **Future Growth Opportunities**: The management expressed optimism about future growth driven by tailwinds in service assurance and cybersecurity, as well as the integration of AI into their offerings [50][52] - **Investment Strategy**: The company maintains a strong balance sheet and is focused on organic growth opportunities, while also considering potential acquisitions [46][48] Market Position - **Competitive Landscape**: NetScout has established a strong moat in the DPI space with minimal competition, positioning itself well for future growth [25] Conclusion - **Investment Rationale**: The management believes that the headwinds faced in previous years are dissipating, and there are multiple catalysts for growth, making it an opportune time for potential investors to consider NetScout [51][52]

Core Viewpoint - NetScout Systems (NTCT) shows potential for significant upside, with a mean price target of $36.33 indicating a 32.5% increase from the current price of $27.42 [1] Price Targets - The average price target consists of three estimates ranging from a low of $31.00 to a high of $43.00, with a standard deviation of $6.11, suggesting variability among analysts [2] - The lowest estimate indicates a 13.1% increase, while the highest suggests a 56.8% upside [2] Analyst Consensus and Earnings Estimates - Analysts are increasingly optimistic about NTCT's earnings prospects, as indicated by a strong agreement in revising EPS estimates higher, which correlates with potential stock price movements [4][11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 0.9%, with one estimate moving higher and no negative revisions [12] Zacks Rank - NTCT holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, indicating a strong potential for upside [13] Price Movement Guidance - While the consensus price target may not be a reliable indicator of the extent of NTCT's gains, it does provide a good guide for the direction of price movement [14]

Core Insights - The article emphasizes the author's background in finance and engineering, highlighting a focus on tech, infrastructure, and internet services, with an interest in companies that exhibit strong fundamentals and growth potential [1]. Group 1 - The author holds FMVA® and BIDA® certifications, indicating a strong foundation in financial analysis and data interpretation [1]. - The narrative suggests a commitment to long-term investment strategies rather than short-term market fluctuations, appealing to investors who prioritize sustainable returns [1]. - The content aims to foster engagement and discussion among investors, featuring analytical breakdowns and investment ideas [1].

Financial Performance - Total revenue increased by $40.1 million, or 11%, for the six months ended September 30, 2025, compared to the same period in 2024[131]. - Net income for the six months ended September 30, 2025, was $22.1 million, a significant improvement from a net loss of $434.3 million in the same period of 2024[133]. - Non-GAAP net income for the six months ended September 30, 2025, was $69.8 million, compared to $54.1 million for the same period in 2024[140]. - Total revenue for the three months ended September 30, 2025, was $219.0 million, representing a 15% increase from $191.1 million in the same period of 2024[144]. - Total revenue for the six months ended September 30, 2025, was $405.8 million, an increase of 11% or $40.1 million compared to $365.7 million in the same period of 2024[166]. Revenue Breakdown - Product revenue increased by 17% to $94.7 million, while service revenue rose by 13% to $124.3 million compared to the previous year[144][145]. - Product revenue increased by 18% or $25.5 million to $167.7 million, driven by service assurance offerings and cybersecurity offerings[166]. - Service revenue grew by 7% or $14.6 million to $238.1 million, primarily due to maintenance contracts and cloud services[167]. - Revenue from the United States grew by 18% to $131.2 million, accounting for 60% of total revenue, driven by service assurance offerings[147][150]. - Service assurance revenue increased by 10% or $24.0 million to $262.4 million, while cybersecurity revenue rose by 13% or $16.1 million to $143.4 million[169]. Profitability Metrics - Gross profit percentage rose by 3 percentage points to 79% during the six months ended September 30, 2025, due to increased product and service revenue growth[132]. - The gross profit for the six months ended September 30, 2025, was $318.7 million, up from $279.2 million in the same period of 2024[140]. - Gross profit for the three months ended September 30, 2025, was $175.4 million, an 18% increase from $149.1 million in 2024, with a gross profit margin of 80%[152]. - The gross profit margin improved to 79% for the six months ended September 30, 2025, compared to 76% in the same period of 2024[171]. Expenses and Charges - Research and development expenses increased by 12% to $40.3 million, primarily due to higher employee-related variable incentive compensation[154][156]. - Total operating expenses rose by 6% to $142.9 million, representing 65% of total revenue[154]. - The company recorded restructuring charges of $0.3 million in the current period, significantly lower than $2.4 million in the same period last year[160]. - Total operating expenses decreased by 60% to $292.8 million, down from $728.4 million, primarily due to a significant goodwill impairment charge in the prior year[173]. Cash and Liquidity - Cash, cash equivalents, marketable securities, and investments totaled $526.9 million as of September 30, 2025, an increase of $34.4 million from $492.5 million at March 31, 2025[134]. - Net cash provided by operating activities for the six months ended September 30, 2025, was $80.2 million, a significant increase from $34.7 million in the same period of 2024[186]. - Cash used in investing activities was $12.6 million for the six months ended September 30, 2025, compared to cash provided of $0.9 million in the same period of 2024[187]. - Cash used in financing activities decreased to $46.8 million during the six months ended September 30, 2025, from $63.8 million in the same period of 2024[189]. - The company believes it has adequate liquidity to meet anticipated funding requirements for at least the next twelve months, supported by cash flows from operating activities and available cash balances[206]. Strategic Initiatives - The company ceased business operations in Russia in response to the war in Ukraine, impacting its operational strategy[128]. - The company is focused on driving product innovation and returning to annual revenue growth amid ongoing macroeconomic uncertainty[128]. - The company plans to continue investing in capital expenditures to support infrastructure through the remainder of fiscal year 2026[188]. Tax and Other Financial Metrics - The effective tax rate for the three months ended September 30, 2025, was 17.7%, down from 26.8% in the same period of 2024[163]. - The effective tax rate for the six months ended September 30, 2025, was 22.4%, compared to 1.6% for the same period in 2024, reflecting a change primarily due to sales mix and non-deductible expenses[179]. - Interest and other expense, net, decreased by 39% to $(1.8) million, attributed to a reduction in interest expense and an increase in interest income[162]. - Interest and other income (expense), net, decreased by 66% or $5.2 million to $2.6 million, mainly due to a decline in the fair value of an equity investment[178]. Market and Risk Factors - The company is not currently exposed to market risks related to interest rate fluctuations as it had no debt as of September 30, 2025[211]. - The company engages in foreign currency hedging to limit exposure to movements in exchange rates, primarily for expenses denominated in foreign currencies[212]. - Macroeconomic factors such as high inflation and interest rates could increase funding requirements or complicate access to capital[207].

Core Insights - NetScout Systems (NTCT) reported quarterly earnings of $0.62 per share, exceeding the Zacks Consensus Estimate of $0.45 per share, and up from $0.47 per share a year ago [1] - The earnings surprise was +37.78%, with the company having surpassed consensus EPS estimates three times in the last four quarters [2] - The company generated revenues of $219.02 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 9.43% and increasing from $191.11 million year-over-year [3] Financial Performance - NetScout's earnings surprise of +37.78% indicates strong performance relative to expectations [2] - The company has consistently exceeded revenue estimates, achieving this four times over the last four quarters [3] - Year-to-date, NetScout shares have increased by approximately 26.1%, outperforming the S&P 500's gain of 15.6% [4] Future Outlook - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $0.88 for the upcoming quarter and $2.35 for the current fiscal year [8] - The Zacks Rank for NetScout is currently 3 (Hold), suggesting expected performance in line with the market in the near future [7] - The Computer - Networking industry, to which NetScout belongs, is currently ranked in the bottom 37% of Zacks industries, which may impact stock performance [9] Industry Context - The performance of NetScout's stock may be influenced by the overall outlook for the Computer - Networking industry [9] - Another company in the same industry, Digi International (DGII), is expected to report quarterly earnings soon, with estimates indicating a slight year-over-year decline [10][11]

Q2 FY'26 Financial Results Conference Call PERIOD ENDED September 30, 2025 Published November 6, 2025 COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 1 Agenda 01 02 03 04 Introduction Scott Dressel, Assistant Vice President Corporate Finance CEO Perspective Anil Singhal, President & Chief Executive Officer (CEO) CFO Financial Review Tony Piazza, Executive Vice President & Chief Financial Officer (CFO) Question & Answer Session COPYRIGHT © 2025 NETSCOUT SYSTEMS, INC. | 2 Forward-Looking Statements Forward Looking ...