NetScout Systems Earnings Preview

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After beating estimates last quarter by $0.02, NetScout Systems (NAS: NTCT) has set the standard for itself. The company will unveil its latest earnings on Thursday, April 26. NetScout Systems designs, develops, manufactures, markets, sells, and supports unified service delivery management, service assurance and application, and network performance management solutions.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on NetScout Systems with seven of 10 analysts rating it hold. Analysts don't like NetScout Systems as much as competitor Dialogic overall. Two out of two analysts rate Dialogic a buy compared to three of 10 for NetScout Systems. That rating hasn't budged in three months as analysts have remained steady in their opinion of the stock.
  • Revenue Forecasts: On average, analysts predict $87.5 million in revenue this quarter. That would represent a rise of 12.2% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.34 per share. Estimates range from $0.29 to $0.36.

What our community says:
CAPS All-Stars are strongly supporting the stock, with 90.9% granting it an "outperform" rating. The community at large concurs with the All-Stars, with 91.8% giving it a rating of "outperform." Even with a robust four out of five stars, NetScout Systems' CAPS rating falls a little short of the community's upbeat outlook.


Management:
NetScout Systems' income has fallen year-over-year by an average of 9.5% over the past five quarters. The company's revenue has now risen for two straight quarters.

Now let's get some insight into how efficient management is at running the business. Margins are a representation of how efficiently a company captures portions of sales dollars. NetScout Systems has seen slipping net margins year-over-year for the last three quarters. Net margins reflect what percentage of each dollar earned by the company becomes profit. See how NetScout Systems has been doing for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

79.3%

78.6%

78.0%

79.0%

Operating Margin

20.9%

15.8%

6.8%

21.7%

Net Margin

12.0%

9.7%

3.8%

13.8%

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