In This Article:
Investors in NetScout Systems, Inc. (NASDAQ:NTCT) had a good week, as its shares rose 2.2% to close at US$21.61 following the release of its yearly results. Revenues came in at US$823m, in line with forecasts and the company reported a statutory loss of US$5.12 per share, roughly in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
We check all companies for important risks. See what we found for NetScout Systems in our free report.
Taking into account the latest results, NetScout Systems' dual analysts currently expect revenues in 2026 to be US$836.7m, approximately in line with the last 12 months. Earnings are expected to improve, with NetScout Systems forecast to report a statutory profit of US$0.73 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$824.8m and losses of US$2.73 per share in 2026. While there's been no material change to the revenue estimates, there's been a pretty clear upgrade to earnings estimates, with the analysts expecting a per-share profit compared to previous expectations of a loss. So it seems like the latest results have led to a significant increase in sentiment for NetScout Systems.
View our latest analysis for NetScout Systems
The consensus price target fell 8.3% to US$22.23, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2026. That would be a definite improvement, given that the past five years have seen revenue shrink 1.2% annually. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 7.3% annually. Although NetScout Systems' revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that there's been a clear step-change in belief around the business' prospects, with the analysts now expecting NetScout Systems to become profitable next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of NetScout Systems' future valuation.