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When Should You Buy NetScout Systems, Inc. (NASDAQ:NTCT)?

Cole Patterson

NetScout Systems, Inc. (NASDAQ:NTCT), which is in the communications business, and is based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at NetScout Systems’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for NetScout Systems

What’s the opportunity in NetScout Systems?

Great news for investors – NetScout Systems is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $36.52, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that NetScout Systems’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will NetScout Systems generate?

NASDAQGS:NTCT Future Profit January 24th 19

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to more than double over the next couple of years, the future seems bright for NetScout Systems. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? Since NTCT is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on NTCT for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy NTCT. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on NetScout Systems. You can find everything you need to know about NetScout Systems in the latest infographic research report. If you are no longer interested in NetScout Systems, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.