Strength Seen in NetScout (NTCT): Can Its 9.1% Jump Turn into More Strength?
NetScout Systems NTCT shares soared 9.1% in the last trading session to close at $23.73. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 3.8% gain over the past four weeks.
The increase in share price can be attributed to strength in the cybersecurity business. The company is focused on advancing several technology initiatives, including Dynamic DDoS and Mobile DDoS security as well as Omnis Cybersecurity solutions. The company expects acceleration in 5G adoption to boost demand for its visibility and cybersecurity solutions. Extensive cost-cutting efforts to manage discretionary spending bodes well.
The company reported better-than-expected third quarter fiscal 2024 revenues driven by timing of customer budget spending. For fiscal 2024, the company now expects revenues (GAAP and Non-GAAP) to be $840 million.
This provider of products that gauge network performance is expected to post quarterly earnings of $0.54 per share in its upcoming report, which represents a year-over-year change of +42.1%. Revenues are expected to be $215.07 million, up 3.4% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For NetScout, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on NTCT going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
NetScout is a member of the Zacks Computer - Networking industry. One other stock in the same industry, Extreme Networks EXTR, finished the last trading session 0.5% higher at $11.91. EXTR has returned -5.8% over the past month.
Extreme Networks' consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.17. Compared to the company's year-ago EPS, this represents a change of -158.6%. Extreme Networks currently boasts a Zacks Rank of #4 (Sell).
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