NetScout Systems (NTCT) has drawn investor attention after its latest quarterly update, which showed year over year net income and earnings per share growth, alongside raised earnings guidance for fiscal 2026 and improving analyst sentiment.

Following the earnings beat and higher fiscal 2026 guidance, NetScout Systems' recent 30 day share price return of 1.97% contrasts with a softer 90 day share price return of 2.70%. At the same time, the 1 year total shareholder return of 11.05% points to steadier long term progress despite mixed shorter term momentum.

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With earnings guidance nudged higher, a value score of 4, the shares trading around 11% below the average analyst target, and an indicated intrinsic discount of roughly 44%, is NetScout still overlooked or already pricing in future growth?

Most Popular Narrative: 11.7% Undervalued

With NetScout Systems closing at $27.44 versus a widely followed fair value estimate of $31.09, the current setup centers on how much weight to place on its earnings and cash flow profile under a discount rate of 8.08%.

The company is successfully diversifying its customer base, with no single customer accounting for more than 10% of revenue, and a healthy split between U.S. (54%) and international markets (46%), which reduces revenue volatility risk and supports a more predictable top-line trajectory. NetScout is generating robust free cash flow ($71.7 million in Q1), has a strong liquidity position (over $540 million in cash and investments, no debt), and is actively repurchasing shares. All of these factors can support further investment in R&D, accretive acquisitions, or additional share buybacks, positively impacting earnings per share and shareholder value.

Curious how a relatively modest growth outlook, a double digit profit margin assumption, and a richer future earnings multiple combine to support that fair value gap? The most followed narrative ties all three together in a way that is not obvious from headline numbers. If you want to see which earnings path and valuation re rating this view builds in, the full story is where those pieces finally click.

Result: Fair Value of $31.09 (UNDERVALUED)

However, that gap relies heavily on continued AI and cloud traction, while competition, pricing pressure, and IT stack consolidation could still upset the earnings and multiple story.

Build Your Own NetScout Systems Narrative

If you see the numbers differently or simply prefer walking through the data yourself, you can build a custom view in a few minutes using Do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding NetScout Systems.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.