NTCT
NetScout Systems, Inc.
$38.83
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 38.9% above fair value
You pay
$38.83
Bear
$23.40
Fair
$27.95
Bull
$32.50
Bear
$23.40
-39.7%
$1.30 × 18x P/E
Fair
$27.95
-28.0%
$1.30 × 22x P/E
Bull
$32.50
-16.3%
$1.30 × 25x P/E
Adjust Assumptions
21.5x
1.3$
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
29.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (21 analysts)
$43.00
Divergence from AlphaVal
35%
Summary
Applying a 22x P/E to adjusted EPS of $1.30, the base-case value is $27.95 per share.
Warnings
Wall Street's average price target is $43.00 (from 21 analysts). Our estimate is 35% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples