NTCT
NetScout Systems, Inc.
$43.14
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 25.6% above fair value
You pay
$43.14
Bear
$28.77
Fair
$34.36
Bull
$39.95
Bear
$28.77
-33.3%
$1.54 × 18x P/E
Fair
$34.36
-20.4%
$1.54 × 22x P/E
Bull
$39.95
-7.4%
$1.54 × 25x P/E
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
28.0x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $38.00 from 21 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $34.36 per share.
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