This firm currently holds 418.14
M in liabilities with Debt to Equity (D/E) ratio of 0.21, which may suggest Netscout Systems is not taking enough advantage from borrowing. The company has a current ratio of 1.85, which is within standard range for the sector.
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Netscout Systems has an asset utilization ratio of 614.95 percent. This implies that the company is making $6.15 for each dollar of assets. An increasing asset utilization means that Netscout Systems is more efficient with each dollar of assets it utilizes for everyday operations.
NetScout Systems financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of NetScout Systems, including all of NetScout Systems's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of NetScout Systems assets, the company is considered highly leveraged. Understanding the
composition and structure of overall NetScout Systems debt and outstanding corporate bonds gives a good idea of
how risky the capital structure of a business is and if it is worth investing in it. Please read more on our
technical analysis page.
Understanding NetScout Total Liabilities
NetScout Systems liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. NetScout Systems has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on NetScout Systems balance sheet include debt obligations and money owed to different NetScout Systems vendors, workers, and loan providers. Below is the chart of NetScout short long-term liabilities accounts currently reported on its balance sheet.
You can use NetScout Systems
financial leverage analysis tool to get a better grip on understanding its financial position
How important is NetScout Systems's Liquidity
NetScout Systems
financial leverage refers to using borrowed capital as a funding source to finance NetScout Systems ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. NetScout Systems financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to NetScout Systems' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of NetScout Systems' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between NetScout Systems's total debt and its cash.
Is NetScout Systems valued wisely by the market?
Netscout Systems reported the previous year's revenue of 844.32
M. Net Income was 37.01
M with profit before overhead, payroll, taxes, and interest of 609.18
M.
Asset Breakdown
| Total Assets | 2.28 Billion |
| Current Assets | 558.94 Million |
| Assets Non Current | 2.34 Billion |
| Goodwill | 2.2 Billion |
| Tax Assets | 27.17 Million |
Another setback for Netscout Systems private investors
Newest sortino ratio is at 0.13. Netscout Systems has relatively low volatility with skewness of 2.66 and kurtosis of 13.6. However, we advise all investors to independently investigate Netscout Systems to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Netscout Systems' stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Netscout Systems' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
Netscout Systems Implied Volatility
Netscout Systems' implied volatility exposes the market's sentiment of Netscout Systems stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Netscout Systems' implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Netscout Systems stock will not fluctuate a lot when Netscout Systems' options are near their expiration.
Our Final Take On Netscout Systems
Whereas few other entities within the software—infrastructure industry are still a little expensive, even after the recent corrections, Netscout Systems may offer a potential longer-term growth to private investors. The bottom line, as of the 27th of January 2022, our current 90 days buy vs. sell advice on the firm is
Strong Buy. We believe Netscout Systems is
undervalued with
very low probability of bankruptcy for the next two years.
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Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of NetScout Systems. Please refer to our
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