NetScout Systems is due to report fiscal second-quarter earnings before the market opens Thursday. Investors will be watching whether the network monitoring company can extend the cybersecurity momentum behind its stronger-than-expected results last quarter.
Analysts expect earnings of $0.69 per share on revenue of $221.6 million for the quarter ended in September. Those figures would be up 12% and 1%, respectively, from a year earlier. Compared with the previous quarter, the forecasts imply a 33% rise in earnings per share from $0.52 and a 5% increase in revenue from $210.4 million.
Analyst ratings currently average Buy, with a mean price target of $46.50, about 23% above the stock’s recent close of $37.93. Earnings and revenue estimates have remained unchanged over the past two months.
In August, NetScout reported quarterly earnings of $0.52 per share, beating the $0.38 estimate by 37%. Revenue of $210.4 million also exceeded forecasts by more than 7%. The shares have gained 50% over the past year.
Cybersecurity performance is a key focus for the upcoming report. NetScout has benefited from businesses prioritizing protection against cyber threats, including distributed denial-of-service attacks. The company recently upgraded its Arbor Edge Defense and Adaptive DDoS Protection products; investors will be looking for evidence that the changes are supporting bookings growth.
Margins are another area to watch. NetScout has reported a gross margin of 79.8%, while operating income rose 39% over the past year. Investors will be attentive to management’s comments on maintaining profitability while investing in new capabilities as the network monitoring industry evolves.
The expected sequential increase in earnings also puts the company’s outlook under scrutiny. NetScout’s guidance has been conservative in recent quarters, and investors will want to know whether the latest expectations leave room for another improvement or have caught up with likely results.
The source report says NetScout has a market capitalization of $2.8 billion and trades at 13.5 times forward earnings, against projected earnings-per-share growth of 117%. It also notes that the company’s patent portfolio has reached 750 innovations. Thursday’s results will offer investors an update on whether its cybersecurity business can support continued earnings growth.
Sources: Investing.com News.