NetScout Systems, Inc. (NTCT) Soars to 52-Week High, Time to Cash Out?

A strong stock as of late has been NetScout Systems (NTCT). Shares have been marching higher, with the stock up 23.3% over the past month. The stock hit a new 52-week high of $41.87 in the previous session. NetScout has gained 51.6% since the start of the year compared to the 17.5% move for the Zacks Computer and Technology sector and the 55.9% return for the Zacks Computer - Networking industry.

What's Driving the Outperformance?

The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 7, 2026, NetScout reported EPS of $0.52 versus consensus estimate of $0.46.

For the current fiscal year, NetScout is expected to post earnings of $2.71 per share on $903.4 in revenues. This represents a 9.27% change in EPS on a 5.11% change in revenues. For the next fiscal year, the company is expected to earn $2.85 per share on $943.09 in revenues. This represents a year-over-year change of 4.98% and 4.39%, respectively.

Valuation Metrics

NetScout may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

NetScout has a Value Score of C. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 15.1X current fiscal year EPS estimates, which is not in-line with the peer industry average of 25.6X. On a trailing cash flow basis, the stock currently trades at 15.5X versus its peer group's average of 21.5X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to consider the stock's Zacks Rank, as this is even more important than the company's VGM Score. Fortunately, NetScout currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if NetScout passes the test. Thus, it seems as though NetScout shares could still be poised for more gains ahead.

How Does NTCT Stack Up to the Competition?

Shares of NTCT have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Digi International Inc. (DGII). DGII has a Zacks Rank of #2 (Buy) and a Value Score of D, a Growth Score of A, and a Momentum Score of B.

Earnings were strong last quarter. Digi International Inc. beat our consensus estimate by 6.90%, and for the current fiscal year, DGII is expected to post earnings of $2.48 per share on revenue of $521.62 million.

Shares of Digi International Inc. have gained 16.8% over the past month, and currently trade at a forward P/E of 26.68X and a P/CF of 24.36X.

The Computer - Networking industry is in the top 18% of all the industries we have in our universe, so it looks like there are some nice tailwinds for NTCT and DGII, even beyond their own solid fundamental situation.

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This article originally published on Zacks Investment Research (zacks.com).

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