NEW YORK ( TheStreet) -- NetScout Systems (Nasdaq: NTCT) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- NTCT's revenue growth has slightly outpaced the industry average of 0.4%. Since the same quarter one year prior, revenues slightly increased by 9.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Although NTCT's debt-to-equity ratio of 0.19 is very low, it is currently higher than that of the industry average. To add to this, NTCT has a quick ratio of 1.78, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 83.76% to $25.96 million when compared to the same quarter last year. In addition, NETSCOUT SYSTEMS INC has also vastly surpassed the industry average cash flow growth rate of 23.75%.
- The gross profit margin for NETSCOUT SYSTEMS INC is currently very high, coming in at 83.70%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, NTCT's net profit margin of 12.00% significantly trails the industry average.
-- Written by a member of TheStreet RatingsStaff