Financial Review: NetScout Systems (NASDAQ:NTCT) vs. ADTRAN (NASDAQ:ADTN)

NetScout Systems (NASDAQ:NTCT) and ADTRAN (NASDAQ:ADTN) are both technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, dividends, risk, valuation, earnings and institutional ownership.

Volatility and Risk

NetScout Systems has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500. Comparatively, ADTRAN has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for NetScout Systems and ADTRAN, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NetScout Systems	0	2	0	1	2.67
ADTRAN	2	1	4	0	2.29

NetScout Systems currently has a consensus price target of $38.00, indicating a potential downside of 2.71%. ADTRAN has a consensus price target of $14.67, indicating a potential upside of 89.98%. Given ADTRAN’s higher probable upside, analysts clearly believe ADTRAN is more favorable than NetScout Systems.

Earnings & Valuation

This table compares NetScout Systems and ADTRAN”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NetScout Systems	$859.48 million	3.30	$95.53 million	$1.64	23.82
ADTRAN	$1.08 billion	0.58	-$45.66 million	($0.28)	-27.57

NetScout Systems has higher earnings, but lower revenue than ADTRAN. ADTRAN is trading at a lower price-to-earnings ratio than NetScout Systems, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

91.6% of NetScout Systems shares are owned by institutional investors. Comparatively, 80.6% of ADTRAN shares are owned by institutional investors. 4.7% of NetScout Systems shares are owned by company insiders. Comparatively, 2.2% of ADTRAN shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares NetScout Systems and ADTRAN’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NetScout Systems	13.71%	9.25%	6.59%
ADTRAN	-2.29%	14.24%	1.66%

Summary

NetScout Systems beats ADTRAN on 10 of the 15 factors compared between the two stocks.

About NetScout Systems

NetScout Systems, Inc. provides service assurance and cybersecurity solutions for protect digital business services against disruptions in the United States, Europe, Asia, and internationally. The company offers nGeniusONE management software that enables customers to predict, preempt, and resolve network and service delivery problems, as well as facilitate the optimization and capacity planning of their network infrastructures; and specialized platforms and analytic modules that enable its customers to analyze and troubleshoot traffic in radio access and Wi-Fi networks. It also provides nGeniusPULSE, an active testing tool that enables enterprises to identify infrastructure performance issues and determine application availability, reliability, and performance; and nGenius Business Analytics solution, which enables service providers to analyze their network traffic. In addition, the company offers ISNG, an advanced passive network probe; packet flow systems that deliver targeted network traffic access to various monitoring and security tools and systems; and a suite of test access points that enable non-disruptive access to network traffic. Further, it provides cybersecurity solutions to protect their networks against distributed denial of service attacks under the Arbor brand, such as Arbor Sightline, Arbor Threat Mitigation System, Arbor Insight, Arbor Edge Defense, and Arbor Cloud. Additionally, the company offers advanced threat detection solutions, such as Omnis Cyber Investigator. It serves enterprise customers in various industries, including financial services, technology, manufacturing, healthcare, utilities, education, transportation, and retail; mobile operators, wireline operators, cable operators, Internet service providers, and cloud providers; and governmental agencies through a direct sales force, and indirect reseller and distribution channels. The company was incorporated in 1984 and is headquartered in Westford, Massachusetts.

About ADTRAN

ADTRAN Holdings, Inc., through its subsidiaries, provides networking and communications platforms, software, systems, and services in the United States, Germany, the United Kingdom, and internationally. It operates through two segments, Network Solutions, and Services & Support. It offers residential gateways; ethernet passive optical network ONUs; gigabit passive optical network/XGS-PON ONTs; traditional SSE, routers, and switches; edge cloud; carrier ethernet network interface devices; Optical Line Terminals; Packet Aggregation, Copper Access, and Oscilloquartz; optical transport and engine solutions; infrastructure monitoring solution; and training, professional, software, and managed services. The company also provides various software, such as Mosaic One SaaS, n-Command, Procloud, MCP, AOE and ACI-E, and Ensemble Controller. It serves large, medium, and small service providers; alternative service providers, such as utilities, municipalities and fiber overbuilders; cable/MSOs; and SMBs and distributed enterprises. ADTRAN Holdings, Inc. was incorporated in 1985 and is headquartered in Huntsville, Alabama.