NetScout Systems (NASDAQ:NTCT – Get Free Report) and Extreme Networks (NASDAQ:EXTR – Get Free Report) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, dividends, risk, profitability, institutional ownership and earnings.
Analyst Recommendations
This is a summary of current ratings and recommmendations for NetScout Systems and Extreme Networks, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| NetScout Systems | 0 | 1 | 0 | 1 | 3.00 |
| Extreme Networks | 0 | 1 | 5 | 0 | 2.83 |
NetScout Systems currently has a consensus price target of $29.00, suggesting a potential upside of 15.03%. Extreme Networks has a consensus price target of $22.92, suggesting a potential upside of 1.72%. Given NetScout Systems’ stronger consensus rating and higher possible upside, equities analysts plainly believe NetScout Systems is more favorable than Extreme Networks.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| NetScout Systems | $822.68 million | 2.20 | -$366.92 million | $1.00 | 25.21 |
| Extreme Networks | $1.14 billion | 2.63 | -$7.47 million | ($0.05) | -450.60 |
Extreme Networks has higher revenue and earnings than NetScout Systems. Extreme Networks is trading at a lower price-to-earnings ratio than NetScout Systems, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
NetScout Systems has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, Extreme Networks has a beta of 1.84, suggesting that its stock price is 84% more volatile than the S&P 500.
Insider & Institutional Ownership
91.6% of NetScout Systems shares are owned by institutional investors. Comparatively, 91.1% of Extreme Networks shares are owned by institutional investors. 3.8% of NetScout Systems shares are owned by insiders. Comparatively, 3.7% of Extreme Networks shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares NetScout Systems and Extreme Networks’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| NetScout Systems | 8.72% | 7.47% | 5.30% |
| Extreme Networks | -0.65% | 82.47% | 4.18% |
Summary
NetScout Systems beats Extreme Networks on 9 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 Extreme Networks
Extreme Networks, Inc. delivers cloud-driven networking solutions that leverage the powers of machine learning, artificial intelligence, analytics, and automation.
The company designs, develops, and manufactures wired and wireless network infrastructure equipment and develops the software for network management, policy, analytics, security, and access controls. Over 50,000 customers globally trust their end-to-end, cloud-driven networking solutions and rely on our top-rated services and support to accelerate their digital transformation efforts.
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