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NetScout (NTCT) Moves 9.4% Higher: Will This Strength Last?

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NetScout Systems (NTCT - Free Report) shares rallied 9.4% in the last trading session to close at $33.60. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 6.2% loss over the past four weeks.

The increase in share price can be attributed to continued strength in the company’s  service assurance and security business lines amid several macro headwinds. In the last reported quarter, security revenue was up 7% while service assurance revenue increased 11%, on  a year over year basis.

The company’s product portfolio is witnessing healthy traction especially the new solutions like Omnis platform. Increasing 5G-related orders from Tier 1 domestic and international carriers is acting as a tailwind. For fiscal 2023, the company expects revenues to be between $895 million and $925 million.

This provider of products that gauge network performance is expected to post quarterly earnings of $0.49 per share in its upcoming report, which represents a year-over-year change of +4.3%. Revenues are expected to be $222.43 million, up 5% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For NetScout, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on NTCT going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

NetScout belongs to the Zacks Computer - Networking industry. Another stock from the same industry, Extreme Networks (EXTR - Free Report) , closed the last trading session 0.1% lower at $14.20. Over the past month, EXTR has returned 3.6%.

Extreme Networks' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.18. Compared to the company's year-ago EPS, this represents a change of -14.3%. Extreme Networks currently boasts a Zacks Rank of #2 (Buy).


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