Head-To-Head Survey: Harmonic (NASDAQ:HLIT) versus NetScout Systems (NASDAQ:NTCT)

NetScout Systems (NASDAQ:NTCT) and Harmonic (NASDAQ:HLIT) are both technology companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, profitability, earnings, dividends, valuation, risk and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and price targets for NetScout Systems and Harmonic, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NetScout Systems	0	3	0	1	2.50
Harmonic	1	3	2	0	2.17

NetScout Systems presently has a consensus target price of $35.50, suggesting a potential downside of 7.65%. Harmonic has a consensus target price of $16.60, suggesting a potential upside of 40.20%. Given Harmonic’s higher possible upside, analysts clearly believe Harmonic is more favorable than NetScout Systems.

Insider and Institutional Ownership

91.6% of NetScout Systems shares are held by institutional investors. Comparatively, 99.4% of Harmonic shares are held by institutional investors. 4.7% of NetScout Systems shares are held by company insiders. Comparatively, 1.7% of Harmonic shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares NetScout Systems and Harmonic’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%
Harmonic	-7.50%	7.84%	4.30%

Earnings and Valuation

This table compares NetScout Systems and Harmonic”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NetScout Systems	$859.48 million	3.25	$95.53 million	$1.30	29.57
Harmonic	$570.80 million	2.25	-$43.31 million	($0.37)	-32.00

NetScout Systems has higher revenue and earnings than Harmonic. Harmonic 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 & Volatility

NetScout Systems has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500. Comparatively, Harmonic has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500.

Summary

NetScout Systems beats Harmonic on 11 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 Harmonic

Harmonic Inc., together with its subsidiaries, provides broadband solutions worldwide. The company operates through Broadband and Video segments. The Broadband segment sells broadband access solutions and related services, including cOS software-based broadband access solutions to broadband operators; and cOS central cloud services, a subscription service for cOS customers. The Video segment sells video processing, production, and playout solutions and services to cable operators, and satellite and telco Pay-TV service providers, as well as to broadcast and media, including streaming media companies. Its video processing appliance solutions include network management and application software, and hardware products, such as encoders, video servers, high-density stream processing systems, and edge processors. This segment also provides VOS360 SaaS platform that provides both streaming and channel origination and distribution services; and software-as-a-service (SaaS) solutions, which enables the packaging and delivery of streaming services, including live streaming, VOD, catch-up TV, start-over TV, network-DVR and cloud-DVR services through HTTP streaming to various device along with dynamic and personal ad insertion. The company also provides technical support and professional services, such as maintenance and support, consulting, implementation, integration services, program management, technical design and planning, building and site preparation, integration and equipment installation, end-to-end system testing, and training, as well as SaaS-related support and deployment. It sells its products through its direct sales force, as well as through independent resellers and systems integrators. The company was incorporated in 1988 and is headquartered in San Jose, California.