Value
1.6/10data confidence 50%| Component | Sub-score |
|---|---|
| P/S | 1.0 |
| PEG | 1.0 |
| Analyst target | 3.0 |
- ▸PEG: 9.38
- ▸Expensive valuation
NTSK · Why this verdict
Why Netskope (NTSK) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.5/10
ConfidenceHIGH
MacroRISK_OFF
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Quarterly revenue reached about $220.5M versus about $170.8M a year earlier, roughly 29% YoY growth, with next-quarter consensus near $228M. Growth breakdown | Revenue growth stays near or above 25% YoY across the next four quarters. | →Stable |
| CounterGrowth of 29% is decelerating from earlier quarters' pace off a larger base, and the growth score carries only 0.67 confidence, so a slowdown would hit a richly valued stock hard. | ||
The company is FCF-positive despite a GAAP loss, with a 35% FCF margin, 2.9% FCF yield and a Rule of 40 reading of 65 (elite). Quality breakdown | FCF margin stays above 25% and the Rule of 40 reading stays above 50 over 12 months. | →Stable |
| CounterGAAP operating and net margins score 0.0, so FCF strength may rely on non-cash compensation or working-capital timing rather than durable profitability. | ||
Netskope has beaten EPS estimates in all four reported quarters with an average surprise of 40.5%, narrowing losses from -$0.10 to -$0.03 per share. Earnings | Quarterly EPS keeps beating consensus while the loss per share continues to narrow toward breakeven. | ↑Improving |
| CounterSurprise percentages on tiny negative EPS bases are inflated, and the company has only a short public reporting history. | ||
At $24.28 the stock is above the $17.42 analyst target (upside of -28.2%), and PEG of 8.59 signals an expensive valuation. Upside pct | Either analysts raise targets toward the current price as growth continues, or the stock consolidates until valuation normalizes. | ↓Deteriorating |
| CounterAnalyst ratings score 8.87 and growth is strong, so targets may simply lag a re-rating that the market continues to reward. | ||
Momentum is strong, with rising OBV, price above the 200-day moving average and a momentum score of 7.7, though RSI of 74 is overbought and the price is near its 52-week high. Momentum breakdown | Price holds above the 200-day moving average and above the $22.58 stop level through the next two quarters. | ↑Improving |
| CounterOverbought RSI of 74 and implied volatility of 77% make a sharp pullback likely, especially with price far above the analyst target. | ||
Quarterly revenue reached about $220.5M versus about $170.8M a year earlier, roughly 29% YoY growth, with next-quarter consensus near $228M.
→StableGrowth breakdown
- Expectation
- Revenue growth stays near or above 25% YoY across the next four quarters.
CounterGrowth of 29% is decelerating from earlier quarters' pace off a larger base, and the growth score carries only 0.67 confidence, so a slowdown would hit a richly valued stock hard.
The company is FCF-positive despite a GAAP loss, with a 35% FCF margin, 2.9% FCF yield and a Rule of 40 reading of 65 (elite).
→StableQuality breakdown
- Expectation
- FCF margin stays above 25% and the Rule of 40 reading stays above 50 over 12 months.
CounterGAAP operating and net margins score 0.0, so FCF strength may rely on non-cash compensation or working-capital timing rather than durable profitability.
Netskope has beaten EPS estimates in all four reported quarters with an average surprise of 40.5%, narrowing losses from -$0.10 to -$0.03 per share.
↑ImprovingEarnings
- Expectation
- Quarterly EPS keeps beating consensus while the loss per share continues to narrow toward breakeven.
CounterSurprise percentages on tiny negative EPS bases are inflated, and the company has only a short public reporting history.
At $24.28 the stock is above the $17.42 analyst target (upside of -28.2%), and PEG of 8.59 signals an expensive valuation.
↓DeterioratingUpside pct
- Expectation
- Either analysts raise targets toward the current price as growth continues, or the stock consolidates until valuation normalizes.
CounterAnalyst ratings score 8.87 and growth is strong, so targets may simply lag a re-rating that the market continues to reward.
Momentum is strong, with rising OBV, price above the 200-day moving average and a momentum score of 7.7, though RSI of 74 is overbought and the price is near its 52-week high.
↑ImprovingMomentum breakdown
- Expectation
- Price holds above the 200-day moving average and above the $22.58 stop level through the next two quarters.
CounterOverbought RSI of 74 and implied volatility of 77% make a sharp pullback likely, especially with price far above the analyst target.
Per-dimension breakdown
Quality
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 0.0 |
| Gross margin | 10.0 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 7.0 |
| FCF quality | 9.3 |
| Moat | 6.5 |
| Rule of 40 | 9.5 |
| Piotroski F | 5.6 |
- ▸FCF-positive despite GAAP loss (FCF margin 35%, FCF yield 2.6%)
- ▸Rule of 40: 65 (elite)
Growth
9.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 9.8 |
| EPS growth | 10.0 |
- ▸Strong growth: 29% YoY
Momentum
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.1 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 1.7 |
- ▸Overbought (RSI 78)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 8.9 |
| Price target | 1.7 |
| erm sentiment | 5.3 |
- ▸Below analyst target
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Negligible insider selling — $316,506 (0.003% of mkt cap)
- ▸Institutions accumulating
Peer rank
2.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.3 |
| quality rank | 0.0 |
| growth rank | 7.8 |
Technical
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.2 |
| 52w position | 9.9 |
Risk (lower is worse)
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.9 |
| days to cover | 8.5 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 0.0 |
| debt equity | 0.3 |
- ▸High IV: 80%
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:7.0>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:42d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-2.3=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-2.29
Upside
-34.3%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 2.7 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 9.9) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-2.3=NEGATIVE) reinforce the read. Current asymmetry R:R is -2.29 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 9.9, Catalyst at 7.5, and Insider at 7.3; the weakest are Value at 1.6, Peer rank at 2.3, and Technical at 3.4. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -2.29 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Rapid Revenue Growth
Trip ifRevenue growth falls below 20% YoY for 2 consecutive quarters.
- P2Elite Rule Of 40 Fcf
Trip ifFCF margin falls below 20% from current 35%.
- P3Perfect Earnings Beat Streak
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P4Price Well Above Analyst Target
Trip ifAnalyst target stays below $17.42 while the price rises above $30, more than 70% over target.
- P5Uptrend Momentum Overbought
Trip ifMomentum score falls below 5.0 from current 7.7.