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Assessing Netskope (NTSK) Valuation As Shares Struggle And Losses Contrast With Rich Sales Multiple

Simply Wall St · 6d ago

Netskope stock reacts as investors weigh losses against growth profile

Netskope (NTSK) is drawing attention after recent trading, with the share price at $16.90 and short term returns under pressure. The stock has declined 18.5% over the past month and 23.3% over the past 3 months.

See our latest analysis for Netskope.

The recent pressure on Netskope’s share price, including a 7 day share price return of 7% decline and a 90 day share price return of 23.3% decline, points to fading short term momentum even as investors reassess its growth profile and risk.

If you are comparing Netskope with other cybersecurity and cloud names, this could be a good moment to scan high growth tech and AI stocks as potential alternatives or complements in your research list.

With Netskope trading at $16.90 against an analyst price target of $27.29, the stock sits at a steep discount. Is the market overlooking its profile, or already accounting for future growth risks and execution hurdles?

Price-to-Sales of 10.1x: Is it justified?

Netskope trades on a P/S of 10.1x at a last close of $16.90, which screens as expensive versus both software peers and the wider US software industry.

The P/S ratio compares the company’s market value to its revenue. It is often used for high growth software and cybersecurity names that are still loss making.

For Netskope, a 10.1x P/S suggests the market is attaching a rich value to its US$661.2m of revenue while the company remains unprofitable. Investors are effectively paying up for its revenue growth profile rather than current earnings. In that context, the company’s current losses and forecasts that it remains unprofitable over the next 3 years mean a lot of expectation is embedded in that multiple.

The tension is that Netskope’s 10.1x P/S sits well above both the US software industry average of 4.7x and a peer average of 7.9x. This represents a strong valuation premium for a business that is still posting net losses and has a very weak return on equity.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-sales of 10.1x (OVERVALUED)

However, the scale of Netskope’s US$699.656m net loss and its very weak return on equity, together with rich revenue multiples, could quickly cool sentiment if growth expectations reset.

Find out about the key risks to this Netskope narrative.

Another view: DCF points in the opposite direction

While the 10.1x P/S ratio paints Netskope as expensive versus peers, our DCF model presents a different view. With the shares at $16.90 and an estimated fair value of $6.96, the stock appears overvalued on this cash flow based view. Which signal do you consider more informative, growth-driven sales or longer term cash flows?

Look into how the SWS DCF model arrives at its fair value.

NTSK Discounted Cash Flow as at Jan 2026
NTSK Discounted Cash Flow as at Jan 2026

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Netskope for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 870 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Netskope Narrative

If you see Netskope differently or want to stress test the assumptions yourself, you can create your own narrative in just a few minutes: Do it your way.

A great starting point for your Netskope research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

If Netskope is on your radar, do not stop there. Cast a wider net with focused stock lists that can quickly surface ideas aligned with your style.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.