Netskope (NASDAQ:NTSK) Shares Gap Up Following Better-Than-Expected Earnings

Key Points

• Netskope shares jumped: The stock opened at $15.51 versus a prior close of $13.75 after the company reported better-than-expected results.
• Quarterly performance exceeded expectations: Fiscal Q2 revenue reached approximately $220.5 million, up 29% year over year, while adjusted EPS came in at a $0.03 loss versus the expected $0.26 loss. Annual recurring revenue increased 27% to $899 million.
• Outlook and analyst sentiment improved: Netskope raised its fiscal 2027 revenue forecast above consensus and narrowed its expected loss, prompting several analysts to raise price targets. Despite the improved outlook, the company remains unprofitable, and insiders have sold more shares than they bought over the past three months.

Netskope Inc. (NASDAQ:NTSK - Get Free Report) gapped up before the market opened on Thursday after the company announced better than expected quarterly earnings. The stock had previously closed at $13.75, but opened at $15.51. Netskope shares last traded at $14.1060, with a volume of 3,314,956 shares traded.

The company reported ($0.03) earnings per share for the quarter, topping the consensus estimate of ($0.26) by $0.23. The business had revenue of $220.54 million for the quarter. Netskope has set its FY 2027 guidance at -0.150--0.150 EPS and its Q3 2027 guidance at -0.040--0.030 EPS.

Key Stories Impacting Netskope

Here are the key news stories impacting Netskope this week:

• Positive Sentiment: Strong quarterly results: Netskope reported fiscal Q2 revenue of approximately $220.5 million, up 29% year over year, while adjusted EPS of ($0.03) exceeded the consensus estimate of ($0.26). Annual recurring revenue rose 27% to $899 million, and management said results exceeded guidance across every key metric. Netskope fiscal Q2 financial results
• Positive Sentiment: Raised outlook: Netskope forecast fiscal 2027 revenue of $888 million to $892 million, above the $881 million analyst consensus, and narrowed its expected EPS loss to approximately $0.15 versus the consensus loss estimate of $0.32. Third-quarter revenue guidance of $227 million to $229 million and EPS guidance of ($0.04) to ($0.03) also exceeded analyst expectations. Netskope raises fiscal 2027 outlook
• Positive Sentiment: Analyst support increased: Rosenblatt raised its price target to $19 and assigned a Buy rating, BTIG lifted its target to $18 with a Buy rating, and Robert W. Baird raised its target to $20 with an Outperform rating. Analysts collectively rate NTSK “Moderate Buy.”
• Neutral Sentiment: Netskope remains unprofitable, reporting a quarterly loss, but the better-than-expected results and guidance suggest improving operating performance as demand for cloud and AI security grows.

Wall Street Analysts Forecast Growth

A number of equities analysts recently issued reports on the company. BTIG Research raised their price target on Netskope from $17.00 to $18.00 and gave the stock a "buy" rating in a report on Thursday. Weiss Ratings reaffirmed a "sell (e+)" rating on shares of Netskope in a report on Wednesday, July 8th. Piper Sandler reissued an "overweight" rating and set a $20.00 price target on shares of Netskope in a research report on Thursday. BMO Capital Markets reaffirmed an "outperform" rating and set a $18.00 price target on shares of Netskope in a research note on Thursday. Finally, Royal Bank Of Canada boosted their price objective on shares of Netskope from $18.00 to $20.00 and gave the company an "outperform" rating in a research report on Thursday. Sixteen research analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat, the company has an average rating of "Moderate Buy" and a consensus target price of $18.92.

Insider Buying and Selling at Netskope

In other news, Director Arif Janmohamed sold 1,313,827 shares of Netskope stock in a transaction that occurred on Friday, June 12th. The shares were sold at an average price of $9.19, for a total transaction of $12,074,070.13. Following the sale, the director owned 336,173 shares in the company, valued at $3,089,429.87. This trade represents a 79.63% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, major shareholder Iconiq Strategic Partners Viii bought 610,291 shares of the company's stock in a transaction dated Wednesday, July 8th. The shares were acquired at an average cost of $11.82 per share, for a total transaction of $7,213,639.62. Following the completion of the transaction, the insider owned 610,291 shares of the company's stock, valued at approximately $7,213,639.62. The trade was a ∞ increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. In the last three months, insiders bought 1,833,380 shares of company stock valued at $21,960,909 and sold 3,529,696 shares valued at $33,002,807. Corporate insiders own 25.52% of the company's stock.

Institutional Investors Weigh In On Netskope

A number of institutional investors have recently modified their holdings of the stock. SBI Securities Co. Ltd. lifted its holdings in Netskope by 32.6% during the 4th quarter. SBI Securities Co. Ltd. now owns 5,164 shares of the company's stock worth $91,000 after buying an additional 1,270 shares during the last quarter. Farther Finance Advisors LLC bought a new stake in Netskope during the fourth quarter valued at $25,000. Quarry LP acquired a new stake in shares of Netskope during the third quarter worth $41,000. Triumph Capital Management lifted its position in shares of Netskope by 380.0% in the 4th quarter. Triumph Capital Management now owns 2,400 shares of the company's stock worth $42,000 after buying an additional 1,900 shares during the last quarter. Finally, Federation des caisses Desjardins du Quebec lifted its position in shares of Netskope by 35.3% in the 4th quarter. Federation des caisses Desjardins du Quebec now owns 9,200 shares of the company's stock worth $161,000 after buying an additional 2,400 shares during the last quarter.

Netskope Price Performance

The company has a market capitalization of $5.77 billion and a P/E ratio of -71.45. The company has a debt-to-equity ratio of 4.06, a current ratio of 2.17 and a quick ratio of 2.16. The company has a fifty day moving average price of $13.27 and a 200 day moving average price of $11.27.

Netskope Company Profile

We are redefining security and networking for the era of cloud and AI. The cloud and AI have completely revolutionized work. We are more dispersed, more productive, and more automated than ever before, and the rate of change is only accelerating. Not since the internet has there been such a transformative tectonic shift. But, with it has come collateral damage-traditional security and networking are now broken. We founded Netskope to address this revolution. We built Netskope One, our unified, cloud-native platform from the ground up to solve the challenge of securing and accelerating the digital interactions of enterprises in this new era.

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