NTSK Stock: Is Netskope Ready for the Agentic Age?

From government-enforced pauses on the release of new models to highly publicised breaches caused by rogue artificial intelligence (AI) agents, the casual observer would be forgiven for thinking that cyber security is not ready for the AI era. 

Netskope [NTSK] is hoping to change that. 

Founded in 2012, the Santa Clara, California-based company offers cloud-native security solutions to its clients, which include more than 30% of the Fortune 100. Its Netskope One platform offers Security Service Edge (SSE) and Secure Access Service Edge (SASE) capabilities, working to secure a range of digital environments, including AI workloads. The company operates on a subscription-based, software-as-a-service (SaaS) model, allowing it to capture the recurring revenue and high margins typical of SaaS firms.

But Netskope is not the only player in the game. As the firm pits its services against much larger and better-funded cyber security companies looking to secure AI workflows, CMC Aureon examines the obstacles and opportunities facing Netskope, and what recent earnings signal for its near-term trajectory. 

Guardrails and guidance

The company is fully aware of the novel risks posed by the rapid development and deployment of AI models and agents. In an August interview with CRN, Netskope Chief Information Security Officer James Robinson outlined one of the top cyber security risks of the agentic era: agent collisions. An extension of the issues caused by fragmented cyber security toolkits, this occurs when several independent agents attempt to address the same security breach – and proceed to crash systems with a flurry of rapid resolution requests.

To address this and other AI-related security concerns, Netskope is working to boost its standing as a unified data security solution. It launched the Netskope One DataSec Command Center on 4 August, aiming to address the risks associated with rapid AI adoption. In the press release, Netskope underlined that some 98% of organisations now use AI, but only 8% have implemented AI-appropriate data protection policies. The system works in tandem with the DLP AISecOps Agent to detect and resolve data security issues at machine speed. 

Netskope reported Q2 2027 earnings after the market close on 2 September. Non-GAAP EPS of -$0.03 and revenue of $220.5m beat expectations. Annual recurring revenue (ARR) grew 27% year-on-year to $899m. GAAP gross margin rose two percentage points from the year-ago quarter to an enviable 74% – sneaking closer to management’s long-term target of 80% – and non-GAAP gross profit rose to $161.1m, compared to $127.3m in Q2 2026. 

Netskope still has a way to go before its balance sheet is on steady ground, however. GAAP loss from operations widened from $46m in the year-ago quarter to $89.8m, and GAAP operating margin came in at -41%, compared to -27% in Q2 2026. While the company had $1.1bn in cash and cash equivalents at the end of Q2, cash flow for the quarter was $29.8m, highlighting the cost of Netskope’s growth. The company also announced the reduction of its workforce by 5% – in line with efforts to “drive AI-nativeness company-wide”, in the words of CFO Andrew Del Matto. 

The largely positive results allowed management to raise its revenue guidance for the year from $879m-883m to $888m-892m, with an operating margin of -9%. In Q3, the company expects revenue in the range of $227m-229m. 

NTSK’s post-IPO blues

Netskope debuted on the Nasdaq in September 2025, raising approximately $992.2m at a share price of $19.00 and closing its first day with a market capitalisation of $9.6bn. NTSK’s share price saw a few short-lived spikes in its first month of trading before beginning a deep post-IPO dip, dropping as low as $7.66 on 27 March, representing a 59.58% slide from its IPO price. 

As of the 2 September close the stock was trading at $13.75, still down 27.63% from its IPO price but up 79.5% from its all-time low. The release of strong Q2 earnings could further catalyse a rebound, assuming investors focus on the company’s top- and bottom-line wins, and not its continuing cash burn.  

Security for the AI Era: NTSK vs PANW vs ZS

Netskope faces heavy competition in the cyber security sector, from both hardware-native incumbents and cloud-native competitors. 

Fellow Santa Clara-based firm Palo Alto Networks [PANW] represents the potential for a fully scaled cyber security company leveraging a unified platform and a broad portfolio. The two firms compete on their SASE and AI security offerings, but PANW also offers firewalls and cloud and identity security solutions, leveraging its much larger scale to cross-sell its products. The company reported Q4 2026 earnings on 1 September, beating analyst expectations with revenue of $3.41bn and non-GAAP EPS of $1.02. The company added nearly $1bn of ARR to reach $9.10bn, while its remaining performance obligations grew 34% to $21.2bn, sign of a strong pipeline. Management guided FY2027 revenue in the $14.10bn-14.20bn range. 

Zscaler [ZS], however, presents a more direct comparison, with overlap in the two companies’ SSE and zero trust solutions, though it focuses more on cloud and network security compared to Netskope’s data-centric approach. Zscaler is set to report Q4 2026 earnings on 3 September after the market close. Analyst expectations are mixed, citing limited upside and increased competition from the likes of Netskope. The consensus EPS is $1.09, translating to growth of 23% from Q4 2025, while expected revenue of $877.6m would represent an improvement of 22%. 

Source: Yahoo Finance

Conclusion: The investment case for NTSK stock

Netskope is a relatively small, early-stage player in a competitive market, but the risks and opportunities related to the rollout of AI agents have shaken up the space, presenting an attractive opportunity for agile, specialised firms. Moves to provide a unified platform focused on securing agentic workloads could boost Netskope’s visibility and reach, and its financial targets suggest it is scaling efficiently; a net retention rate of 114% and a long-term gross margin target of 80% point to improving stickiness and financial health. 

That said, Netskope is forecast to remain unprofitable for the next three years, and its -9% operating guidance for FY2027 points to the company’s continuing cash burn. It also faces much larger competitors who could leverage their broader portfolios to crowd Netskope out of the market before it can turn cash flow positive. 

In general, Netskope represents a high-risk, high-reward play on the cyber security theme, offering considerable growth potential if it is able to scale its unified solutions for security in the AI era. Of the 18 analysts surveyed by Yahoo Finance in September, five rated the stock a ‘strong buy’ and 11 rated it a ‘buy’, while the remaining two rated it a ‘hold’. The average price target of $17.64 is still 7.16% down from NTSK’s IPO price, but represents an upside of 28.29% from the 2 September close.