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NetApp (NTAP)
NASDAQ:NTAP
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NetApp
(NASDAQ:NTAP)
Rating:77Outperform
Price Target:
$113.00
▲(6.35%Upside)
Positive Factors
AI Market Position
Longer-term, NetApp is well-positioned within enterprise AI market and management remains confident in executing against its portfolio as AI continues gains momentum.
Cloud Revenue Growth
Q4 Public Cloud revenue was up 22% Y/Y, excluding the divested Spot business, driven by first-party and marketplace cloud storage services.
Share Buyback
Management announced $1.1 billion buyback authorization increase.
Negative Factors
Economic Uncertainty
FY guidance missed on conservatism amidst significant macro uncertainty, paired with ongoing US Public Sector spending friction and slower economic activity in EMEA.
Growth Rate Concerns
The uncertainties associated with the core Enterprise spend and US public projects are causing a much lower growth rate.
Revenue Guidance
The FY26 revenue guidance of nearly +3% y/y growth was softer relative to consensus expectations, influenced by macro uncertainty due to tariffs and headwinds in public sector exposure in Europe and the US.
NetApp (NTAP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$21.39B
Dividend Yield1.99%
Average Volume (3M)2.09M
Price to Earnings (P/E)18.3
Beta (1Y)1.38
Revenue Growth5.00%
EPS Growth22.19%
CountryUS
Employees11,800
SectorTechnology
Sector Strength83
IndustryComputer Hardware
Share Statistics
EPS (TTM)1.93
Shares Outstanding206,376,660
10 Day Avg. Volume2,780,946
30 Day Avg. Volume2,089,441
Financial Highlights & Ratios
PEG Ratio-18.55
Price to Book (P/B)18.93
Price to Sales (P/S)0.00
P/FCF Ratio15.06
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$112.17Price Target Upside5.57% Upside
Rating ConsensusHold
Number of Analyst Covering14
NetApp Business Overview & Revenue Model
Company DescriptionNetApp, Inc. provides cloud-led and data-centric services to manage and share data on-premises, and private and public clouds worldwide. It operates in two segments, Hybrid Cloud and Public Could. The company offers intelligent data management software, such as NetApp ONTAP, NetApp Snapshot, NetApp SnapCenter Backup Management, NetApp SnapMirror Data Replication, NetApp SnapLock Data Compliance, NetApp ElementOS software, and NetApp SANtricity software; and storage infrastructure solutions, including NetApp All-Flash FAS series, NetApp Fabric Attached Storage, NetApp FlexPod, NetApp E/EF series, NetApp StorageGRID, and NetApp SolidFire. It also provides cloud storage and data services comprising NetApp Cloud Volumes ONTAP, Azure NetApp Files, Amazon FSx for NetApp ONTAP, NetApp Cloud Volumes Service for Google Cloud, NetApp Cloud Sync, NetApp Cloud Tiering, NetApp Cloud Backup, NetApp Cloud Data Sense, and NetApp Cloud Volumes Edge Cache; and cloud operations services, such as NetApp Cloud Insights, Spot Ocean Kubernetes Suite, Spot Security, Spot Eco, and Spot CloudCheckr. In addition, the company offers application-aware data management service under the NetApp Astra name; and professional and support services, such as strategic consulting, professional, managed, and support services. Further, it provides assessment, design, implementation, and migration services. The company serves the energy, financial service, government, technology, internet, life science, healthcare service, manufacturing, media, entertainment, animation, video postproduction, and telecommunication markets through a direct sales force and an ecosystem of partners. NetApp, Inc. was incorporated in 1992 and is headquartered in San Jose, California.
How the Company Makes MoneyNetApp generates revenue primarily through the sale of its data management and storage solutions. The company's business model is built around selling hardware products like all-flash and hybrid flash storage systems, as well as software products that enhance data management capabilities. Additionally, NetApp offers a range of services including professional services, support, and training that contribute to its earnings. A significant portion of its revenue also comes from its cloud data services, which provide data management solutions for public, private, and hybrid cloud environments. Key partnerships with leading cloud providers such as Amazon Web Services, Microsoft Azure, and Google Cloud Platform are crucial to NetApp's ability to deliver integrated solutions and expand its market reach. These partnerships, along with its extensive channel partner network, play a significant role in driving sales and increasing market penetration.
NetApp Key Performance Indicators (KPIs)
Any
Gross Margin by Segment
Indicates the profitability of each segment by comparing revenue to direct costs, providing insight into operational efficiency and pricing power across the company's offerings.
Indicates the profitability of each segment by comparing revenue to direct costs, providing insight into operational efficiency and pricing power across the company's offerings.
Data provided by:
Main Street Data
Main Street DataNetApp Earnings Call Summary
Earnings Call Date:May 30, 2025
(Q4-2025)
| % Change Since: 7.15%|
Next Earnings Date:Aug 27, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted record revenue achievements, significant growth in all-flash arrays and cloud services, and strong AI business expansion. However, challenges such as macroeconomic uncertainties, potential impacts from the divestiture, and geopolitical concerns were noted, leading to a cautious outlook for fiscal year 2026.Q4-2025 Updates
Positive Updates
Record Revenue Achievement
NetApp achieved record revenue for the fourth quarter and fiscal year 2025, driven by strong growth in all-flash storage and cloud services, marking all-time highs for gross profit, operating profit, operating margin, and EPS.
Significant Growth in All-Flash Array
All-flash array annualized revenue run rate grew 14% year over year to a record $4.1 billion, gaining 300 basis points of market share in calendar 2024.
Strong Public Cloud Segment Growth
First-party and marketplace cloud storage services grew 44% year over year in Q4, contributing to a 22% growth in the public cloud segment, excluding divested Spark business.
AI Business Expansion
NetApp's AI business grew fivefold year over year in Q4, closing approximately 150 AI infrastructure and data lake modernization deals.
Financial Performance and Shareholder Returns
Q4 operating margin reached 28.6%, the highest for a Q4 in NetApp's history, and EPS grew 7% year over year with $355 million returned to shareholders through share repurchases and dividends.
Negative Updates
Macroeconomic and Public Sector Challenges
Caution due to the global macroeconomic outlook with mixed signals, including a slowdown in growth, lingering inflation concerns, and uncertainties in the US public sector and EMEA.
Impact of Divestiture on Public Cloud Revenue
The divestiture of the Spot business is expected to negatively impact reported public cloud and total revenue growth for fiscal year 2026, with Spot having generated around $95 million annually.
Uncertainty in Manufacturing and Tariffs
Concerns about tariffs affecting manufacturing-centered economies in Europe, causing enterprises to slow down spending.
Guidance and Strategic Uncertainty
Despite strong competitive positioning, guidance reflects caution due to geopolitical situations and uncertainty in trade policies, potentially impacting revenue growth.
Company Guidance
In the recent earnings call, NetApp provided detailed guidance for fiscal year 2026, highlighting several key metrics. The company expects total revenue to range between $6.625 billion and $6.875 billion, indicating a 3% year-over-year growth at the midpoint. Excluding the divested Spot business, this implies a 4% growth. For the first quarter, revenue is projected to be between $1.455 billion and $1.605 billion, with a midpoint indicating a 1% year-over-year decline due to the divestiture. NetApp anticipates consolidated gross margins for FY26 to be between 71% and 72%, with operating margins expected to range from 28.8% to 29.8%. Earnings per share (EPS) are projected to be between $7.60 and $7.90. The company plans to return up to 100% of free cash flow to shareholders through dividends and share buybacks. Moreover, NetApp is poised to capitalize on growth opportunities in AI and public cloud services, with substantial investments in R&D and sales capacity aimed at capturing additional market share.NetApp Financial Statement Overview
Summary
NetApp demonstrates strong profitability and operational efficiency, evidenced by high profit margins and revenue growth. However, the company relies significantly on debt, which poses financial risks. Cash flow generation remains healthy, but declining free cash flow growth suggests potential caution. Overall, NetApp exhibits a robust financial position with areas for improvement in leverage management.Income Statement
NetApp's TTM (Trailing-Twelve-Months) income statement demonstrates strong profitability. The gross profit margin is 70.5%, indicating effective cost management in production. The net profit margin is 17.5%, showcasing a healthy bottom line. Revenue growth is impressive at 3.8% from the previous year, signaling robust demand for its offerings. EBIT and EBITDA margins are at 20.8% and 26.2% respectively, reflecting solid operational efficiency.85
Very Positive
Balance Sheet
The balance sheet presents a mixed financial position. The debt-to-equity ratio stands at 2.00, suggesting a high reliance on debt, which could pose risks in adverse market conditions. However, the return on equity is a strong 114.3%, indicating effective use of shareholder funds. With an equity ratio of 11.1%, there is a relatively low proportion of equity financing, which may limit financial flexibility.72
Positive
Cash Flow
Cash flow analysis shows a solid performance with a stable free cash flow to net income ratio of 1.11, indicating that the company generates adequate free cash flow relative to its net income. The operating cash flow to net income ratio is 1.27, reflecting efficient cash generation from core operations. However, free cash flow growth has declined by 17.3%, suggesting potential challenges in maintaining free cash flow levels.78
Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 6.51B | 6.27B | 6.36B | 6.32B | 5.74B | 5.41B | Gross Profit |
| 4.59B | 4.43B | 4.21B | 4.22B | 3.81B | 3.62B | EBIT |
| 1.35B | 1.21B | 1.02B | 1.16B | 1.03B | 945.00M | EBITDA |
| 1.71B | 1.58B | 1.43B | 1.36B | 1.29B | 1.24B | Net Income Common Stockholders |
| 1.14B | 986.00M | 1.27B | 937.00M | 730.00M | 819.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.26B | 3.26B | 3.07B | 4.13B | 4.60B | 2.88B | Total Assets |
| 8.99B | 9.89B | 9.82B | 10.03B | 9.36B | 7.52B | Total Debt |
| 2.25B | 2.65B | 2.39B | 2.64B | 2.63B | 1.67B | Net Debt |
| 739.00M | 749.00M | 73.00M | -1.50B | -1.96B | -1.21B | Total Liabilities |
| 7.99B | 8.74B | 8.66B | 9.19B | 8.68B | 7.28B | Stockholders Equity |
| 995.00M | 1.15B | 1.16B | 838.00M | 685.00M | 242.00M |
| Cash Flow | Free Cash Flow | ||||
| 1.26B | 1.53B | 868.00M | 985.00M | 1.17B | 936.00M | Operating Cash Flow |
| 1.44B | 1.69B | 1.11B | 1.21B | 1.33B | 1.06B | Investing Cash Flow |
| 163.00M | -735.00M | -1.39B | -561.00M | 21.00M | 1.27B | Financing Cash Flow |
| -1.90B | -1.34B | -1.51B | -1.02B | 444.00M | -1.96B |
NetApp Technical Analysis
Positive
106.25
Price Trends
91.76
Positive
101.01
Positive
110.71
Negative
Market Momentum
3.08
Negative
73.18
Negative
93.03
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTAP, the sentiment is Positive. The current price of 106.25 is above the 20-day moving average (MA) of 100.34, above the 50-day MA of 91.76, and below the 200-day MA of 110.71, indicating a neutral trend. The MACD of 3.08 indicates Negative momentum. The RSI at 73.18 is Negative, neither overbought nor oversold. The STOCH value of 93.03 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NTAP.
NetApp Risk Analysis
NetApp disclosed 38 risk factors in its most recent earnings report. NetApp reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
NetApp Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $25.78B | 24.36 | 21.03% | ― | 82.10% | 6.35% | |
77 Outperform | $21.39B | 18.28 | 108.51% | 1.99% | 5.00% | 22.19% | |
75 Outperform | $17.90B | 146.93 | 9.76% | ― | 10.85% | 30.85% | |
70 Neutral | $18.76B | 10.35 | 28.45% | ― | 21.22% | ― | |
68 Neutral | $27.09B | 18.45 | -109.27% | 2.23% | 36.29% | ― | |
64 Neutral | $23.65B | 9.52 | 84.33% | 4.57% | 2.08% | -12.41% | |
62 Neutral | $11.75B | 10.58 | -7.10% | 2.91% | 7.47% | -7.95% |
* Technology Sector Average
Performance Comparison
NTAP
NetApp
104.60
-14.09
-11.87%
HPQ
HP
25.18
-10.04
-28.51%
STX
Seagate Tech
126.97
33.60
35.99%
SMCI
Super Micro Computer
40.77
-36.14
-46.99%
WDC
Western Digital
55.45
-1.10
-1.95%
PSTG
Pure Storage
55.29
-9.65
-14.86%
NetApp Corporate Events
Executive/Board ChangesStock BuybackBusiness Operations and StrategyFinancial Disclosures
NetApp EVP Harvinder Bhela Announces Departure
Positive
May 29, 2025
On May 23, 2025, Harvinder Bhela announced his decision to step down from his role as Executive Vice President and Chief Product Officer at NetApp, effective June 20, 2025, with plans to assist in a smooth transition of his responsibilities. Additionally, on May 22, 2025, NetApp’s Board of Directors approved an additional $1.1 billion for stock repurchases, highlighting the company’s strong financial position and commitment to returning value to shareholders. NetApp reported record financial results for the fourth quarter and fiscal year 2025, with significant increases in net revenues, profitability, and market share in all-flash storage and cloud services. The company also announced several product innovations and strategic partnerships, positioning itself for continued growth and leadership in the enterprise AI market.
The most recent analyst rating on (NTAP) stock is a Hold with a $120.00 price target. To see the full list of analyst forecasts on NetApp stock, see the NTAP Stock Forecast page.
Executive/Board ChangesBusiness Operations and Strategy
NetApp Expands Board with New Director Appointment
Positive
Mar 26, 2025
On March 21, 2025, NetApp’s Board of Directors expanded its board from nine to ten members and appointed Frank Pelzer as a new director. Pelzer, who will serve on the Audit Committee, is recognized as a financial expert and brings extensive experience in modern financial operations within cloud and as-a-service companies. His appointment is expected to drive NetApp’s strategic initiatives and enhance shareholder value as the company continues to innovate in data and intelligence.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.