NetApp (NTAP) AI Stock Analysis

• Market Cap: $19.47B
• Dividend Yield: 1.89%
• Average Volume (3M): 2.38M
• Price to Earnings (P/E): 14.4
• Beta (1Y): 1.43
• Revenue Growth: 2.64%
• EPS Growth: 4.12%
• Country: US
• Employees: 11,800
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): 2.12
• Shares Outstanding: 197,330,400
• 10 Day Avg. Volume: 2,394,416
• 30 Day Avg. Volume: 2,380,864
• PEG Ratio: 0.68
• Price to Book (P/B): 17.60
• Price to Sales (P/S): 2.79
• P/FCF Ratio: 13.68
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 3.08
• Enterprise Value/Gross Profit: 4.37
• Enterprise Value/Ebitda: 11.53
• 1Y Price Target: $116.70
• Price Target Upside: 18.29% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): 7.97
• Revenue Forecast (FY): $6.84B

• Rating: 64 Neutral
• Price Target: $106.00 ▲(7.44% Upside)
• Action: Downgraded Date: 03/02/26
• Date: Action: Downgraded 03/02/26

The score is driven primarily by strong profitability/cash generation and a constructive earnings outlook with solid execution in all-flash, Keystone, and AI. Offsetting these positives are elevated balance-sheet leverage and weak technicals (below key moving averages with negative MACD), while valuation is reasonable and supported by a modest dividend yield.

Positive Factors

Profitability & Cash Generation

NetApp's high gross (~70%) and net (~18%) margins and strong operating/free cash flow (OCF ~$1.8B, FCF ~90% of net income) underpin durable internal funding for R&D, share buybacks, and dividends, improving resilience to cyclical demand and supporting multi-quarter strategic investments.

Keystone (Storage-as-a-Service) Growth & RPO

Rapid Keystone growth and rising unbilled RPO provide recurring, consumption-driven revenue and multi-quarter visibility. This structural shift toward storage-as-a-service improves revenue predictability, customer stickiness, and margin stability versus pure hardware sales over the medium term.

AI Product Traction & Customer Adoption

Growing AI adoption (300 customers), initial AFX wins, and imminent AIDE availability position NetApp to capture structural demand for AI data infrastructure. Durable demand from AI workloads can raise average selling prices, enable high-value software sales, and expand long-term enterprise engagement.

Negative Factors

Elevated Leverage

NetApp's elevated leverage and a thin equity base constrain financial flexibility for M&A, cyclical downturns, or large strategic investments. Even with improved absolute debt levels versus prior years, higher leverage increases refinancing and interest-rate sensitivity over a multi-month horizon.

Product Gross Margin Pressure

Margin compression from unfavorable product mix, open-market purchases, and inflationary memory costs creates persistent risk to product profitability. Unless offset by sustained price increases, supplier improvements, or a higher share of software/Keystone revenue, product margin volatility can erode long-term operating margins.

Modest Top-Line Growth

NetApp's historically modest revenue growth reduces breathing room for margin expansion and reliance on cost efficiencies. Sustaining higher growth will require Keystone, AI, and cloud marketplace traction to offset hardware commoditization; prolonged low growth increases execution pressure on strategy and returns.

NetApp Business Overview & Revenue Model

Company Description

NetApp, 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 Money

NetApp generates revenue primarily through the sale of its hardware and software products, along with subscription services for cloud-based data management solutions. Key revenue streams include the direct sales of data storage systems, software licenses, and cloud services. The company also earns recurring revenue from maintenance and support contracts, as well as subscriptions for its cloud services. Strategic partnerships with major cloud providers like Microsoft Azure, Amazon Web Services, and Google Cloud enhance its market reach and contribute to its earnings by integrating its solutions with these platforms. Additionally, NetApp's focus on innovative technologies such as artificial intelligence and data analytics further positions it to capture growth in the evolving data management landscape.

NetApp Financial Statement Overview

Summary

Profitability and cash generation are strong (TTM gross margin ~70%, net margin ~18%, robust operating and free cash flow), supporting earnings quality. However, the balance sheet is a key constraint with elevated leverage (TTM debt-to-equity ~2.1x) and a thin equity cushion, and recent free cash flow growth has been negative, tempering the score.

Income Statement

NTAP shows strong profitability with TTM (Trailing-Twelve-Months) gross margin around 70% and operating profitability in the low-to-mid 20% range, supporting solid earnings power. Revenue growth is modest (about +5% in FY2025 and ~+1% in TTM), but margins have generally improved versus earlier years, and net margin remains healthy at ~18% in TTM. The main drawback is the relatively slow top-line trajectory and some year-to-year variability in profit levels (e.g., net margin was higher in FY2023 than in TTM).

Balance Sheet

Leverage is the key constraint: TTM debt-to-equity is elevated (~2.1x) and has been higher in prior years (peaking above 4.0x), reflecting a balance sheet that relies meaningfully on debt relative to equity. On the positive side, debt levels improved materially from FY2025 to TTM, and returns on equity are very strong, indicating efficient profit generation on the equity base. The weakness is that the thin equity cushion leaves less flexibility if business conditions soften.

Cash Flow

Cash generation is a clear strength: TTM operating cash flow (~$1.8B) and free cash flow (~$1.6B) are robust, with free cash flow running at roughly 90% of net income—supporting earnings quality. However, free cash flow growth is negative in TTM and FY2025, suggesting some recent pressure on cash flow momentum. A further watch item is that operating cash flow is not consistently high relative to EBIT (coverage below 0.5x in TTM and lower in prior years), indicating some working-capital or cash timing headwinds despite strong absolute cash production.

Breakdown	TTM	Apr 2025	Apr 2024	Apr 2023	Apr 2022	Apr 2021
Income Statement
Total Revenue	6.71B	6.57B	6.27B	6.36B	6.32B	5.74B
Gross Profit	4.73B	4.61B	4.43B	4.21B	4.22B	3.81B
EBITDA	1.79B	1.69B	1.58B	1.43B	1.36B	1.29B
Net Income	1.21B	1.19B	986.00M	1.27B	937.00M	730.00M
Balance Sheet
Total Assets	9.97B	10.82B	9.89B	9.82B	10.03B	9.36B
Cash, Cash Equivalents and Short-Term Investments	3.02B	3.85B	3.25B	3.07B	4.13B	4.60B
Total Debt	2.73B	3.49B	2.65B	2.68B	2.94B	2.75B
Total Liabilities	8.81B	9.78B	8.74B	8.66B	9.19B	8.68B
Stockholders Equity	1.16B	1.04B	1.15B	1.16B	838.00M	685.00M
Cash Flow
Free Cash Flow	1.61B	1.34B	1.53B	868.00M	985.00M	1.17B
Operating Cash Flow	1.79B	1.51B	1.69B	1.11B	1.21B	1.33B
Investing Cash Flow	-728.00M	147.00M	-735.00M	-1.39B	-561.00M	21.00M
Financing Cash Flow	-968.00M	-828.00M	-1.34B	-1.51B	-1.02B	444.00M

NetApp Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 98.66
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTAP, the sentiment is Negative. The current price of 98.66 is below the 20-day moving average (MA) of 100.08, below the 50-day MA of 101.33, and below the 200-day MA of 108.30, indicating a bearish trend. The MACD of -1.02 indicates Positive momentum. The RSI at 46.19 is Neutral, neither overbought nor oversold. The STOCH value of 25.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NTAP.

NetApp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WDC	79 Outperform	$92.32B	8.79	64.18%	0.18%	-16.35%	316.56%
PSTG	72 Outperform	$20.31B	117.67	13.91%	―	13.18%	-0.92%
STX	70 Outperform	$83.68B	26.06	-889.39%	1.02%	31.56%	106.00%
NTAP	64 Neutral	$19.47B	14.44	116.57%	1.89%	2.64%	4.12%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SMCI	58 Neutral	$18.42B	10.90	13.33%	―	12.22%	-48.34%
HPQ	57 Neutral	$17.31B	8.26	1135.29%	5.09%	4.09%	-5.77%

NetApp Corporate Events

NetApp Adds Independent Director to Strengthen AI Strategy

On January 8, 2026, NetApp’s board expanded its size from nine to ten members and appointed Paul Fipps, President of Global Customer Operations at ServiceNow, as a new independent director, a move formally announced in a January 12, 2026 press release from the company’s San Jose headquarters. Fipps, a veteran executive with more than 20 years’ experience in technology-enabled growth, digital customer transformation, and AI solution deployment at ServiceNow and Under Armour, will join NetApp’s non-employee director compensation program and standard indemnification framework, further strengthening a board in which nine of ten directors are independent and half have been added in the past five years. NetApp’s leadership highlighted that Fipps’s background in aligning global sales, customer success, partner ecosystems, and AI-driven digital experiences is expected to sharpen execution and innovation as the company seeks to consolidate its position as a trusted provider of AI-ready data infrastructure, with implications for accelerated growth and enhanced support for customers’ AI and digital transformation initiatives worldwide.

The most recent analyst rating on (NTAP) stock is a Buy with a $130.00 price target. To see the full list of analyst forecasts on NetApp stock, see the NTAP Stock Forecast page.