NetApp (NTAP) AI Stock Analysis

• Market Cap: $24.66B
• Dividend Yield: 1.68%
• Average Volume (3M): 1.92M
• Price to Earnings (P/E): 21.8
• Beta (1Y): 1.41
• Revenue Growth: 3.45%
• EPS Growth: 9.69%
• Country: US
• Employees: 11,800
• Sector: Technology
• Sector Strength: 86
• Industry: Computer Hardware
• EPS (TTM): 1.55
• Shares Outstanding: 199,618,400
• 10 Day Avg. Volume: 2,688,709
• 30 Day Avg. Volume: 1,923,338
• PEG Ratio: 0.67
• Price to Book (P/B): 17.35
• Price to Sales (P/S): 2.75
• P/FCF Ratio: 13.49
• Enterprise Value/Market Cap: 0.84
• Enterprise Value/Revenue: 3.14
• Enterprise Value/Gross Profit: 4.49
• Enterprise Value/Ebitda: 12.22
• 1Y Price Target: $118.60
• Price Target Upside: -5.19% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 12

• Rating: 74 Outperform
• Price Target: $131.00 ▲(4.72% Upside)

NetApp's strong financial performance and strategic focus on cloud services and AI infrastructure are key strengths, driving growth and profitability. Technical indicators suggest caution due to overbought conditions, while valuation metrics indicate fair pricing. Earnings call insights reveal robust growth but also highlight regional challenges. Overall, NetApp is well-positioned but faces some risks that investors should monitor.

Positive Factors

Revenue Growth

Record revenue growth indicates strong market demand and successful product adoption, supporting long-term financial stability and expansion.

Cloud and AI Expansion

Rapid growth in AI and cloud segments positions NetApp as a leader in emerging tech markets, ensuring future revenue streams and competitive advantage.

Strong Cash Flow

Robust cash flow generation supports ongoing investments and shareholder returns, enhancing financial flexibility and growth potential.

Negative Factors

Macroeconomic Uncertainty

Global economic uncertainties could impact demand and revenue, posing risks to growth and financial performance in affected regions.

Increased Financial Leverage

Higher financial leverage may limit NetApp's ability to invest in growth opportunities and increase vulnerability to economic downturns.

Impact of Spot Business Divestiture

Divesting the Spot business could reduce short-term revenue growth, affecting overall financial performance and market perception.

NetApp Business Overview & Revenue Model

Company Description

NetApp, Inc. (NTAP) is a global data management and cloud storage solutions company headquartered in Sunnyvale, California. Established in 1992, NetApp specializes in providing data storage and management systems, data services, and hybrid cloud solutions to enterprises across various sectors. The company's core products include storage systems, data management software, and cloud services that enable organizations to store, manage, and protect their data efficiently. NetApp's offerings are designed to help businesses accelerate their data-driven transformations and optimize their IT infrastructures.

How the Company Makes Money

NetApp generates revenue primarily through the sale of hardware, software, and cloud services. Its key revenue streams include the sale of storage and data management products, which encompass hardware appliances and associated software licenses. The company also earns significant revenue from subscription-based cloud services that enable customers to leverage hybrid cloud environments. Additionally, NetApp provides professional services and support, which contribute to its overall earnings. Strategic partnerships with major cloud providers, such as Microsoft Azure and Amazon Web Services, further enhance NetApp's market presence and create additional revenue opportunities through integrated solutions. The company's focus on innovation and expansion into emerging technologies, such as AI and machine learning, also plays a crucial role in driving its financial performance.

NetApp Financial Statement Overview

Summary

NetApp exhibits strong financial performance with robust revenue growth and profitability. The company maintains healthy margins and has shown improvement in cash flow generation. However, the high debt-to-equity ratio suggests a need for careful management of financial leverage.

Income Statement

NetApp's income statement shows strong profitability with a gross profit margin of 70.19% and a net profit margin of 18.05% for the TTM. The company has demonstrated significant revenue growth of 27.4% in the TTM period, indicating robust demand for its products. EBIT and EBITDA margins are healthy at 22.02% and 25.72%, respectively, reflecting efficient operational management. However, the net profit margin has slightly decreased from previous periods, suggesting some pressure on net earnings.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 3.36, indicating significant leverage, which could pose a risk if not managed carefully. Return on equity is impressive at 123.03%, showcasing strong profitability relative to shareholder equity. The equity ratio is relatively low, suggesting a higher reliance on debt financing. Overall, while profitability metrics are strong, the high leverage warrants cautious monitoring.

Cash Flow

NetApp's cash flow statement highlights a solid free cash flow growth rate of 23.92% in the TTM, indicating improved cash generation capabilities. The operating cash flow to net income ratio is 0.32, and the free cash flow to net income ratio is 0.89, reflecting efficient conversion of income into cash. Despite previous fluctuations in free cash flow growth, the recent positive trend is encouraging.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	6.59B	6.57B	6.27B	6.36B	6.32B	5.74B
Gross Profit	4.61B	4.61B	4.43B	4.21B	4.22B	3.81B
EBITDA	1.70B	1.69B	1.58B	1.43B	1.36B	1.29B
Net Income	1.17B	1.19B	986.00M	1.27B	937.00M	730.00M
Balance Sheet
Total Assets	9.68B	10.82B	9.89B	9.82B	10.03B	9.36B
Cash, Cash Equivalents and Short-Term Investments	3.32B	3.85B	3.25B	3.07B	4.13B	4.60B
Total Debt	2.48B	3.49B	2.65B	2.68B	2.94B	2.75B
Total Liabilities	8.70B	9.78B	8.74B	8.66B	9.19B	8.68B
Stockholders Equity	975.00M	1.04B	1.15B	1.16B	838.00M	685.00M
Cash Flow
Free Cash Flow	1.66B	1.34B	1.53B	868.00M	985.00M	1.17B
Operating Cash Flow	1.84B	1.51B	1.69B	1.11B	1.21B	1.33B
Investing Cash Flow	17.00M	147.00M	-735.00M	-1.39B	-561.00M	21.00M
Financing Cash Flow	-1.44B	-828.00M	-1.34B	-1.51B	-1.02B	444.00M

NetApp Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 125.09
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 125.09 is above the 20-day moving average (MA) of 114.40, above the 50-day MA of 109.07, and above the 200-day MA of 106.14, indicating a bullish trend. The MACD of 4.41 indicates Negative momentum. The RSI at 76.04 is Negative, neither overbought nor oversold. The STOCH value of 96.27 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NTAP.

NetApp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NTAP	74 Outperform	$24.66B	21.83	123.00%	1.68%	3.45%	9.69%
WDC	74 Outperform	$32.96B	19.70	25.98%	0.21%	2.12%	―
HPQ	73 Outperform	$26.52B	10.32	84.33%	4.08%	3.11%	-3.54%
STX	72 Outperform	$41.06B	28.52	-109.27%	1.45%	38.86%	337.22%
SMCI	68 Neutral	$23.79B	25.86	17.90%	―	47.04%	-17.89%
PSTG	65 Neutral	$26.52B	199.29	10.04%	―	11.31%	-1.30%
Sector *	61 Neutral	$36.70B	12.21	-10.39%	1.84%	8.50%	-7.32%

NetApp Corporate Events

NetApp EVP Harvinder Bhela Announces Departure

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.