NetApp (NTAP)
NASDAQ:NTAP
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NetApp
(NASDAQ:NTAP)
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Rating:64Neutral
Price Target:
$106.00
▲(8.60% Upside)
Action:DowngradedDate: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.
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.
Read all positive and negative factors
Positive Factors
Negative 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.
Read all positive factors
NetApp (NTAP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$19.26B
Dividend Yield1.89%
Average Volume (3M)2.34M
Price to Earnings (P/E)14.4
Beta (1Y)1.36
Revenue Growth2.64%
EPS Growth4.12%
CountryUS
Employees11,800
SectorTechnology
Sector Strength88
IndustryComputer Hardware
Share Statistics
EPS (TTM)2.12
Shares Outstanding197,330,400
10 Day Avg. Volume1,750,340
30 Day Avg. Volume2,341,656
Financial Highlights & Ratios
PEG Ratio0.68
Price to Book (P/B)17.60
Price to Sales (P/S)2.79
P/FCF Ratio13.68
Enterprise Value/Market Cap1.08
Enterprise Value/Revenue3.10
Enterprise Value/Gross Profit4.40
Enterprise Value/Ebitda11.62
Forecast
1Y Price Target
$118.46Price Target Upside21.36% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
EPS Forecast (FY)7.98
Revenue Forecast (FY)$6.84B
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 sof...
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 l...
NetApp Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyNetApp Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 28, 2026
Earnings Call Sentiment Positive
The call presented multiple strong operational achievements: revenue and EPS growth, record operating income, robust all-flash and Keystone momentum, growing deferred revenue/RPO and accelerating AI customer adoption (300 AI customers, AFX early wins and AIDE coming in Q4). Those positives are tempered by margin pressure at the product level driven by unfavorable mix and open-market purchases, and by an ongoing risk from inflationary memory prices and supply dynamics. Management is addressing these challenges via price increases, supplier engagement, and portfolio flexibility (hybrid, Keystone, cloud). On balance the call emphasized solid execution and growth opportunities while acknowledging manageable near-term margin and supply risks.Positive Updates
Revenue Growth and EPS Outperformance
Q3 revenue of $1.71B, up 4% year-over-year (ex-Spot: +6%). Non-GAAP EPS $2.12, up 11% year-over-year, and results exceeded the midpoint of revenue guidance and the high end of EPS guidance.
Negative Updates
Product Gross Margin Pressure
Product gross margin declined 4.2 percentage points sequentially to 55.3%, contributing to Hybrid Cloud gross margin falling 1.8 ppt sequentially to 69.6%. Management attributed the decline to an unfavorable revenue mix and higher-cost market purchases.
Read all updates
Q3-2026 Updates
Positive
Negative
Revenue Growth and EPS Outperformance
Q3 revenue of $1.71B, up 4% year-over-year (ex-Spot: +6%). Non-GAAP EPS $2.12, up 11% year-over-year, and results exceeded the midpoint of revenue guidance and the high end of EPS guidance.
Read all positive updates
Company Guidance
NetApp provided non‑GAAP Q4 guidance of revenue $1.87B ± $75M (midpoint implying ~8% YoY growth, ~9% YoY excl. the prior‑year $25M Spot divestiture), gross margin 69.5–70.5%, operating margin 30.5–31.5% and EPS $2.21–$2.31. For fiscal 2026 the company guided revenue $6.772B–$6.922B (midpoint $6.847B, ~4% YoY growth, ~5% excl. Spot), gross margin 70.7–71.7%, operating margin 29.3–30.3%, approximately $24M net other expense, a tax rate of 20.2–21.2% and EPS $7.92–$8.02. Management framed this guidance against Q3 outperformance (Q3 revenue $1.71B; non‑GAAP EPS $2.12) and noted the Spot divestiture as the basis for certain “ex‑Spot” growth comparisons.NetApp Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
55
Neutral
Cash Flow
73
Positive
| 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
Negative
97.61
Price Trends
100.29
Negative
104.27
Negative
107.86
Negative
Market Momentum
0.10
Positive
42.25
Neutral
26.86
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 97.61 is below the 20-day moving average (MA) of 100.79, below the 50-day MA of 100.29, and below the 200-day MA of 107.86, indicating a bearish trend. The MACD of 0.10 indicates Positive momentum. The RSI at 42.25 is Neutral, neither overbought nor oversold. The STOCH value of 26.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NTAP.
NetApp Risk Analysis
NetApp disclosed 39 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $105.77B | 8.79 | 64.18% | 0.18% | -16.35% | 316.56% | |
71 Outperform | $20.45B | 123.52 | 13.91% | ― | 13.18% | -0.92% | |
70 Outperform | $102.22B | 26.06 | -889.39% | 1.02% | 31.56% | 106.00% | |
64 Neutral | $19.26B | 14.44 | 116.57% | 1.89% | 2.64% | 4.12% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | $13.58B | 10.90 | 13.33% | ― | 12.22% | -48.34% | |
57 Neutral | $17.02B | 8.26 | 1135.29% | 5.09% | 4.09% | -5.77% |
* Technology Sector Average
NTAP
NetApp
97.61
13.14
15.56%
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NetApp Corporate Events
Business Operations and StrategyExecutive/Board Changes
NetApp Adds Independent Director to Strengthen AI Strategy
Positive
Jan 12, 2026
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 pre...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.