NetApp Inc (NTAP)
NASDAQ:NTAP
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NetApp
(NASDAQ:NTAP)
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Rating:64Neutral
Price Target:
$128.00
▲(22.45% Upside)
Action:Downgraded
Date: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
Cash Generation
NetApp's strong absolute cash generation—operating cash flow around $1.8B and FCF roughly $1.6B—creates durable financial flexibility. High FCF conversion supports reinvestment in R&D, cloud partnerships, dividends and buybacks, cushioning the business through IT spending cycles.
Negative Factors
Elevated Leverage
NetApp's elevated leverage and limited equity cushion constrain financial flexibility during downturns. Higher debt levels increase interest and refinancing risk, reduce optionality for strategic M&A or large capital investments, and make the firm more sensitive to cash flow volatility.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash Generation
NetApp's strong absolute cash generation—operating cash flow around $1.8B and FCF roughly $1.6B—creates durable financial flexibility. High FCF conversion supports reinvestment in R&D, cloud partnerships, dividends and buybacks, cushioning the business through IT spending cycles.
Read all positive factors
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 (NTAP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$23.80B
Dividend Yield1.89%
Average Volume (3M)2.14M
Price to Earnings (P/E)14.4
Beta (1Y)1.32
Revenue Growth3.04%
EPS Growth9.12%
CountryUS
Employees11,800
SectorTechnology
Sector Strength88
IndustryComputer Hardware
Share Statistics
EPS (TTM)6.05
Shares Outstanding197,330,400
10 Day Avg. Volume2,403,078
30 Day Avg. Volume2,142,626
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 Cap1.04
Enterprise Value/Revenue3.68
Enterprise Value/Gross Profit5.22
Enterprise Value/Ebitda13.78
Forecast
1Y Price Target
$118.00Price Target Upside12.89% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
EPS Forecast (FY)8.54
Revenue Forecast (FY)$7.20B
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 makes money primarily by selling and supporting enterprise storage and data management solutions. Its revenue model is centered on (1) product revenue from storage hardware systems (notably all-flash arrays and related infrastructure) and a...
NetApp 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
Positive
104.53
Price Trends
106.18
Positive
103.95
Positive
108.74
Positive
Market Momentum
4.25
Negative
71.15
Negative
76.00
Neutral
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 104.53 is below the 20-day moving average (MA) of 113.89, below the 50-day MA of 106.18, and below the 200-day MA of 108.74, indicating a bullish trend. The MACD of 4.25 indicates Negative momentum. The RSI at 71.15 is Negative, neither overbought nor oversold. The STOCH value of 76.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
81 Outperform | $158.10B | 7.94 | 91.94% | 0.18% | -18.43% | 242.76% | |
74 Outperform | $166.12B | 31.71 | 916.38% | 1.02% | 28.92% | 55.56% | |
64 Neutral | $23.80B | 14.44 | 116.57% | 1.89% | 3.04% | 9.12% | |
62 Neutral | $19.13B | 8.26 | 1135.29% | 5.09% | 5.09% | -5.05% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
58 Neutral | $18.55B | 7.04 | 18.21% | ― | 56.58% | 1.94% |
* Technology Sector Average
NTAP
NetApp
120.59
22.91
23.45%
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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.