Cloud-based data-centric software company NetApp, Inc. (NTAP) delivered blowout first-quarter results aided by double-digit revenue and billings growth. Shares were up 3.4% in pre-market trading at the time of writing.
Earnings for the quarter came in at $1.15 per share, up 57.5% compared to the year-ago period, and significantly outpaced analysts’ estimates of $0.95 per share.
To add to that, net revenue grew 12% year-over-year to $1.46 billion and marginally surpassed the Street’s estimate of $1.43 billion. (See NetApp stock charts on TipRanks)
Commenting on the strong results, George Kurian, CEO of NetApp said, “Cloud and digital transformation initiatives remain top customer priorities and our results underscore the value we bring to customers in a hybrid, multi-cloud, data-driven world. We made a number of innovation announcements this quarter, and we will continue to bring industry-leading capabilities to market, further enhancing our differentiated position in cloud and software.”
Based on the accelerated momentum witnessed through the last year and into the current fiscal year, NetApp raised its full fiscal year 2022 guidance.
For the second quarter, NetApp forecasts net revenue and earnings to be in the range of $1.49 – $1.59 billion and $1.14 – $1.24 per share, respectively. Consensus estimates for revenue and earnings are pegged at $1.52 billion and $1.13 per share, respectively.
Additionally, for FY22, the company projects earnings to fall in the range of $4.85 – $5.05 per share compared to consensus forecasts of $4.59 per share. Also, FY22 net revenue is expected to grow by 8% – 9% annually.
Yesterday, in a NetApp earnings preview article, Susquehanna analyst Mehdi Hosseini reiterated a Buy rating on the stock with a price target of $95, implying 15.5% upside potential to current levels.
Hosseini expected NTAP to report a beat-and-raise quarter driven by customers continuing to upgrade the installed base of their storage solutions, while cloud data services (CDS) could help with incremental revenues.
Having said that, the analyst’s main interest was in NetApp’s year-over-year Product revenue growth, and when it would peak.
The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 9 Buys and 8 Holds. The average NetApp price target of $86.27 implies 4.9% upside potential to current levels. Shares have gained 94.9% over the past year.
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