NetApp (NTAP) AI Stock Analysis

• Market Cap: $20.31B
• Dividend Yield: 2.23%
• Average Volume (3M): 2.28M
• Price to Earnings (P/E): 18.2
• Beta (1Y): 1.40
• Revenue Growth: 5.46%
• EPS Growth: 23.49%
• Country: US
• Employees: 11,800
• Sector: Technology
• Sector Strength: 65
• Industry: Computer Hardware
• EPS (TTM): 1.91
• Shares Outstanding: 206,376,660
• 10 Day Avg. Volume: 1,753,833
• 30 Day Avg. Volume: 2,281,027
• PEG Ratio: -18.55
• Price to Book (P/B): 18.93
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.06
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $112.25
• Price Target Upside: 14.04% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

NetApp's overall stock score reflects a strong financial performance with notable profitability and revenue growth. However, risks associated with high leverage and declining free cash flow growth warrant caution. The technical analysis indicates bearish momentum, though valuation metrics suggest a fair price with an attractive dividend yield. Corporate events and earnings call insights show strategic alignment and potential growth in key areas, balancing out some of the operational challenges.

Positive Factors

AI Traction

NetApp reported consistent AI traction with more than 100 deals in the quarter and multiple service provider wins, expecting a second half 2025 and beyond inflection with increasing enterprise AI deployments.

Product Line Refresh

NTAP has refreshed its entire product lines and the company appears confident regarding the medium-term outlook, particularly on the GM front.

Public Cloud Growth

Public cloud sales were again a bright spot, up 21% year-over-year excluding Spot.

Negative Factors

Divestiture Impact

NetApp's lowered FY25 guide reflects a $30M FX headwind, the divestiture of Spot ($15M), and global public sector caution.

Gross Margin Decline

Product GM% declined by 356 basis points quarter over quarter to 56.7%, confidence in a F4Q25 bottom at ~56% will be a focus as NetApp utilizes the remainder of strategic SSD purchases.

Revenue and Guidance Miss

NetApp’s fiscal third-quarter results and fourth-quarter guidance came in below consensus across most major key metrics.

NetApp Business Overview & Revenue Model

Company Description

NetApp, Inc., with the ticker symbol NTAP, is a leading provider of cloud data services and data management solutions. The company serves a wide range of industries by offering solutions that simplify and enhance the efficiency of data storage and management. Founded in 1992 and headquartered in San Jose, California, NetApp operates primarily in the information technology sector. Its core products and services include data storage systems, software, and cloud services that help businesses manage and protect their data across hybrid cloud environments.

How the Company Makes Money

NetApp generates revenue through the sale of hardware and software products, as well as cloud and support services. The company's revenue model includes product sales, which comprise the majority of its earnings, driven by its storage systems and data management software. Additionally, NetApp derives income from providing support services and maintenance contracts that offer technical assistance and updates to its customers. The company also earns from its cloud offerings, which include hybrid cloud solutions that enable customers to manage data across on-premises and cloud environments. Key partnerships with major cloud providers such as Amazon Web Services, Microsoft Azure, and Google Cloud, as well as strategic alliances with technology firms, enhance its product offerings and expand its market reach, contributing significantly to its revenue.

NetApp Financial Statement Overview

Summary

NetApp demonstrates strong profitability and operational efficiency, evidenced by high profit margins and revenue growth. However, the company relies significantly on debt, which poses financial risks. Cash flow generation remains healthy, but declining free cash flow growth suggests potential caution. Overall, NetApp exhibits a robust financial position with areas for improvement in leverage management.

Income Statement

NetApp's TTM (Trailing-Twelve-Months) income statement demonstrates strong profitability. The gross profit margin is 70.5%, indicating effective cost management in production. The net profit margin is 17.5%, showcasing a healthy bottom line. Revenue growth is impressive at 3.8% from the previous year, signaling robust demand for its offerings. EBIT and EBITDA margins are at 20.8% and 26.2% respectively, reflecting solid operational efficiency.

Balance Sheet

The balance sheet presents a mixed financial position. The debt-to-equity ratio stands at 2.00, suggesting a high reliance on debt, which could pose risks in adverse market conditions. However, the return on equity is a strong 114.3%, indicating effective use of shareholder funds. With an equity ratio of 11.1%, there is a relatively low proportion of equity financing, which may limit financial flexibility.

Cash Flow

Cash flow analysis shows a solid performance with a stable free cash flow to net income ratio of 1.11, indicating that the company generates adequate free cash flow relative to its net income. The operating cash flow to net income ratio is 1.27, reflecting efficient cash generation from core operations. However, free cash flow growth has declined by 17.3%, suggesting potential challenges in maintaining free cash flow levels.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
6.51B	6.27B	6.36B	6.32B	5.74B	5.41B
	Gross Profit
4.59B	4.43B	4.21B	4.22B	3.81B	3.62B
	EBIT
1.35B	1.21B	1.02B	1.16B	1.03B	945.00M
	EBITDA
1.71B	1.58B	1.43B	1.36B	1.29B	1.24B
	Net Income Common Stockholders
1.14B	986.00M	1.27B	937.00M	730.00M	819.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.26B	3.26B	3.07B	4.13B	4.60B	2.88B
	Total Assets
8.99B	9.89B	9.82B	10.03B	9.36B	7.52B
	Total Debt
2.25B	2.65B	2.39B	2.64B	2.63B	1.67B
	Net Debt
739.00M	749.00M	73.00M	-1.50B	-1.96B	-1.21B
	Total Liabilities
7.99B	8.74B	8.66B	9.19B	8.68B	7.28B
	Stockholders Equity
995.00M	1.15B	1.16B	838.00M	685.00M	242.00M
Cash Flow		Free Cash Flow
1.26B	1.53B	868.00M	985.00M	1.17B	936.00M
	Operating Cash Flow
1.44B	1.69B	1.11B	1.21B	1.33B	1.06B
	Investing Cash Flow
163.00M	-735.00M	-1.39B	-561.00M	21.00M	1.27B
	Financing Cash Flow
-1.90B	-1.34B	-1.51B	-1.02B	444.00M	-1.96B

NetApp Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 98.43
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTAP, the sentiment is Neutral. The current price of 98.43 is above the 20-day moving average (MA) of 88.37, above the 50-day MA of 88.69, and below the 200-day MA of 112.61, indicating a neutral trend. The MACD of 1.83 indicates Negative momentum. The RSI at 68.06 is Neutral, neither overbought nor oversold. The STOCH value of 88.86 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NTAP.

NetApp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PSTG	72 Outperform	$15.93B	159.20	8.29%	―	11.92%	74.08%
NTAP	70 Outperform	$20.31B	18.21	114.33%	2.23%	5.46%	23.49%
SMCI	67 Neutral	$20.00B	18.55	21.02%	―	82.10%	6.35%
STX	66 Neutral	$21.64B	14.73	-109.27%	2.97%	36.29%	―
WDC	66 Neutral	$15.39B	8.38	28.45%	―	21.22%	―
HPQ	63 Neutral	$24.94B	9.51	84.33%	4.27%	1.03%	-18.56%
Sector *	60 Neutral	$11.39B	10.50	-6.42%	2.97%	7.77%	-11.17%

NetApp Corporate Events

NetApp Expands Board with New Director Appointment

On March 21, 2025, NetApp’s Board of Directors expanded its board from nine to ten members and appointed Frank Pelzer as a new director. Pelzer, who will serve on the Audit Committee, is recognized as a financial expert and brings extensive experience in modern financial operations within cloud and as-a-service companies. His appointment is expected to drive NetApp’s strategic initiatives and enhance shareholder value as the company continues to innovate in data and intelligence.

NetApp Appoints Elizabeth O’Callahan as Chief Administrative Officer

On February 26, 2025, NetApp announced the appointment of Elizabeth O’Callahan as the Chief Administrative Officer, effective March 3, 2025. In her expanded role, O’Callahan will oversee Legal, Compliance, Government Relations, Sustainability, Human Resources, Workplace Experience, and Corporate Communications. This strategic leadership change aims to enhance operational excellence and align with NetApp’s corporate strategy, reinforcing its commitment to talent development and long-term growth.