NetApp (NASDAQ:NTAP – Get Free Report) released its earnings results on Thursday. The data storage provider reported $2.03 earnings per share for the quarter, missing the consensus estimate of $2.27 by ($0.24), Zacks reports. The firm had revenue of $1.95 billion during the quarter, compared to the consensus estimate of $1.87 billion. NetApp had a net margin of 18.07% and a return on equity of 118.11%. NetApp’s quarterly revenue was up 12.5% compared to the same quarter last year. During the same period in the prior year, the business posted $1.93 earnings per share. NetApp updated its FY 2027 guidance to 8.700-9.000 EPS and its Q1 2027 guidance to 2.050-2.150 EPS.
Here are the key takeaways from NetApp’s conference call:
- NetApp posted record FY 2026 results, with record revenue, gross profit, operating income, operating cash flow, and free cash flow. Management said the company achieved its full-year 30% operating margin target and generated strong demand across AI and cloud.
- Q4 outperformed expectations, with revenue of $1.95 billion and EPS of $2.43, both above the high end of guidance. The company also delivered a 32% operating margin and all-time record quarterly operating income.
- AI demand was a major growth driver, with about 500 AI and data preparation wins in Q4 and over 1,100 for the full year. Management said AI opportunities are broad-based across on-prem, neo-cloud, and sovereign cloud customers, and that enterprise AI adoption is accelerating.
- Cloud, all-flash, and Keystone all hit new highs, with public cloud revenue up 18% in FY 2026 ex-Spot, all-flash revenue up 11%, and Keystone revenue up about 65%. Management said these businesses are expanding NetApp’s addressable market and supporting future growth.
- FY 2027 guidance calls for faster top-line growth, with revenue expected to rise to $7.325 billion-$7.575 billion, implying 8% growth at the midpoint. NetApp also guided to EPS of $8.70-$9.00 and said it plans to return up to 100% of free cash flow to shareholders.
NetApp Stock Performance
Shares of NASDAQ NTAP traded down $0.34 during trading hours on Thursday, reaching $142.40. 5,991,844 shares of the stock were exchanged, compared to its average volume of 2,505,100. The firm has a market capitalization of $28.10 billion, a price-to-earnings ratio of 23.81, a P/E/G ratio of 2.53 and a beta of 1.28. The stock’s fifty day simple moving average is $110.18 and its 200 day simple moving average is $107.28. The company has a debt-to-equity ratio of 2.15, a quick ratio of 1.36 and a current ratio of 1.39. NetApp has a 52 week low of $93.69 and a 52 week high of $143.65.
NetApp News Summary
- Positive Sentiment: NetApp posted fiscal Q4 2026 results that topped revenue expectations, with revenue of $1.95 billion versus the $1.87 billion consensus. Article Title
- Positive Sentiment: The company issued upbeat guidance for Q1 2027, with EPS guidance of 2.05-2.15 and revenue guidance of $1.8 billion-$1.9 billion, both above Wall Street estimates.
- Positive Sentiment: NetApp also raised full-year FY 2027 guidance to EPS of 8.70-9.00 and revenue of $7.3 billion-$7.6 billion, ahead of consensus.
- Positive Sentiment: The board authorized a new $1.0 billion share repurchase program, which can help support earnings per share and signals confidence in cash generation. Article Title
- Neutral Sentiment: Despite the strong report, the quarter was mixed on profitability versus expectations: EPS came in below consensus in one third-party summary, which may be creating some volatility around the results. Article Title
- Neutral Sentiment: Recent analyst commentary remains mixed, with at least one underweight rating still on the stock, even as price targets have been revised higher by some firms.
- Negative Sentiment: Some market coverage notes that NTAP has faced concerns around slower IT spending and cloud-related pressure, which may limit upside if the outlook cools later in the year. Article Title
Analyst Upgrades and Downgrades
NTAP has been the topic of several recent analyst reports. JPMorgan Chase & Co. lowered shares of NetApp from an “overweight” rating to a “neutral” rating and lowered their price objective for the stock from $125.00 to $110.00 in a research note on Thursday, April 16th. Weiss Ratings cut NetApp from a “buy (b-)” rating to a “hold (c+)” rating in a report on Friday, March 13th. Wall Street Zen lowered NetApp from a “buy” rating to a “hold” rating in a research note on Sunday, April 19th. Wedbush reaffirmed a “neutral” rating and issued a $115.00 price objective on shares of NetApp in a research report on Wednesday, February 25th. Finally, Citigroup lowered NetApp from a “neutral” rating to a “mixed” rating in a report on Thursday, May 14th. One analyst has rated the stock with a Strong Buy rating, four have given a Buy rating and eight have issued a Hold rating to the company’s stock. According to MarketBeat.com, NetApp has an average rating of “Hold” and an average target price of $122.27.
Check Out Our Latest Report on NTAP
Insider Transactions at NetApp
In other NetApp news, EVP Elizabeth M. O’callahan sold 1,000 shares of the firm’s stock in a transaction on Monday, May 11th. The stock was sold at an average price of $117.73, for a total transaction of $117,730.00. Following the transaction, the executive vice president owned 18,382 shares in the company, valued at $2,164,112.86. This trade represents a 5.16% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CAO Lorenzo Daniel De sold 275 shares of the company’s stock in a transaction dated Monday, May 18th. The stock was sold at an average price of $120.00, for a total transaction of $33,000.00. Following the sale, the chief accounting officer directly owned 1,090 shares of the company’s stock, valued at $130,800. This represents a 20.15% decrease in their position. The SEC filing for this sale provides additional information. In the last three months, insiders sold 3,275 shares of company stock valued at $347,650. 0.28% of the stock is currently owned by company insiders.
Institutional Trading of NetApp
Hedge funds have recently made changes to their positions in the company. Sivia Capital Partners LLC bought a new position in shares of NetApp in the 2nd quarter worth about $315,000. Atlas Capital Advisors Inc. acquired a new position in shares of NetApp during the fourth quarter worth approximately $86,000. Transamerica Financial Advisors LLC lifted its stake in shares of NetApp by 16.8% in the fourth quarter. Transamerica Financial Advisors LLC now owns 833 shares of the data storage provider’s stock valued at $89,000 after buying an additional 120 shares in the last quarter. Litman Gregory Wealth Management LLC acquired a new position in NetApp during the 4th quarter valued at about $194,000. Finally, HM Payson & Co. boosted its position in shares of NetApp by 235.1% during the fourth quarter. HM Payson & Co. now owns 640 shares of the data storage provider’s stock valued at $69,000 after buying an additional 449 shares during the last quarter. 92.17% of the stock is owned by institutional investors and hedge funds.
About NetApp
NetApp, Inc (NASDAQ: NTAP) is a data management and storage company that delivers hybrid cloud data services for applications and data. Founded in 1992 as Network Appliance and rebranded as NetApp in 2008, the company is headquartered in Sunnyvale, California. NetApp’s offering focuses on enabling organizations to store, manage, protect and move data across on-premises environments and major public clouds.
The company’s product portfolio centers on the ONTAP data management software and a range of storage systems and services built around it.
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