NetApp (NASDAQ:NTAP – Get Free Report) announced its earnings results on Wednesday. The data storage provider reported $2.58 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $2.12 by $0.46, FiscalAI reports. The company had revenue of $2.02 billion for the quarter, compared to analyst estimates of $1.84 billion. NetApp had a return on equity of 127.57% and a net margin of 19.18%.NetApp’s quarterly revenue was up 29.9% on a year-over-year basis. During the same period in the prior year, the company posted $1.15 EPS. NetApp updated its FY 2027 guidance to 9.730-10.030 EPS and its Q2 2027 guidance to 2.540-2.640 EPS.
Here are the key takeaways from NetApp’s conference call:
- NetApp reported a record Q1, with revenue up 30% year over year to $2.03 billion, operating margin of 31.9%, and non-GAAP EPS up 66% to $2.58. Strong operating leverage converted broad-based demand into significant earnings growth.
- The company materially raised its fiscal 2027 outlook, now forecasting revenue of $7.975 billion-$8.225 billion and EPS of $9.73-$10.03; the midpoint implies 17% revenue growth and 22% EPS growth. Management cited durable demand across AI, modernization, cloud, customer segments, geographies, and product lines.
- AI and cloud momentum remained key growth drivers: all-flash array revenue rose 47% to $1.31 billion, public cloud revenue increased 28% to $206 million, and NetApp won approximately 350 AI and data-lake modernization deals. Management said deal sizes are expanding as customers move from AI proofs of concept to production workloads.
- Higher component costs and a greater product mix are pressuring profitability, with Q1 product gross margin falling sequentially to 54.6% and Q2 total gross margin guided down to 67%-68%. Inventory also increased sharply as NetApp secured supply, while management acknowledged that some Q1 demand reflected accelerated purchases and pricing benefits.
- NetApp acquired DataPelago to enhance in-place AI data processing and JetStream to strengthen cloud-native disaster recovery for VMware migrations. The acquisitions expand the platform’s AI and cloud capabilities, but their near-term financial contribution was not quantified.
NetApp Trading Up 2.6%
Shares of NTAP stock opened at $185.38 on Friday. The stock has a 50-day simple moving average of $178.07 and a 200 day simple moving average of $140.54. The stock has a market capitalization of $36.38 billion, a P/E ratio of 26.15, a P/E/G ratio of 2.46 and a beta of 1.44. NetApp has a fifty-two week low of $93.69 and a fifty-two week high of $209.06. The company has a quick ratio of 1.39, a current ratio of 1.44 and a debt-to-equity ratio of 1.84.
NetApp Announces Dividend
Insider Activity
In related news, EVP Elizabeth M. O’callahan sold 1,000 shares of the stock in a transaction dated Monday, August 10th. The stock was sold at an average price of $193.82, for a total value of $193,820.00. Following the completion of the sale, the executive vice president directly owned 30,297 shares of the company’s stock, valued at approximately $5,872,164.54. This represents a 3.20% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, President Cesar Cernuda sold 49,464 shares of the stock in a transaction dated Tuesday, June 23rd. The stock was sold at an average price of $154.82, for a total value of $7,658,016.48. Following the completion of the sale, the president directly owned 46,806 shares of the company’s stock, valued at approximately $7,246,504.92. This represents a 51.38% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders sold 55,072 shares of company stock valued at $8,719,520. Corporate insiders own 0.36% of the company’s stock.
Institutional Trading of NetApp
Institutional investors have recently made changes to their positions in the stock. Geneos Wealth Management Inc. increased its stake in NetApp by 38.3% in the 1st quarter. Geneos Wealth Management Inc. now owns 759 shares of the data storage provider’s stock valued at $67,000 after buying an additional 210 shares during the period. Sivia Capital Partners LLC purchased a new position in shares of NetApp during the 2nd quarter valued at $315,000. Cerity Partners LLC increased its stake in shares of NetApp by 9.9% in the second quarter. Cerity Partners LLC now owns 46,792 shares of the data storage provider’s stock worth $4,986,000 after acquiring an additional 4,232 shares during the last quarter. Bank of Nova Scotia raised its holdings in shares of NetApp by 7.3% during the second quarter. Bank of Nova Scotia now owns 24,301 shares of the data storage provider’s stock worth $2,589,000 after acquiring an additional 1,662 shares in the last quarter. Finally, NewEdge Advisors LLC boosted its position in NetApp by 12.7% during the second quarter. NewEdge Advisors LLC now owns 20,161 shares of the data storage provider’s stock valued at $2,148,000 after purchasing an additional 2,277 shares during the last quarter. 92.17% of the stock is currently owned by institutional investors and hedge funds.
Wall Street Analyst Weigh In
A number of analysts recently issued reports on NTAP shares. TD Cowen restated a “buy” rating and issued a $200.00 price target on shares of NetApp in a research note on Thursday. Argus increased their price objective on shares of NetApp from $130.00 to $200.00 and gave the company a “buy” rating in a research note on Monday, June 1st. Evercore set a $210.00 price objective on shares of NetApp in a report on Monday, August 24th. Weiss Ratings raised shares of NetApp from a “hold (c+)” rating to a “buy (b-)” rating in a research report on Monday, June 8th. Finally, Wedbush upped their target price on shares of NetApp from $150.00 to $170.00 and gave the company a “neutral” rating in a research note on Thursday. Six analysts have rated the stock with a Buy rating and ten have given a Hold rating to the company’s stock. According to data from MarketBeat, the company has a consensus rating of “Hold” and a consensus price target of $192.07.
Read Our Latest Report on NTAP
Trending Headlines about NetApp
Here are the key news stories impacting NetApp this week:
- Positive Sentiment: NetApp reported record fiscal Q1 revenue of approximately $2.03 billion, up nearly 30% year over year, while adjusted EPS of $2.58 exceeded the roughly $2.12 analyst consensus. All-flash array revenue rose 47% to $1.31 billion, and public-cloud revenue increased 28% to $206 million. NetApp Q1 Earnings and Revenues Top Estimates on AI and All-Flash Strength
- Positive Sentiment: Management raised fiscal 2027 guidance to approximately $7.98 billion-$8.23 billion in revenue and $9.73-$10.03 in adjusted EPS, above consensus expectations. Second-quarter guidance also topped estimates, reflecting confidence in AI-related infrastructure upgrades, hybrid-cloud demand and flash storage adoption. NetApp Raises Fiscal 2027 Forecast
- Positive Sentiment: NetApp and Amazon Web Services expanded AWS Transform support for Amazon FSx for NetApp ONTAP, simplifying enterprise storage and database migrations. NetApp also announced ONTAP validation for VMware Cloud Foundation 9.1, strengthening its private- and hybrid-cloud positioning. NetApp and AWS Accelerate Storage Migrations
- Positive Sentiment: Analyst sentiment remains supportive in places: TD Cowen reaffirmed a Buy rating with a $200 target, while Morgan Stanley raised its target to $191 and Susquehanna lifted its target to $195. Goldman Sachs also maintained a $210 target and Buy view. NetApp Analysts Boost Forecasts
- Neutral Sentiment: NetApp declared a quarterly dividend of $0.52 per share, payable October 28 to shareholders of record October 9. The dividend provides ongoing shareholder returns but is unlikely to be the primary trading catalyst. NetApp Declares Dividend
- Negative Sentiment: The initial post-earnings selloff reflected weaker cash conversion and profitability concerns. Operating cash flow was $503 million and free cash flow was $401 million, while gross margin declined and management warned that second-quarter gross margin would fall sequentially as product mix and component costs pressure results. NetApp Tumbles on Free Cash Flow Decline
- Negative Sentiment: Analyst views are mixed at the stock’s elevated valuation. Citigroup cut its target to $190 and retained Neutral, while Wedbush raised its target to $170 but kept Neutral—below the recent trading level. This limits the potential upside perceived by more cautious investors.
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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