NetApp (NTAP) Exceeds Market Returns: Some Facts to Consider

NetApp (NTAP) ended the recent trading session at $178.50, demonstrating a +2.6% change from the preceding day's closing price. The stock outperformed the S&P 500, which registered a daily gain of 0.7%. Elsewhere, the Dow saw an upswing of 0.53%, while the tech-heavy Nasdaq appreciated by 1%.

The data storage company's stock has climbed by 12.85% in the past month, exceeding the Computer and Technology sector's loss of 6.59% and the S&P 500's loss of 0.49%.

The investment community will be paying close attention to the earnings performance of NetApp in its upcoming release. The company is forecasted to report an EPS of $2.11, showcasing a 36.13% upward movement from the corresponding quarter of the prior year. In the meantime, our current consensus estimate forecasts the revenue to be $1.83 billion, indicating a 17.61% growth compared to the corresponding quarter of the prior year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $8.88 per share and revenue of $7.49 billion, which would represent changes of +9.23% and +8.14%, respectively, from the prior year.

Investors should also pay attention to any latest changes in analyst estimates for NetApp. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Currently, NetApp is carrying a Zacks Rank of #4 (Sell).

Looking at its valuation, NetApp is holding a Forward P/E ratio of 19.6. This signifies a premium in comparison to the average Forward P/E of 15.57 for its industry.

We can additionally observe that NTAP currently boasts a PEG ratio of 2.57. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. As the market closed yesterday, the Computer- Storage Devices industry was having an average PEG ratio of 1.51.

Story Continues

The Computer- Storage Devices industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 33, positioning it in the top 14% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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NetApp, Inc. (NTAP) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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