NetApp's Best Hope Is Probably Its Wallet
Stephen Simpson, CFA
Stephen Simpson, CFA
Today, 9:22 AM
- Analyst Kulbinder Garcha lowers from Neutral and modifies target slightly from $30 to $29 (current price $35.40).
- Points out recent execution, though views secular strain continuing, noting NetApp (NASDAQ:NTAP) could remain vulnerable to smaller players seizing market share and an overall disruption by the transition to public cloud.
Thu, Nov. 17, 10:23 AM
- Yesterday: NetApp +10%; Q2 actual, Q3 EPS guide over consensus
- Analyst Simona Jankowski, though recognizing improvement, retains NetApp (NTAP +9.4%) at Neutral due to sharp competition straining Product segment gross margins (48.2% vs. 51.8% Y/Y).
- Raises FY 2017 EPS projection from $2.35 to $2.65 (consensus $2.37) and price target from $32 to $36 (current price $38.12).
- Further analyst commentary
Thu, Nov. 17, 9:20 AM
- Gainers: RLOG +121%. SINO +99%. GSL +94%. DCIX +32%. NMM +32%. ESEA +24%. TOPS +22%. WNR +22%. NM +22%. NAO +19%. SB +18%. ANW +17%. PANL +16%. SHIP +12%. NTAP +12%. HAIN +11%. GLBS +11%. UAM +11%. GURE +10%. PLCE +8%. NNA 8%. BBY 8%. INCY 6%. RCON 6%. PLUG 6%. GNK 6%. ENDP 6%.
- Losers: LEI -26%. VUZI -18%. SPP -18%. NVTA -14%. FSLR -12%. ZX -10%. TEGP -10%. SSI -9%. STEM -8%. FOXF -8%. TTMI -7%. PFGC -6%.
Wed, Nov. 16, 5:36 PM
Wed, Nov. 16, 4:38 PM
- Results – revenue $1.34B (-7.6% Y/Y, $20M below estimates), EPS $0.60 ($0.06 above estimates), net income $169M (vs. $181M Y/Y), cash, cash equivalents and investments $4.4B, cash from operations $158M, share repurchases and dividends $169M
- Highlights – all flash array annualized net revenue run rate over $1B, shipped flash over 200 petabytes, Clustered Data ONTAP deployed on 86% of shipped systems
- Segment revenues – Product $710M (vs. $815M Y/Y), Software maintenance $242M (vs. $233M Y/Y), Hardware maintenance and other services $388M (vs. $397M Y/Y)
- Dividend – $0.19 per share, payable January 25, 2017 to shareholders on record January 6, 2017
- Q3 projections – revenue $1.325B-$1.475B (consensus $1.36B), EPS $0.72-$0.77 (consensus $0.65)
- NetApp (NASDAQ:NTAP) CEO George Kurian: "Our second quarter results are evidence of our ability to maintain a high level of execution while streamlining the business and pivoting to the growth areas of the market. Our market-leading innovations in flash, next-generation data centers and hybrid cloud, coupled with a sharp focus on operational discipline, position NetApp to lead in the digital era."
- Historical supplementary commentary
- Prior quarters overview
- Earnings summary
- Conference call
- Press release
Wed, Nov. 16, 4:02 PM
Tue, Nov. 15, 5:35 PM
Fri, Nov. 11, 4:12 PM
- Analyst Katy Huberty notes 37% of Apple's (NASDAQ:AAPL) market capitalization, or $216B, is held overseas and should a prospective 10% repatriation allowance occur, the company could save $54B in tax expense if it chooses to bring that sum back onshore.
- Should the theorized scenario play out, shareholder returns, debt reduction, substantial M&A and a combination of all of the above are cited to be on the table. Further notes, "It would likely also remove an overhang on the stock that has been in place for many years."
- Additionally identifies other potential beneficiaries on the hypothesis including NetApp (NASDAQ:NTAP), with 43% of its market capitalization offshore, Hewlett Packard Enterprise (NYSE:HPE), at 26%, HP (NYSE:HPQ), at 21%, Western Digital (NYSE:WDC), at 17%, and IBM (NYSE:IBM), at 6%. Does, however, also consider levels of international revenue exposure and the impact other forthcoming policies could have on these names, graphing out some related percentages in a model displayed here.
Wed, Oct. 5, 8:20 AM
Fri, Sep. 30, 12:10 PM
- In what continues a trend of positive first-day trading momentum already realized in this year's Acacia Communications, Twilio, Line, Talend, Apptio and other offerings.
- Initial price of $16 (+91.1%%), above originally expected range of $13-$15.
- Proceeds of raise approximately $238M.
- Nutanix (NTNX N/A) competes in various ways with EMC/VMware (DVMT +0.6%), Hewlett Packard Enterprise (HPE -0.5%), NetApp (NTAP +3.1%), Nimble Storage (NMBL +0.8%), Pure Storage (PSTG +0.4%) and others.
Fri, Sep. 30, 9:50 AM
- Firm moves to Buy rating from prior Sell.
- Analyst Srini Nandury: "We are convinced that the company is on the right track and we believe estimates have bottomed and NetApp can grow its product revenue from current levels. NetApp now has the products and discipline to follow through on the strategy it has embarked upon.”
- Price target on NetApp (NTAP +2.2%) raised from $30 to $45 (current price $35.57).
Mon, Sep. 26, 5:14 PM
- Analyst Sherri Scribner attributes to the call availability of more efficient storage, increased industry data reduction, disproportionate legacy system sales and a shift by major cloud providers to hyper-converged infrastructure.
- Price target set at $25 (current price $35.18).
- NetApp (NASDAQ:NTAP) shares closed today lower by 1.35%.
Mon, Sep. 12, 9:24 AM
- The Wall Street Journal takes a look at the rise in use of and revenue derived from flash-based storage products over recent years.
- Pure Storage (NYSE:PSTG) and Nimble Storage (NYSE:NMBL) are highlighted with respective 9,650% and 641% annual revenue increases from 2013 to the present trailing 12 months period.
- The examination, however, cites a 20% decrease in share price for Pure Storage on the year with a 9% lower price for Nimble Storage over the same term. Competition in the enterprise data storage space, particularly in regard to flash solutions, is cited as becoming increasingly tight as demand for more efficient data centers continues to rise.
- Flash arrays offered by competitors EMC (NYSE:DVMT), IBM (IBM), NetApp (NASDAQ:NTAP), Hewlett Packard Enterprise (NYSE:HPE), Hitachi, Oracle (NASDAQ:ORCL) and others are expanding onto the market and subsequently heightening pricing pressure within it.
- Despite a competitive strain, the report goes on to assert current downcast valuations for small players in the area, especially Pure and Nimble, could pose appealing buyout opportunities going forward.
Wed, Aug. 24, 11:11 AM
- Last week, Goldman Sachs analyst Simona Jankowski noted competitive pricing pressure in reissuing a Sell rating on NetApp (NTAP -0.1%). She had, though, raised her price target to $26 from $23 (current price $34.91).
- Today, Jankowski offers a "more positive view", citing progress in an all-flash transition, strategic product portfolio trend improvement, and continued cost of goods sold and operating expense reductions. She further remains cautious on an enterprise storage market she considers challenging, though now upgrades from Sell to Neutral, with a new price target of $32.
- NetApp is up over 20% since reporting better-than-expected Q1 results last Wednesday.
Thu, Aug. 18, 3:00 PM
Thu, Aug. 18, 12:47 PM