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NetApp: Cloud Software Driving Growth And Multiple Expansion

Apr. 11, 2021 10:20 AM ETNetApp, Inc. (NTAP)7 Comments


  • The Street continues to underappreciate NetApp's software business and ascribe more importance to the hardware business despite accounting for 25% of revenue.
  • Newer software offerings such as Astra (Kubernetes and container storage), SPOT compute optimization software, and cloud data services to drive growth.
  • We view the new NetApp as a software company more than a hardware company, given software and services revenue drives growth and profits.
  • NetApp continues to gain share in the All-Flash-Array market, and as businesses head back to offices, we expect on-prem storage sales to accelerate.
  • Estimates are conservative; compelling valuation, solid cash flow, a decent dividend payout, and an impending multiple expansion make NetApp a buy.

NetApp Headquarters Sunnyvale
Photo by JasonDoiy/iStock Unreleased via Getty Images

NetApp (NASDAQ:NTAP) is a buy since the company has one of the best on-premises storage portfolios and one of the best cloud storage portfolios in the industry. On top of this, NetApp's valuation is

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Analyst’s Disclosure: I am/we are long NTAP. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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