JPMorgan has revised its price target for NetApp (NTAP, Financial), reducing it from $120 to $115, while maintaining an Overweight rating on the stock. The decision follows NetApp's impressive results in its fiscal fourth quarter, where the company achieved record-breaking revenue, operating profits, and earnings. This success was attributed to significant market share gains and substantial growth in the Public Cloud segment.
Despite these achievements, NetApp’s fiscal 2026 revenue projection, indicating a nearly 3% year-over-year increase, fell short of industry consensus. The company's cautious outlook aligns with trends seen among other enterprise suppliers, reflecting macroeconomic uncertainties such as tariffs and challenges posed by public sector exposure.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for NetApp Inc (NTAP, Financial) is $116.02 with a high estimate of $150.00 and a low estimate of $100.00. The average target implies an upside of 16.95% from the current price of $99.21. More detailed estimate data can be found on the NetApp Inc (NTAP) Forecast page.
Based on the consensus recommendation from 22 brokerage firms, NetApp Inc's (NTAP, Financial) average brokerage recommendation is currently 2.6, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for NetApp Inc (NTAP, Financial) in one year is $90.30, suggesting a downside of 8.98% from the current price of $99.21. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the NetApp Inc (NTAP) Summary page.
NTAP Key Business Developments
Release Date: May 29, 2025
- Total Revenue (Q4): $1.73 billion, up 4% year over year and 6% sequentially.
- Billings (Q4): $2.03 billion, up 12% year over year.
- Hybrid Cloud Revenue (Q4): $1.57 billion, up 3% year over year.
- Product Revenue (Q4): $845 million, up 5% year over year.
- Support Revenue (Q4): $625 million, flat year over year.
- Professional Services Revenue (Q4): $98 million, up 13% year over year.
- Public Cloud Revenue (Q4): $164 million, up 8% year over year; 22% growth excluding divested Spot business.
- Deferred Revenue (FY25): $4.54 billion, up 7% year over year.
- Gross Margin (Q4): 69.5% consolidated; 68.4% Hybrid Cloud; 55.4% Product; 92.3% Support; 79.3% Public Cloud.
- Operating Margin (Q4): 28.6%, up 50 basis points year over year.
- EPS (Q4): $1.93, up 7% year over year.
- Cash Flow from Operations (Q4): $675 million.
- Free Cash Flow (Q4): $640 million.
- Shareholder Returns (Q4): $355 million returned, including $250 million in share repurchases and $105 million in cash dividends.
- Total Revenue (FY25): $6.57 billion, up 5% year over year.
- Billings (FY25): $6.78 billion, up 8% year over year.
- Operating Margin (FY25): 28.3%, up 150 basis points year over year.
- EPS (FY25): Grew 12% year over year.
- Operating Cash Flow (FY25): $1.51 billion.
- Free Cash Flow (FY25): $1.34 billion.
- Cash and Short-term Investments (FY25): $3.85 billion.
- Total Debt (FY25): $3.24 billion.
- Net Cash Position (FY25): Approximately $610 million.
- Revenue Guidance (FY26): $6.625 billion to $6.875 billion, implying 3% growth year over year.
- EPS Guidance (FY26): $7.60 to $7.90.
- Revenue Guidance (Q1 FY26): $1.455 billion to $1.605 billion.
- EPS Guidance (Q1 FY26): $1.48 to $1.58.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NetApp Inc (NTAP, Financial) achieved record revenue for the fourth quarter and fiscal year 2025, driven by strong growth in all-flash storage and marketplace storage services.
- The company reached all-time highs for gross profit, operating profit, operating margin, and EPS in FY25, showcasing its ability to navigate a dynamic environment.
- All-flash array annualized revenue run rate grew 14% from Q4 a year ago to a record $4.1 billion, with significant market share gains.
- First-party and marketplace cloud storage services grew 44% year over year in the fourth quarter, contributing to a 22% growth in Public Cloud segment revenue.
- NetApp Inc (NTAP) closed approximately 150 AI infrastructure and data lake modernization deals in Q4, demonstrating strong momentum in the AI market.
Negative Points
- The global macroeconomic outlook remains uncertain, with a general slowdown in growth, lingering inflation concerns, and increased spending caution.
- NetApp Inc (NTAP) expects some increased spending caution in the US public sector and EMEA, impacting its outlook for fiscal year 2026.
- The company is incorporating caution in its FY26 outlook due to geopolitical uncertainties and potential impacts from tariffs.
- Q1 revenue guidance implies a decline of 1% year over year, reflecting a cautious approach to the uncertain macro environment.
- The divestiture of the Spot business is expected to impact reported Public Cloud and total revenue growth for fiscal year 2026.
