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NetApp Piotroski F-Score

: 7 (As of Today)
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Good Sign:

Piotroski F-Score is 7, indicating very healthy situation.

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

NetApp has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

NAS:NTAP' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Med: 6   Max: 9
Current: 7

4
9

During the past 13 years, the highest Piotroski F-Score of NetApp was 9. The lowest was 4. And the median was 6.


NetApp Piotroski F-Score Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

NetApp Annual Data
Apr11 Apr12 Apr13 Apr14 Apr15 Apr16 Apr17 Apr18 Apr19 Apr20
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.00 7.00 6.00 7.00 6.00

NetApp Quarterly Data
Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 8.00 7.00 7.00 6.00 7.00

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


NetApp Piotroski F-Score Distribution

* The bar in red indicates where NetApp's Piotroski F-Score falls into.


How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Jul20) TTM:Last Year (Jul19) TTM:
Net Income was 243 + 277 + 196 + 77 = $793 Mil.
Cash Flow from Operations was -53 + 420 + 383 + 240 = $990 Mil.
Revenue was 1371 + 1404 + 1401 + 1303 = $5,479 Mil.
Gross Profit was 925 + 941 + 941 + 872 = $3,679 Mil.
Average Total Assets from the begining of this year (Jul19)
to the end of this year (Jul20) was
(7811 + 7472 + 7483 + 7522 + 8416) / 5 = $7740.8 Mil.
Total Assets at the begining of this year (Jul19) was $7,811 Mil.
Long-Term Debt & Capital Lease Obligation was $2,720 Mil.
Total Current Assets was $4,817 Mil.
Total Current Liabilities was $2,976 Mil.
Net Income was 241 + 249 + 396 + 103 = $989 Mil.

Revenue was 1517 + 1563 + 1592 + 1236 = $5,908 Mil.
Gross Profit was 974 + 982 + 1026 + 816 = $3,798 Mil.
Average Total Assets from the begining of last year (Jul18)
to the end of last year (Jul19) was
(8905 + 8551 + 8418 + 8741 + 7811) / 5 = $8485.2 Mil.
Total Assets at the begining of last year (Jul18) was $8,905 Mil.
Long-Term Debt & Capital Lease Obligation was $1,245 Mil.
Total Current Assets was $4,516 Mil.
Total Current Liabilities was $3,175 Mil.

*Note: If the latest quarterly/semi-annual/annual total assets data is 0, then we will use previous quarterly/semi-annual/annual data for all the items in the balance sheet.

Profitability

Question 1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by Total Assets at the beginning of the year.

Score 1 if positive, 0 if negative.

NetApp's current Net Income (TTM) was 793. ==> Positive ==> Score 1.

Question 2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by Total Assets at the beginning of the year.

Score 1 if positive, 0 if negative.

NetApp's current Cash Flow from Operations (TTM) was 990. ==> Positive ==> Score 1.

Question 3. Change in Return on Assets

Compare this year's return on assets (1) to last year's return on assets.

Score 1 if it's higher, 0 if it's lower.

ROA (This Year)=Net Income/Total Assets (Jul19)
=793/7811
=0.10152349

ROA (Last Year)=Net Income/Total Assets (Jul18)
=989/8905
=0.1110612

NetApp's return on assets of this year was 0.10152349. NetApp's return on assets of last year was 0.1110612. ==> Last year is higher ==> Score 0.

Question 4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA <= ROA.

NetApp's current Net Income (TTM) was 793. NetApp's current Cash Flow from Operations (TTM) was 990. ==> 990 > 793 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. Change in Gearing or Leverage

Compare this year's gearing (long-term debt divided by average total assets) to last year's gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Jul20)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Jul19 to Jul20
=2720/7740.8
=0.35138487

Gearing (Last Year: Jul19)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Jul18 to Jul19
=1245/8485.2
=0.14672606

NetApp's gearing of this year was 0.35138487. NetApp's gearing of last year was 0.14672606. ==> Last year is lower than this year ==> Score 0.

Question 6. Change in Working Capital (Liquidity)

Compare this year's current ratio (current assets divided by current liabilities) to last year's current ratio.

Score 1 if this year's current ratio is higher, 0 if it's lower

Current Ratio (This Year: Jul20)=Total Current Assets/Total Current Liabilities
=4817/2976
=1.61861559

Current Ratio (Last Year: Jul19)=Total Current Assets/Total Current Liabilities
=4516/3175
=1.4223622

NetApp's current ratio of this year was 1.61861559. NetApp's current ratio of last year was 1.4223622. ==> This year's current ratio is higher. ==> Score 1.

Question 7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

NetApp's number of shares in issue this year was 222. NetApp's number of shares in issue last year was 243. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

Efficiency

Question 8. Change in Gross Margin

Compare this year's gross margin (Gross Profit divided by sales) to last year's.

Score 1 if this year's gross margin is higher, 0 if it's lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=3679/5479
=0.6714729

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=3798/5908
=0.64285714

NetApp's gross margin of this year was 0.6714729. NetApp's gross margin of last year was 0.64285714. ==> This year's gross margin is higher. ==> Score 1.

Question 9. Change in asset turnover

Compare this year's asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year's asset turnover ratio.

Score 1 if this year's asset turnover ratio is higher, 0 if it's lower

Asset Turnover (This Year)=Revenue/Total Assets at the Beginning of This Year (Jul19)
=5479/7811
=0.70144668

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Jul18)
=5908/8905
=0.6634475

NetApp's asset turnover of this year was 0.70144668. NetApp's asset turnover of last year was 0.6634475. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+0+1+0+1+1+1+1
=7

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

NetApp has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

NetApp  (NAS:NTAP) Piotroski F-Score Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


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