Streaking through the tech industry like a comet, NetApp’s NTAP stock has surged over +30% this year, boldly outpacing the S&P 500 and Nasdaq, which sit at +20%.
Specializing in storage and data management solutions, NetApp’s shares boast a Zacks Rank #1 (Strong Buy), crowning it the Bull of the Day.
With lucrative cloud computing partnerships illuminating its path, let’s delve deeper into why now could be the perfect moment to invest in NetApp’s stock.
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NetApp’s Relentless Performance
Demonstrated in the EPS surprise chart above, NetApp has consistently matched or surpassed the Zacks EPS Consensus for 18 straight quarters dating back to May of 2020.
Most recently, NetApp reported results for its fiscal first quarter in late August, revealing Q1 EPS of $1.56. This triumph surpassed estimates by almost 7% and surged 36% from $1.15 per share in the comparable quarter.
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NetApp’s Expansion in Cloud Services
Fueling NetApp’s robust financial standing is the growth of its cloud storage operations. Notably, NetApp’s revenue from the hybrid cloud segment surged 8% last quarter to reach $1.38 billion, blending on-premise infrastructure (private cloud) with public cloud services.
Moreover, NetApp’s high-performance file storage for enterprise workloads is extensively integrated into Microsoft’s MSFT Azure cloud ecosystem. The “Azure NetApp Files” have propelled NetApp’s influence and innovation, with its software also available in Amazon’s AMZN AWS Marketplace.
NetApp’s Promising Future Outlook
With a consistent uptrend in top line growth, NetApp’s total sales are anticipated to climb by 4% in its current fiscal 2025 and FY26, with estimates inching closer to a $7 billion threshold.
Even more promising, NetApp’s EPS is predicted to surge by 9% in FY25 and is forecasted to expand further by 6% in FY26 to reach $7.54 per share. Remarkably, earnings estimate revisions have notably increased in the last 30 days for both FY25 and FY26.
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NetApp: A Clear Winner
Rising earnings estimates signal that NetApp’s robust price performance may persist, with NTAP trading at a reasonable 17.5X forward earnings multiple.
Given the premium that cloud providers and other innovative tech firms can command, the current juncture seems ripe for investment. NetApp’s enhanced odds and fruitful cloud collaborations indicate that NTAP is not only a viable short-term endeavor but a compelling long-term venture.
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