NetApp Shares Plunge 11% on Q2 Revenue Miss & Disappointing Guidance

NetApp (NASDAQ:NTAP) issued a lukewarm forecast for the current quarter, undercutting an otherwise strong finish to its fiscal year.

The data storage and management firm wrapped up its fiscal fourth quarter with adjusted earnings of $1.93 per share, edging past analyst estimates. Revenue for the quarter rose 4% year-over-year to $1.73 billion, just ahead of Wall Street expectations.

Despite these solid results, investor sentiment turned negative following guidance for the upcoming quarter that fell short of forecasts. NetApp projected earnings in the range of $1.48 to $1.58 per share on revenue between $1.46 billion and $1.61 billion—both ranges landing below analyst consensus.

Still, the company closed fiscal 2025 on a high note, posting record annual revenue of $6.57 billion and an all-time high in non-GAAP operating profit at $1.86 billion. Operating margins reached 28%, highlighting efficiency gains. However, the cautious near-term outlook weighed heavier on investor confidence than the company’s full-year achievements.

• The consensus target price for NetApp, Inc. (NASDAQ:NTAP) has decreased over the past year, indicating a more conservative outlook from analysts.
• Despite ongoing demand uncertainty and tariff risks, NetApp is considered better positioned to navigate these challenges.
• Recent earnings estimate revisions suggest a cautious sentiment among analysts, with no expected price increase in the near term.

NetApp, Inc. (NASDAQ:NTAP) is a prominent player in the technology sector, specializing in cloud-led and data-centric services. The company offers a variety of software and infrastructure solutions designed to manage and share data across different environments. NetApp competes with other major hardware companies like Hewlett-Packard, as highlighted by JP Morgan analyst Samik Chatterjee.

Over the past year, the consensus target price for NTAP has seen a downward trend. Last month, the average target price was $106, reflecting a more conservative outlook from analysts. This shift may be influenced by ongoing demand uncertainty and renewed tariff risks, as noted by Chatterjee. Despite these challenges, NetApp is considered better positioned to navigate these tariff headwinds.

A few months ago, the average target price for NTAP was higher at $118, indicating more optimism about the company's prospects. However, the recent earnings estimate revisions suggest that there may not be a further price increase in the near term. Analyst Ananda Baruah from Loop Capital Markets has set a price target of $100 for the stock, aligning with the more cautious sentiment.

Last year, the average target price was even higher at $128.25, showing a significant decrease in the consensus target price over the past year. This decline may reflect changes in market conditions or company performance. Despite a recent 13.1% surge in NTAP's stock price, the trading volume exceeded the average, suggesting heightened investor interest.

Investors should consider these changes in target prices alongside other financial metrics and company news to make informed investment decisions. The downward trend in target prices, coupled with the current market conditions, highlights the importance of staying updated on analyst insights and company performance.

NetApp (NASDAQ:NTAP) faced a sharp decline intra-day today, tumbling over 16% following its fiscal third-quarter earnings report. Despite narrowly surpassing earnings expectations, the data storage company’s revenue fell short of analyst projections, and its forward guidance failed to inspire confidence.

For the quarter, NetApp reported adjusted earnings of $1.91 per share, marginally exceeding the consensus estimate of $1.90. However, revenue came in at $1.64 billion, missing the anticipated $1.69 billion mark.

Investor concerns deepened as the company issued a lackluster forecast for the fourth quarter. NetApp projected adjusted earnings between $1.84 and $1.94 per share on revenue ranging from $1.65 billion to $1.80 billion. This guidance lagged behind Wall Street’s expectations of $1.99 EPS and $1.765 billion in revenue.

The full-year fiscal 2025 outlook also fell below analyst estimates. NetApp now anticipates adjusted EPS of $7.17 to $7.27 with revenue between $6.49 billion and $6.64 billion, trailing projections of $7.33 EPS and $6.67 billion in revenue. The combination of revenue underperformance and cautious forward-looking estimates weighed heavily on investor sentiment, driving the stock’s plunge.

NetApp (NASDAQ:NTAP) faced a sharp decline intra-day today, tumbling over 16% following its fiscal third-quarter earnings report. Despite narrowly surpassing earnings expectations, the data storage company’s revenue fell short of analyst projections, and its forward guidance failed to inspire confidence.

For the quarter, NetApp reported adjusted earnings of $1.91 per share, marginally exceeding the consensus estimate of $1.90. However, revenue came in at $1.64 billion, missing the anticipated $1.69 billion mark.

Investor concerns deepened as the company issued a lackluster forecast for the fourth quarter. NetApp projected adjusted earnings between $1.84 and $1.94 per share on revenue ranging from $1.65 billion to $1.80 billion. This guidance lagged behind Wall Street’s expectations of $1.99 EPS and $1.765 billion in revenue.

The full-year fiscal 2025 outlook also fell below analyst estimates. NetApp now anticipates adjusted EPS of $7.17 to $7.27 with revenue between $6.49 billion and $6.64 billion, trailing projections of $7.33 EPS and $6.67 billion in revenue. The combination of revenue underperformance and cautious forward-looking estimates weighed heavily on investor sentiment, driving the stock’s plunge.

NetApp (NASDAQ:NTAP) shares climbed around 5% pre-market today following the release of fiscal second-quarter results that exceeded Wall Street expectations and included an optimistic outlook.

The company reported adjusted earnings of $1.87 per share for the quarter, surpassing the analyst consensus of $1.78. Revenue increased by 6% year-over-year to $1.66 billion, slightly ahead of the $1.64 billion forecast.

NetApp’s strong performance was fueled by robust demand for its all-flash array storage systems, which achieved a 19% year-over-year increase in annualized net revenue run rate, reaching a record $3.8 billion. Additionally, its first-party and marketplace cloud storage services delivered impressive 43% growth over the prior year.

For the current quarter, NetApp projected adjusted earnings of $1.85 to $1.95 per share on revenue ranging from $1.61 billion to $1.76 billion. The midpoint of the EPS forecast exceeded the Street consensus estimate of $1.85.

The company also raised its full-year fiscal 2025 outlook, now expecting adjusted earnings between $7.20 and $7.40 per share on revenue of $6.54 billion to $6.74 billion.

NetApp (NASDAQ:NTAP) shares climbed around 5% pre-market today following the release of fiscal second-quarter results that exceeded Wall Street expectations and included an optimistic outlook.

The company reported adjusted earnings of $1.87 per share for the quarter, surpassing the analyst consensus of $1.78. Revenue increased by 6% year-over-year to $1.66 billion, slightly ahead of the $1.64 billion forecast.

NetApp’s strong performance was fueled by robust demand for its all-flash array storage systems, which achieved a 19% year-over-year increase in annualized net revenue run rate, reaching a record $3.8 billion. Additionally, its first-party and marketplace cloud storage services delivered impressive 43% growth over the prior year.

For the current quarter, NetApp projected adjusted earnings of $1.85 to $1.95 per share on revenue ranging from $1.61 billion to $1.76 billion. The midpoint of the EPS forecast exceeded the Street consensus estimate of $1.85.

The company also raised its full-year fiscal 2025 outlook, now expecting adjusted earnings between $7.20 and $7.40 per share on revenue of $6.54 billion to $6.74 billion.

• NetApp Inc. (NASDAQ:NTAP) reported an earnings per share (EPS) of $1.87, exceeding the estimated $1.78 and marking a significant year-over-year improvement.
• The company's revenue reached $1.66 billion, surpassing both the estimated $1.65 billion and the previous year's figure, showcasing strong market demand.
• NetApp has raised its profit and revenue forecast for fiscal year 2025, indicating a positive outlook driven by the integration of artificial intelligence in cloud platforms.

NetApp Inc. (NASDAQ:NTAP), a leading enterprise in the data storage industry, supports major cloud platforms like Amazon Web Services, Microsoft Azure, and Google Cloud. Operating within the Zacks Computer-Storage Devices industry, NetApp demonstrates a strong market presence and competitive edge. The company's recent financial performance highlights its robust growth trajectory and operational success.

On November 21, 2024, NetApp reported an EPS of $1.87, surpassing the estimated $1.78. This performance also exceeded the Zacks Consensus Estimate of $1.79, marking a 4.47% earnings surprise. Compared to the same quarter last year, where EPS was $1.58, this represents a significant improvement. Over the past four quarters, NetApp has outperformed consensus EPS estimates three times, highlighting its consistent financial strength.

NetApp's revenue for the quarter ending October 2024 reached $1.66 billion, slightly above the estimated $1.65 billion. This figure also exceeded the Zacks Consensus Estimate by 0.79% and marked an increase from the $1.56 billion reported in the same period last year. The company has consistently surpassed consensus revenue estimates in each of the last four quarters, reflecting its strong market demand and effective business strategies.

Following the positive fiscal second-quarter results, NetApp's stock experienced a rise, as reported by Investor's Business Daily. The company has increased its profit and revenue forecast for fiscal year 2025, driven by strong demand for data storage services. This demand is largely due to enterprises integrating artificial intelligence into their cloud platforms, which has been advantageous for NetApp. The company now anticipates adjusted EPS for 2025 to be between $7.20 and $7.40, with an annual revenue forecast of $6.54 billion to $6.74 billion.

NetApp's financial metrics provide further insight into its market valuation and financial health. The company's price-to-earnings (P/E) ratio is approximately 24.05, while the price-to-sales ratio stands at about 4.07. The enterprise value to sales ratio is around 4.22, and the enterprise value to operating cash flow ratio is approximately 17.13. Additionally, NetApp's earnings yield is about 4.16%, and the debt-to-equity ratio is approximately 2.58. The current ratio is around 0.96, indicating the company's ability to cover short-term liabilities with short-term assets.