NasdaqGS:NTAP

Stock Analysis Report

Executive Summary

NetApp, Inc. provides software, systems, and services to manage and share data on-premises, and private and public clouds worldwide.

Snowflake

Fundamentals

Solid track record with adequate balance sheet.


Similar Companies

Share Price & News

How has NetApp's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

6.9%

NTAP

3.3%

US Tech

2.3%

US Market


1 Year Return

-31.8%

NTAP

5.3%

US Tech

5.6%

US Market

Return vs Industry: NTAP underperformed the US Tech industry which returned 5.3% over the past year.

Return vs Market: NTAP underperformed the US Market which returned 5.6% over the past year.


Shareholder returns

NTAPIndustryMarket
7 Day6.9%3.3%2.3%
30 Day-5.9%5.6%-1.0%
90 Day-10.4%12.8%-0.7%
1 Year-29.8%-31.8%7.1%5.3%7.9%5.6%
3 Year67.8%57.1%99.6%84.2%45.6%36.3%
5 Year47.8%32.1%124.3%101.5%65.8%47.6%

Price Volatility Vs. Market

How volatile is NetApp's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is NetApp undervalued compared to its fair value and its price relative to the market?

13.36x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: NTAP ($53.22) is trading above our estimate of fair value ($43.31)

Significantly Undervalued: NTAP is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: NTAP is good value based on its PE Ratio (13.4x) compared to the Tech industry average (20x).

PE vs Market: NTAP is good value based on its PE Ratio (13.4x) compared to the US market (17.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: NTAP is poor value based on its PEG Ratio (6.6x)


Price to Book Ratio

PB vs Industry: NTAP is overvalued based on its PB Ratio (14.7x) compared to the US Tech industry average (1.6x).


Next Steps

Future Growth

How is NetApp forecast to perform in the next 1 to 3 years based on estimates from 26 analysts?

2.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NTAP's forecast earnings growth (2% per year) is below the savings rate (2.7%).

Earnings vs Market: NTAP's earnings (2% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: NTAP's earnings are forecast to grow, but not significantly.

Revenue vs Market: NTAP's revenue (2.6% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: NTAP's revenue (2.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: NTAP's Return on Equity is forecast to be very high in 3 years time (163.1%).


Next Steps

Past Performance

How has NetApp performed over the past 5 years?

7.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: NTAP's earnings have grown by 7.9% per year over the past 5 years.

Accelerating Growth: NTAP's earnings growth over the past year (271.3%) exceeds its 5-year average (7.9% per year).

Earnings vs Industry: NTAP earnings growth over the past year (271.3%) exceeded the Tech industry 64%.


Return on Equity

High ROE: Whilst NTAP's Return on Equity (114.6%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets

ROA vs Industry: NTAP has a higher Return on Assets than the Tech industry average last year.


Return on Capital Employed

ROCE Improving: NTAP has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is NetApp's financial position?


Financial Position Analysis

Short Term Liabilities: NTAP's short term assets ($4.5B) exceeds its short term liabilities ($3.2B)

Long Term Liabilities: NTAP's short term assets (4.5B) exceeds its long term liabilities (3.8B)


Debt to Equity History and Analysis

Debt Level: NTAP's debt to equity ratio (182.5%) is considered high

Reducing Debt: NTAP's debt to equity ratio has increased from 39% to 182.5% over the past 5 years.

Debt Coverage: NTAP's debt is well covered by operating cash flow (84.1%).

Interest Coverage: NTAP earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: NTAP has a low level of unsold assets or inventory.

Debt Coverage by Assets: NTAP's debt is covered by short term assets (assets are 2.867300x debt).


Next Steps

Dividend

What is NetApp's current dividend yield, its reliability and sustainability?

3.61%

Current Dividend Yield


Dividend Yield vs Market

company3.6%marketbottom25%1.5%markettop25%3.8%industryaverage1.5%forecastin3Years3.9%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: NTAP's dividend (3.61%) is higher than the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: NTAP's dividend (3.61%) is low compared to the top 25% of dividend payers in the US market (3.76%).

Stable Dividend: Whilst dividend payments have been stable, NTAP has been paying a dividend for less than 10 years.

Growing Dividend: NTAP's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (42.2%), NTAP's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NTAP's dividends in 3 years are forecast to be well covered by earnings (46% payout ratio).


Next Steps

Management

What is the CEO of NetApp's salary, the management and board of directors tenure and is there insider trading?

3.2yrs

Average management tenure


CEO

George Kurian (52yo)

4.3yrs

Tenure

US$13,164,969

Compensation

Mr. George Kurian has been the Chief Executive Officer of NetApp, Inc. since June 1, 2015 and as its President since May 20, 2016. Mr. Kurian served as an Executive Vice President of Product Operations at  ...


CEO Compensation Analysis

Compensation vs. Market: George's total compensation ($USD13.16M) is about average for companies of similar size in the US market ($USD11.23M).

Compensation vs Earnings: George's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.2yrs

Average Tenure

52yo

Average Age

Experienced Management: NTAP's management team is considered experienced (3.2 years average tenure).


Board Age and Tenure

4.3yrs

Average Tenure

62yo

Average Age

Experienced Board: NTAP's board of directors are considered experienced (4.3 years average tenure).


Insider Trading

Insider Buying: NTAP insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$187,39422 Aug 19
Joel Reich
EntityIndividual
Shares3,963
Max PriceUS$47.29
SellUS$2,350,99025 Jun 19
Matthew Fawcett
EntityIndividual
Role
Chief Legal Officer
Senior VP
Shares38,195
Max PriceUS$61.55
SellUS$1,454,30220 Jun 19
Joel Reich
EntityIndividual
Shares23,650
Max PriceUS$61.49
SellUS$3,229,49804 Jun 19
Ronald Pasek
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares55,215
Max PriceUS$58.49
SellUS$1,685,22904 Jun 19
Joel Reich
EntityIndividual
Shares27,813
Max PriceUS$60.59

Ownership Breakdown


Management Team

  • Henri Richard (62yo)

    Executive Vice President of Worldwide Field & Customer Operations

    • Tenure: 3.4yrs
    • Compensation: US$5.91m
  • Bill Miller

    Senior VP & Chief Information Officer

    • Tenure: 3yrs
  • James Whitemore (54yo)

    VP & Interim Chief Marketing Officer

    • Tenure: 0.8yrs
  • Matt Fawcett (51yo)

    Senior VP

    • Tenure: 9.1yrs
    • Compensation: US$3.34m
  • Ron Pasek (58yo)

    Executive VP & CFO

    • Tenure: 3.5yrs
    • Compensation: US$5.51m
  • George Kurian (52yo)

    CEO, President & Director

    • Tenure: 4.3yrs
    • Compensation: US$13.16m
  • Debra McCowan (47yo)

    Senior VP & Chief Human Resources Officer

    • Tenure: 1yrs
  • Scott Allen (51yo)

    Senior VP & Chief Accounting Officer

    • Tenure: 0.2yrs
  • Jeff Bergmann

    Vice President of Corporate Finance

    • Tenure: 3.5yrs
    • Compensation: US$667.50k
  • Kris Newton

    VP of Corporate Communications & Investor Relations

    • Tenure: 1.8yrs

Board Members

  • George Shaheen (75yo)

    Independent Director

    • Tenure: 15.3yrs
    • Compensation: US$337.06k
  • Jerry Held (71yo)

    Independent Director

    • Tenure: 9.8yrs
    • Compensation: US$330.40k
  • Mike Nevens (69yo)

    Independent Chairman of the Board

    • Tenure: 4.3yrs
    • Compensation: US$435.40k
  • Kathy Hill (62yo)

    Independent Director

    • Tenure: 6.1yrs
    • Compensation: US$362.90k
  • Deborah Kerr (47yo)

    Independent Director

    • Tenure: 1.9yrs
    • Compensation: US$335.40k
  • George Kurian (52yo)

    CEO, President & Director

    • Tenure: 4.3yrs
    • Compensation: US$13.16m
  • Scott Schenkel (51yo)

    Independent Director

    • Tenure: 1.9yrs
    • Compensation: US$355.40k

Company Information

NetApp, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: NetApp, Inc.
  • Ticker: NTAP
  • Exchange: NasdaqGS
  • Founded: 1992
  • Industry: Technology Hardware, Storage and Peripherals
  • Sector: Tech
  • Market Cap: US$12.662b
  • Shares outstanding: 237.91m
  • Website: https://www.netapp.com

Number of Employees


Location

  • NetApp, Inc.
  • 1395 Crossman Avenue
  • Sunnyvale
  • California
  • 94089
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NTADB (Deutsche Boerse AG)YesCommon StockDEEURNov 1995
NTAPNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDNov 1995

Biography

NetApp, Inc. provides software, systems, and services to manage and share data on-premises, and private and public clouds worldwide. The company offers cloud data services, including NetApp Cloud Volumes S ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/17 00:04
End of Day Share Price2019/10/16 00:00
Earnings2019/07/26
Annual Earnings2019/04/26


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.