Analysts Are Updating Their NetApp, Inc. (NASDAQ:NTAP) Estimates After Its Second-Quarter Results

Investors in NetApp, Inc. (NASDAQ:NTAP) had a good week, as its shares rose 6.1% to close at US$130 following the release of its quarterly results. NetApp reported US$1.7b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.42 beat expectations, being 3.8% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for NetApp

Taking into account the latest results, the current consensus from NetApp's 19 analysts is for revenues of US$6.64b in 2025. This would reflect a modest 2.6% increase on its revenue over the past 12 months. Statutory per share are forecast to be US$5.60, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$6.59b and earnings per share (EPS) of US$5.42 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$137, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values NetApp at US$160 per share, while the most bearish prices it at US$116. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await NetApp shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that NetApp's rate of growth is expected to accelerate meaningfully, with the forecast 5.3% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 3.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 6.7% annually. So it's clear that despite the acceleration in growth, NetApp is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around NetApp's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that NetApp's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$137, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple NetApp analysts - going out to 2027, and you can see them free on our platform here.

You can also see our analysis of NetApp's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.