NetApp (NTAP) Stock Could Be 7% Undervalued After EPS Estimate Revisions

Estimate Revisions Put NetApp (NTAP) Back in Focus

Upward revisions to consensus earnings per share estimates have put NetApp (NTAP) back on investor radar, drawing attention to how shifting expectations may relate to the stock’s recent strong price performance.

See our latest analysis for NetApp.

The recent revision to earnings expectations comes on top of strong share price momentum for NetApp, with a 30-day share price return of 34.24% and a 90-day share price return of 57.96%. The 1-year total shareholder return of 58.54% and 3-year total shareholder return of 132.12% suggest that the latest move adds to an already strong longer term performance picture.

If NetApp’s run has you thinking about the next set of opportunities, this could be a useful moment to scan 49 AI infrastructure stocks

With NetApp now trading close to a published analyst price target and only a modest intrinsic discount indicated, investors have to ask whether the strong run still leaves upside on the table, or if the market is already pricing in future growth.

Most Popular Narrative: 7% Undervalued

Compared to NetApp’s last close at $159.71, the most followed narrative points to a fair value of $171.75, with that gap resting on specific growth and margin assumptions.

Ongoing enterprise migration to hybrid and multi cloud environments is creating sustained demand for NetApp's natively integrated first party and marketplace cloud storage services, which grew 33% year over year and are expanding recurring, higher margin subscription revenues and improving gross margin stability.

Read the complete narrative.

Curious what sits underneath that fair value for NetApp? Revenue growth, margin uplift, and a future earnings multiple all have to line up. The narrative connects this to a specific earnings path and a tighter share count. The exact mix may surprise you.

Result: Fair Value of $171.75 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, NetApp’s story also relies on continued AI and hybrid cloud demand. Rising component and memory costs or weaker partner momentum could quickly challenge that bullish narrative.

Find out about the key risks to this NetApp narrative.

Next Steps

Does this NetApp story sound balanced between potential and caution to you, or tilted one way? Act while the data is fresh, review both sides of the argument, and weigh the 4 key rewards and 1 important warning sign

Looking for more investment ideas beyond NetApp?

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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.

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