NetApp (NASDAQ:NTAP) Announces Earnings Results, Misses Estimates By $0.24 EPS

NetApp (NASDAQ:NTAP) released its quarterly earnings results on Thursday. The data storage provider reported $2.03 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $2.27 by ($0.24), Zacks reports. NetApp had a return on equity of 118.11% and a net margin of 18.07%.The company had revenue of $1.95 billion during the quarter, compared to the consensus estimate of $1.87 billion. During the same period in the previous year, the company earned $1.93 earnings per share. NetApp’s quarterly revenue was up 12.5% on a year-over-year basis. NetApp updated its FY 2027 guidance to 8.700-9.000 EPS and its Q1 2027 guidance to 2.050-2.150 EPS.

Here are the key takeaways from NetApp’s conference call:

• NetApp posted record FY 2026 results, with record revenue, gross profit, operating income, operating cash flow, and free cash flow. Management said the company achieved its full-year 30% operating margin target and generated strong demand across AI and cloud.
• Q4 outperformed expectations, with revenue of $1.95 billion and EPS of $2.43, both above the high end of guidance. The company also delivered a 32% operating margin and all-time record quarterly operating income.
• AI demand was a major growth driver, with about 500 AI and data preparation wins in Q4 and over 1,100 for the full year. Management said AI opportunities are broad-based across on-prem, neo-cloud, and sovereign cloud customers, and that enterprise AI adoption is accelerating.
• Cloud, all-flash, and Keystone all hit new highs, with public cloud revenue up 18% in FY 2026 ex-Spot, all-flash revenue up 11%, and Keystone revenue up about 65%. Management said these businesses are expanding NetApp’s addressable market and supporting future growth.
• FY 2027 guidance calls for faster top-line growth, with revenue expected to rise to $7.325 billion-$7.575 billion, implying 8% growth at the midpoint. NetApp also guided to EPS of $8.70-$9.00 and said it plans to return up to 100% of free cash flow to shareholders.

NetApp Price Performance

NTAP stock opened at $142.40 on Friday. The firm has a 50 day moving average price of $110.99 and a 200-day moving average price of $107.48. NetApp has a 52-week low of $93.69 and a 52-week high of $143.65. The firm has a market capitalization of $28.10 billion, a price-to-earnings ratio of 23.81, a PEG ratio of 2.60 and a beta of 1.28. The company has a debt-to-equity ratio of 2.15, a quick ratio of 1.36 and a current ratio of 1.39.

NetApp Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Wednesday, July 29th. Stockholders of record on Friday, July 10th will be issued a dividend of $0.52 per share. This represents a $2.08 annualized dividend and a dividend yield of 1.5%. The ex-dividend date is Friday, July 10th. NetApp’s dividend payout ratio (DPR) is presently 34.78%.

Analyst Ratings Changes

A number of research firms recently issued reports on NTAP. Weiss Ratings downgraded shares of NetApp from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Friday, March 13th. Wall Street Zen lowered NetApp from a “buy” rating to a “hold” rating in a research report on Sunday, April 19th. Wedbush reaffirmed a “neutral” rating and issued a $115.00 target price on shares of NetApp in a research report on Wednesday, February 25th. Bank of America upped their target price on shares of NetApp from $118.00 to $125.00 and gave the stock a “neutral” rating in a research report on Wednesday, May 20th. Finally, Citigroup downgraded shares of NetApp from a “neutral” rating to a “mixed” rating in a research report on Thursday, May 14th. One investment analyst has rated the stock with a Strong Buy rating, four have assigned a Buy rating and eight have issued a Hold rating to the company’s stock. According to MarketBeat.com, NetApp currently has an average rating of “Hold” and a consensus target price of $122.27.

Key NetApp News

Here are the key news stories impacting NetApp this week:

• Positive Sentiment: NetApp beat revenue expectations with $1.95 billion in quarterly sales, up 12.5% year over year, and management said execution remained strong. Article Title
• Positive Sentiment: NetApp raised its FY2027 EPS guidance to $8.70-$9.00 and revenue guidance to $7.3 billion-$7.6 billion, both above consensus, which supports the longer-term outlook. Article Title
• Positive Sentiment: The board authorized a new $1 billion share repurchase program and the company announced a quarterly dividend of $0.52 per share, both of which can help support the stock. Article Title
• Positive Sentiment: Bank of America’s Wamsi Mohan reiterated a Hold rating but lifted his price target to $150, signaling improved confidence in the shares’ upside. Article Title
• Neutral Sentiment: NetApp’s Q4 EPS of $2.03 missed the consensus estimate of $2.27, which likely limited the stock’s reaction despite the revenue beat.
• Neutral Sentiment: Recent earnings-call coverage highlighted record revenue and AI-related expansion efforts, but investors are still weighing valuation and margin concerns. Article Title
• Negative Sentiment: Analyst commentary also pointed to valuation and margin headwinds, suggesting the market may be reluctant to bid the stock much higher after its recent run. Article Title

Insider Activity at NetApp

In other news, EVP Elizabeth M. O’callahan sold 1,000 shares of NetApp stock in a transaction that occurred on Monday, May 11th. The shares were sold at an average price of $117.73, for a total transaction of $117,730.00. Following the completion of the transaction, the executive vice president directly owned 18,382 shares in the company, valued at approximately $2,164,112.86. This trade represents a 5.16% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Also, CAO Lorenzo Daniel De sold 275 shares of NetApp stock in a transaction that occurred on Monday, May 18th. The shares were sold at an average price of $120.00, for a total transaction of $33,000.00. Following the transaction, the chief accounting officer owned 1,090 shares of the company’s stock, valued at $130,800. The trade was a 20.15% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 3,275 shares of company stock valued at $347,650 over the last quarter. Company insiders own 0.28% of the company’s stock.

Institutional Investors Weigh In On NetApp

Several institutional investors and hedge funds have recently made changes to their positions in NTAP. DV Equities LLC bought a new stake in shares of NetApp during the fourth quarter valued at approximately $30,000. Gen Wealth Partners Inc bought a new stake in shares of NetApp during the fourth quarter valued at approximately $30,000. Measured Wealth Private Client Group LLC bought a new stake in shares of NetApp during the third quarter valued at approximately $35,000. Zions Bancorporation National Association UT increased its holdings in NetApp by 99.5% in the 4th quarter. Zions Bancorporation National Association UT now owns 385 shares of the data storage provider’s stock worth $41,000 after buying an additional 192 shares in the last quarter. Finally, Sunbelt Securities Inc. increased its holdings in NetApp by 92.8% in the 3rd quarter. Sunbelt Securities Inc. now owns 480 shares of the data storage provider’s stock worth $57,000 after buying an additional 231 shares in the last quarter. Institutional investors own 92.17% of the company’s stock.

NetApp Company Profile

NetApp, Inc (NASDAQ: NTAP) is a data management and storage company that delivers hybrid cloud data services for applications and data. Founded in 1992 as Network Appliance and rebranded as NetApp in 2008, the company is headquartered in Sunnyvale, California. NetApp’s offering focuses on enabling organizations to store, manage, protect and move data across on-premises environments and major public clouds.

The company’s product portfolio centers on the ONTAP data management software and a range of storage systems and services built around it.