NetApp (NTAP) Outperforms Broader Market: What You Need to Know

The most recent trading session ended with NetApp (NTAP) standing at $99.42, reflecting a +1.89% shift from the previouse trading day's closing. The stock outpaced the S&P 500's daily gain of 1.2%. Meanwhile, the Dow gained 0.69%, and the Nasdaq, a tech-heavy index, added 1.59%.

Prior to today's trading, shares of the data storage company had lost 6.68% over the past month. This has was narrower than the Computer and Technology sector's loss of 6.83% and lagged the S&P 500's loss of 4.16% in that time.

The investment community will be closely monitoring the performance of NetApp in its forthcoming earnings report. On that day, NetApp is projected to report earnings of $1.80 per share, which would represent year-over-year growth of 16.88%. Simultaneously, our latest consensus estimate expects the revenue to be $1.66 billion, showing a 5.05% escalation compared to the year-ago quarter.

For the full year, the Zacks Consensus Estimates are projecting earnings of $6.47 per share and revenue of $6.26 billion, which would represent changes of +15.74% and -1.59%, respectively, from the prior year.

Any recent changes to analyst estimates for NetApp should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Currently, NetApp is carrying a Zacks Rank of #1 (Strong Buy).

In the context of valuation, NetApp is at present trading with a Forward P/E ratio of 15.14. This denotes a discount relative to the industry's average Forward P/E of 24.46.

It's also important to note that NTAP currently trades at a PEG ratio of 1.72. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. By the end of yesterday's trading, the Computer- Storage Devices industry had an average PEG ratio of 1.32.

The Computer- Storage Devices industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 39, this industry ranks in the top 16% of all industries, numbering over 250.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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NetApp, Inc. (NTAP) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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