In its latest quarterly earnings release NetApp ( NTAP ) reported total revenue growth of 11% sequentially to $1.4 billion. The product revenue (comprising primarily of storage hardware) grew 14% sequentially to about $960 million, the second highest sequential growth rate in the past 5 years. NetApp is the third largest player in the external disk storage market behind EMC ( EMC ) and IBM (NYSE:IBM).
We have a $54.93 Trefis price estimate for NetApp's stock , about 5-10% above the stock's market price.
Strong Growth in NetApp's Storage Hardware Market Share
NetApp reported its total units shipped were up 29% year-over-year despite material constraints through the middle of the quarter. For the entire fiscal year, the firm posted a 30% revenue growth and the largest market share gains in its history.
On geographic basis, EMEA grew 15%, Asia-Pacific grew 21%, Americas grew 14% and the U.S. Public Sector an incredible 73%. The U.S. Public Sector business remains particularly robust as virtualization and cloud deployments remain a broad governmental priority and offers tremendous business potential to NetApp. (See HP Could Gain as Government Shifts to Cloud )
The firm is projecting $1.5 billion in Q1'12 estimating continued growth in storage hardware as well as the inclusion of revenues from the recently acquired Engenio business.
We currently forecast a 0.25% growth NetApp's market share of external disk storage gigabytes in 2011. However if NetApp's market share continues to grow at a rapid rate driven Engenio acquisition and U.S. governments shift to Cloud, there could be significant upside to our $54.93 Trefis price estimate for NetApp . (See NetApp's Engenio Acquisition Should Lift Market Share)