NetApp, Inc. (NTAP) stock analysis

P/E above its 5-year median

NetApp's P/E of 25.8 is above its own 5-year median of 19.1.

P/E below the industry

NetApp's P/E of 25.8 is below the Computer and Office Equipment median of 26.0.

EV/EBITDA above its 5-year median

NetApp's EV/EBITDA of 17.4 is above its 5-year median of 13.4.

P/B above the industry

NetApp's price-to-book of 24.06 is above the Computer and Office Equipment median of 3.71.

Trading above fair value

The share price of $183.12 is above our fair value estimate of $151.75.

Margin of safety under 20%

The price is 20.7% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -0.7% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 3.1% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 21.1% over the last twelve months, against a 5-year average of 11.8% a year.

Growing faster than the industry

Revenue grew 12.7% over the last twelve months; the Computer and Office Equipment median is 11.2%.

Guidance raised

NetApp raised its full fiscal year 2027 Net revenues outlook on Sep 2, 2026.

Gross margin improving

Gross margin was 80.3% over the last twelve months, against 80.0% a year earlier.

Return on equity over 15%

Return on equity was 115% over the last twelve months and averaged 110% over five years.

Return on capital over 10%

Return on invested capital was 528%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

NetApp's return on equity of 115% is above the Computer and Office Equipment median of 7.5%.

Earnings grew over 5 years

Net income grew 11.8% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 21.8% over the last twelve months, against a 5-year average of 18.6%.

Net margin above the industry

NetApp's net margin of 21.8% is above the Computer and Office Equipment median of 3.8%.

High debt

Debt is 166% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 384% five years ago to 166%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 76.2% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 1.24 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.58; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

NetApp paid dividends worth 1.1% of the share price over the last twelve months.

Yield below Treasuries

The 1.1% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; NetApp yields 1.1%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 29.0% of net income.

Covered by free cash flow

Dividends take 24.9% of free cash flow.