NETAPP INC (NTAP)
US64110D1046 - Common Stock
Overall NTAP gets a fundamental rating of 6 out of 10. We evaluated NTAP against 32 industry peers in the Technology Hardware, Storage & Peripherals industry. While NTAP has a great profitability rating, there are some minor concerns on its financial health. NTAP has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
NTAP had positive earnings in the past year.
In the past year NTAP had a positive cash flow from operations.
In the past 5 years NTAP has always been profitable.
Each year in the past 5 years NTAP had a positive operating cash flow.
1.2 Ratios
NTAP has a Return On Assets of 10.03%. This is amongst the best in the industry. NTAP outperforms 84.38% of its industry peers.
NTAP has a Return On Equity of 94.57%. This is amongst the best in the industry. NTAP outperforms 93.75% of its industry peers.
The Return On Invested Capital of NTAP (18.74%) is better than 87.50% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NTAP is in line with the industry average of 13.92%.
The last Return On Invested Capital (18.74%) for NTAP is above the 3 year average (15.40%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.03% | ||
| ROE | 94.57% | ||
| ROIC | 18.74% |
ROA(3y)10.04%
ROA(5y)10.88%
ROE(3y)109.44%
ROE(5y)154.8%
ROIC(3y)15.4%
ROIC(5y)16.78%
1.3 Margins
NTAP has a Profit Margin of 15.21%. This is amongst the best in the industry. NTAP outperforms 90.63% of its industry peers.
In the last couple of years the Profit Margin of NTAP has grown nicely.
The Operating Margin of NTAP (19.85%) is better than 90.63% of its industry peers.
NTAP's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 70.09%, NTAP belongs to the best of the industry, outperforming 93.75% of the companies in the same industry.
NTAP's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.85% | ||
| PM (TTM) | 15.21% | ||
| GM | 70.09% |
OM growth 3Y2.13%
OM growth 5Y2.84%
PM growth 3Y9.79%
PM growth 5Y59.17%
GM growth 3Y-0.39%
GM growth 5Y1.09%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), NTAP is creating value.
Compared to 1 year ago, NTAP has less shares outstanding
The number of shares outstanding for NTAP has been reduced compared to 5 years ago.
The debt/assets ratio for NTAP has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.69 indicates that NTAP is not a great score, but indicates only limited risk for bankruptcy at the moment.
NTAP's Altman-Z score of 2.69 is fine compared to the rest of the industry. NTAP outperforms 62.50% of its industry peers.
The Debt to FCF ratio of NTAP is 2.06, which is a good value as it means it would take NTAP, 2.06 years of fcf income to pay off all of its debts.
NTAP has a better Debt to FCF ratio (2.06) than 78.13% of its industry peers.
NTAP has a Debt/Equity ratio of 2.00. This is a high value indicating a heavy dependency on external financing.
NTAP has a worse Debt to Equity ratio (2.00) than 78.13% of its industry peers.
Even though the debt/equity ratio score it not favorable for NTAP, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2 | ||
| Debt/FCF | 2.06 | ||
| Altman-Z | 2.69 |
ROIC/WACC1.96
WACC9.56%
2.3 Liquidity
A Current Ratio of 1.15 indicates that NTAP should not have too much problems paying its short term obligations.
The Current ratio of NTAP (1.15) is worse than 78.13% of its industry peers.
NTAP has a Quick Ratio of 1.11. This is a normal value and indicates that NTAP is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.11, NTAP is doing worse than 62.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.15 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.53% over the past year.
The Earnings Per Share has been growing by 10.01% on average over the past years. This is quite good.
Looking at the last year, NTAP shows a decrease in Revenue. The Revenue has decreased by -4.33% in the last year.
NTAP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.45% yearly.
EPS 1Y (TTM)13.53%
EPS 3Y10.98%
EPS 5Y10.01%
EPS growth Q2Q41.61%
Revenue 1Y (TTM)-4.33%
Revenue growth 3Y5.54%
Revenue growth 5Y1.45%
Revenue growth Q2Q5.24%
3.2 Future
Based on estimates for the next years, NTAP will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.38% on average per year.
Based on estimates for the next years, NTAP will show a small growth in Revenue. The Revenue will grow by 2.44% on average per year.
EPS Next Y17.88%
EPS Next 2Y10.68%
EPS Next 3Y9.38%
EPS Next 5YN/A
Revenue Next Year-1.12%
Revenue Next 2Y1.55%
Revenue Next 3Y2.44%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 16.85 indicates a correct valuation of NTAP.
Compared to the rest of the industry, the Price/Earnings ratio of NTAP indicates a somewhat cheap valuation: NTAP is cheaper than 75.00% of the companies listed in the same industry.
NTAP is valuated rather cheaply when we compare the Price/Earnings ratio to 28.28, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 15.28, which indicates a correct valuation of NTAP.
Based on the Price/Forward Earnings ratio, NTAP is valued a bit cheaper than 71.88% of the companies in the same industry.
NTAP's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 20.88.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.85 | ||
| Fwd PE | 15.28 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NTAP is on the same level as its industry peers.
The rest of the industry has a similar Price/Free Cash Flow ratio as NTAP.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.63 | ||
| EV/EBITDA | 13.82 |
4.3 Compensation for Growth
NTAP's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
NTAP has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)0.94
PEG (5Y)1.68
EPS Next 2Y10.68%
EPS Next 3Y9.38%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.96%, NTAP has a reasonable but not impressive dividend return.
NTAP's Dividend Yield is rather good when compared to the industry average which is at 2.81. NTAP pays more dividend than 84.38% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, NTAP has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.96% |
5.2 History
On average, the dividend of NTAP grows each year by 19.98%, which is quite nice.
NTAP has paid a dividend for at least 10 years, which is a reliable track record.
NTAP has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)19.98%
Div Incr Years0
Div Non Decr Years10
5.3 Sustainability
44.47% of the earnings are spent on dividend by NTAP. This is a bit on the high side, but may be sustainable.
NTAP's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP44.47%
EPS Next 2Y10.68%
EPS Next 3Y9.38%
NETAPP INC
NASDAQ:NTAP (5/3/2024, 7:09:18 PM)
After market: 105.45 +0.81 (+0.77%)104.64
+2.52 (+2.47%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
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Market Cap21.60B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.96% |
Dividend Growth(5Y)
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Surprises & Revisions
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EPS NY rev (3m)
Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.85 | ||
| Fwd PE | 15.28 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.94
PEG (5Y)1.68
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.03% | ||
| ROE | 94.57% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 19.85% | ||
| PM (TTM) | 15.21% | ||
| GM | 70.09% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.66
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.15 | ||
| Quick Ratio | 1.11 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)13.53%
EPS 3Y10.98%
EPS 5Y
EPS growth Q2Q
EPS Next Y17.88%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-4.33%
Revenue growth 3Y5.54%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
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