NETAPP INC (NTAP) Stock Fundamental Analysis
NASDAQ:NTAP - Nasdaq - US64110D1046 - Common Stock - Currency: USD
NTAP gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals 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 is not valued too expensively and it also shows a decent growth rate. NTAP also has an excellent dividend rating. These ratings would make NTAP suitable for dividend investing!
1. Profitability
1.1 Basic Checks
NTAP had positive earnings in the past year.
NTAP had a positive operating cash flow in the past year.
NTAP had positive earnings in each of the past 5 years.
NTAP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NTAP's Return On Assets of 10.96% is amongst the best of the industry. NTAP outperforms 87.50% of its industry peers.
NTAP's Return On Equity of 114.04% is amongst the best of the industry. NTAP outperforms 96.88% of its industry peers.
The Return On Invested Capital of NTAP (18.95%) is better than 81.25% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NTAP is in line with the industry average of 16.63%.
The 3 year average ROIC (17.30%) for NTAP is below the current ROIC(18.95%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.96% | ||
| ROE | 114.04% | ||
| ROIC | 18.95% |
ROA(3y)11.3%
ROA(5y)10.21%
ROE(3y)103.33%
ROE(5y)105.68%
ROIC(3y)17.3%
ROIC(5y)16.23%
1.3 Margins
The Profit Margin of NTAP (18.05%) is better than 93.75% of its industry peers.
In the last couple of years the Profit Margin of NTAP has grown nicely.
The Operating Margin of NTAP (21.68%) is better than 90.63% of its industry peers.
NTAP's Operating Margin has improved in the last couple of years.
The Gross Margin of NTAP (70.19%) is better than 100.00% of its industry peers.
In the last couple of years the Gross Margin of NTAP has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.68% | ||
| PM (TTM) | 18.05% | ||
| GM | 70.19% |
OM growth 3Y4.43%
OM growth 5Y4.81%
PM growth 3Y6.76%
PM growth 5Y3.58%
GM growth 3Y1.67%
GM growth 5Y0.95%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), NTAP is creating value.
The number of shares outstanding for NTAP has been reduced compared to 1 year ago.
Compared to 5 years ago, NTAP has less shares outstanding
Compared to 1 year ago, NTAP has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.50 indicates that NTAP is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of NTAP (2.50) is better than 65.63% of its industry peers.
NTAP has a debt to FCF ratio of 2.42. This is a good value and a sign of high solvency as NTAP would need 2.42 years to pay back of all of its debts.
NTAP has a Debt to FCF ratio of 2.42. This is amongst the best in the industry. NTAP outperforms 81.25% of its industry peers.
A Debt/Equity ratio of 2.39 is on the high side and indicates that NTAP has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 2.39, NTAP is doing worse than 68.75% of the companies in the same industry.
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 | 2.39 | ||
| Debt/FCF | 2.42 | ||
| Altman-Z | 2.5 |
ROIC/WACC2.34
WACC8.09%
2.3 Liquidity
NTAP has a Current Ratio of 1.26. 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 Current ratio, with a value of 1.26, NTAP is doing worse than 68.75% of the companies in the same industry.
A Quick Ratio of 1.22 indicates that NTAP should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.22, NTAP is in the better half of the industry, outperforming 62.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.26 | ||
| Quick Ratio | 1.22 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 12.36% over the past year.
NTAP shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 12.19% yearly.
NTAP shows a small growth in Revenue. In the last year, the Revenue has grown by 4.85%.
The Revenue has been growing slightly by 3.96% on average over the past years.
EPS 1Y (TTM)12.36%
EPS 3Y11.18%
EPS 5Y12.19%
EPS Q2Q%7.22%
Revenue 1Y (TTM)4.85%
Revenue growth 3Y1.32%
Revenue growth 5Y3.96%
Sales Q2Q%3.84%
3.2 Future
The Earnings Per Share is expected to grow by 8.53% on average over the next years. This is quite good.
The Revenue is expected to grow by 4.39% on average over the next years.
EPS Next Y8.46%
EPS Next 2Y9.1%
EPS Next 3Y8.53%
EPS Next 5YN/A
Revenue Next Year2.85%
Revenue Next 2Y3.97%
Revenue Next 3Y4.39%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 15.05, which indicates a correct valuation of NTAP.
84.38% of the companies in the same industry are more expensive than NTAP, based on the Price/Earnings ratio.
NTAP is valuated rather cheaply when we compare the Price/Earnings ratio to 27.11, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 13.87, which indicates a correct valuation of NTAP.
Based on the Price/Forward Earnings ratio, NTAP is valued a bit cheaper than 62.50% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 35.78. NTAP is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.05 | ||
| Fwd PE | 13.87 |
4.2 Price Multiples
NTAP's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. NTAP is cheaper than 65.63% of the companies in the same industry.
81.25% of the companies in the same industry are more expensive than NTAP, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.36 | ||
| EV/EBITDA | 11.9 |
4.3 Compensation for Growth
NTAP's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of NTAP may justify a higher PE ratio.
PEG (NY)1.78
PEG (5Y)1.23
EPS Next 2Y9.1%
EPS Next 3Y8.53%
5. Dividend
5.1 Amount
NTAP has a Yearly Dividend Yield of 2.00%.
NTAP's Dividend Yield is rather good when compared to the industry average which is at 1.98. NTAP pays more dividend than 90.63% of the companies in the same industry.
NTAP's Dividend Yield is comparable with the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2% |
5.2 History
The dividend of NTAP has a limited annual growth rate of 1.72%.
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)1.72%
Div Incr Years1
Div Non Decr Years11
5.3 Sustainability
NTAP pays out 35.75% of its income as dividend. This is a sustainable payout ratio.
The dividend of NTAP is growing, but earnings are growing more, so the dividend growth is sustainable.
DP35.75%
EPS Next 2Y9.1%
EPS Next 3Y8.53%
109.4
+1.62 (+1.5%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners95.59%
Inst Owner Change0.74%
Ins Owners0.22%
Ins Owner Change6.04%
Market Cap21.89B
Analysts70.71
Price Target116.63 (6.61%)
Short Float %4.28%
Short Ratio4.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2% |
Yearly Dividend2.08
Dividend Growth(5Y)1.72%
DP35.75%
Div Incr Years1
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.06%
Min EPS beat(2)-1.89%
Max EPS beat(2)-0.24%
EPS beat(4)2
Avg EPS beat(4)1.46%
Min EPS beat(4)-1.89%
Max EPS beat(4)5.17%
EPS beat(8)5
Avg EPS beat(8)4.24%
EPS beat(12)9
Avg EPS beat(12)5.44%
EPS beat(16)13
Avg EPS beat(16)6.64%
Revenue beat(2)0
Avg Revenue beat(2)-3.28%
Min Revenue beat(2)-5.03%
Max Revenue beat(2)-1.53%
Revenue beat(4)0
Avg Revenue beat(4)-2.18%
Min Revenue beat(4)-5.03%
Max Revenue beat(4)-0.96%
Revenue beat(8)1
Avg Revenue beat(8)-1.42%
Revenue beat(12)3
Avg Revenue beat(12)-1.68%
Revenue beat(16)3
Avg Revenue beat(16)-1.58%
PT rev (1m)-0.13%
PT rev (3m)-2.9%
EPS NQ rev (1m)0.08%
EPS NQ rev (3m)-7.62%
EPS NY rev (1m)0%
EPS NY rev (3m)0.13%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.85%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.56%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.05 | ||
| Fwd PE | 13.87 | ||
| P/S | 3.33 | ||
| P/FCF | 16.36 | ||
| P/OCF | 14.54 | ||
| P/B | 21.05 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.9 |
EPS(TTM)7.27
EY6.65%
EPS(NY)7.88
Fwd EY7.21%
FCF(TTM)6.69
FCFY6.11%
OCF(TTM)7.53
OCFY6.88%
SpS32.84
BVpS5.2
TBVpS-8.63
PEG (NY)1.78
PEG (5Y)1.23
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.96% | ||
| ROE | 114.04% | ||
| ROCE | 23.13% | ||
| ROIC | 18.95% | ||
| ROICexc | 50.42% | ||
| ROICexgc | N/A | ||
| OM | 21.68% | ||
| PM (TTM) | 18.05% | ||
| GM | 70.19% | ||
| FCFM | 20.36% |
ROA(3y)11.3%
ROA(5y)10.21%
ROE(3y)103.33%
ROE(5y)105.68%
ROIC(3y)17.3%
ROIC(5y)16.23%
ROICexc(3y)40.17%
ROICexc(5y)45.98%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)21.12%
ROCE(5y)19.81%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y-0.26%
ROICexc growth 5Y0.5%
OM growth 3Y4.43%
OM growth 5Y4.81%
PM growth 3Y6.76%
PM growth 5Y3.58%
GM growth 3Y1.67%
GM growth 5Y0.95%
F-Score6
Asset Turnover0.61
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.39 | ||
| Debt/FCF | 2.42 | ||
| Debt/EBITDA | 1.49 | ||
| Cap/Depr | 69.14% | ||
| Cap/Sales | 2.56% | ||
| Interest Coverage | 26.89 | ||
| Cash Conversion | 90.29% | ||
| Profit Quality | 112.82% | ||
| Current Ratio | 1.26 | ||
| Quick Ratio | 1.22 | ||
| Altman-Z | 2.5 |
F-Score6
WACC8.09%
ROIC/WACC2.34
Cap/Depr(3y)75.43%
Cap/Depr(5y)84.21%
Cap/Sales(3y)2.93%
Cap/Sales(5y)3.04%
Profit Quality(3y)112.04%
Profit Quality(5y)120.33%
High Growth Momentum
Growth
EPS 1Y (TTM)12.36%
EPS 3Y11.18%
EPS 5Y12.19%
EPS Q2Q%7.22%
EPS Next Y8.46%
EPS Next 2Y9.1%
EPS Next 3Y8.53%
EPS Next 5YN/A
Revenue 1Y (TTM)4.85%
Revenue growth 3Y1.32%
Revenue growth 5Y3.96%
Sales Q2Q%3.84%
Revenue Next Year2.85%
Revenue Next 2Y3.97%
Revenue Next 3Y4.39%
Revenue Next 5YN/A
EBIT growth 1Y12.38%
EBIT growth 3Y5.81%
EBIT growth 5Y8.96%
EBIT Next Year18.64%
EBIT Next 3Y9.5%
EBIT Next 5YN/A
FCF growth 1Y-12.55%
FCF growth 3Y10.75%
FCF growth 5Y7.41%
OCF growth 1Y-10.62%
OCF growth 3Y7.54%
OCF growth 5Y7.28%