On Wednesday, BofA Securities adjusted its outlook on NetApp (NASDAQ:NTAP), increasing the price target to $100 from the previous $85, while keeping an Underperform rating on the stock. The firm anticipates that NetApp will disclose its fiscal fourth quarter 2024 results on Thursday, May 30, 2024.
BofA's projections for the full fiscal year 2024 include revenues and earnings per share (EPS) of $6.26 billion and $6.47 respectively, which is slightly above the consensus estimates of $6.25 billion in revenue and $6.45 EPS, and aligns with the company's guidance midpoint.
For the fiscal fourth quarter of 2024 specifically, BofA expects NetApp to report revenues of $1.66 billion and EPS of $1.79, marginally surpassing the Street's estimates of $1.65 billion in revenue and $1.78 EPS, as well as meeting the company's own guidance at the midpoint.
During the upcoming earnings call, it is anticipated that NetApp will provide financial outlooks for both the first quarter of fiscal year 2025 and the full fiscal year, with expectations set for at least mid-single digit growth.
BofA projects that for the first quarter of fiscal 2025, NetApp will see revenues of $1.51 billion and EPS of $1.34, which falls below the Street's estimates of $1.52 billion in revenue and $1.40 EPS. The firm also forecasts a year-over-year increase in operating expenses by 3% for the first quarter, citing typical seasonal trends.
Looking further ahead, BofA has set its projections for NetApp's full fiscal year 2025 revenue and EPS at $6.59 billion and $6.59 respectively, which is below the Street's EPS estimate of $6.52 billion in revenue and $6.67 EPS.
The firm expects revenue to grow at a mid-single digit rate for the fiscal year 2025. Despite acknowledging that NetApp's margins are performing better than previously forecasted, BofA reiterated its Underperform rating due to potential risks associated with the continued delay in storage spending.
InvestingPro Insights
In light of BofA Securities' updated outlook on NetApp, current real-time data from InvestingPro provides a deeper financial perspective on the company's performance. NetApp's market capitalization stands at a robust $24.35 billion, with a Price/Earnings (P/E) ratio of 26.3, reflecting investor confidence in the company's profitability. Notably, the company's Price/Book ratio is quite high at 24.5, suggesting a premium valuation relative to its book value. Despite a slight decline in year-over-year revenue growth at -4.33%, NetApp has shown impressive gross profit margins of 70.09% over the last twelve months as of Q3 2024.
InvestingPro Tips indicate that NetApp's management has been actively engaged in share buybacks, signaling confidence in the company's intrinsic value. Furthermore, the stock has been trading near its 52-week high, and with a dividend yield of 1.69%, it has maintained dividend payments for 12 consecutive years, highlighting its commitment to returning value to shareholders. It's worth noting that there are additional tips available on InvestingPro, which could provide further insights into NetApp's financial health and stock performance. For those interested, using the coupon code PRONEWS24 can secure an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
As investors and analysts await NetApp's fiscal fourth quarter 2024 results, these metrics and insights may prove valuable in assessing the company's current position and future prospects within the dynamic tech landscape.
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