On Monday, NetApp Inc. (NASDAQ:NTAP) received an upgrade from Argus, signaling a positive shift in its stock prospects. The firm revised its rating from Hold to Buy, setting a new price target of $130.00.
This adjustment follows NetApp's impressive fiscal third-quarter 2024 performance, where the company reported revenue and non-GAAP earnings per share that surpassed market expectations. Notably, this quarter marked the first year-over-year revenue increase for NetApp in the past five quarters.
The company's financial success was attributed to effective cost controls and a favorable product mix, which led to record non-GAAP gross and operating margins. Moreover, NetApp's non-GAAP earnings per share saw a substantial 41% year-over-year increase. In response to these strong results, management has revised its full-year 2024 guidance. NetApp now projects a slight single-digit decline in revenue but expects a mid-teens percentage growth in annual non-GAAP earnings per share.
The upgrade reflects the analyst's confidence in NetApp's potential, particularly considering the growing demand for technology in the age of artificial intelligence and the easing of macroeconomic pressures. The analyst believes that NetApp's stock is currently attractive based on these factors. Additionally, the firm has reiterated its long-term Buy rating for NetApp shares.
NetApp's management team is likely to continue focusing on strategies that enhance profitability and shareholder value, as indicated by the recent positive adjustments in its financial outlook. The company's performance in the upcoming quarters will be watched with interest to see if it aligns with the analyst's upgraded outlook and long-term confidence in the stock.
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