NetApp (NASDAQ:NTAP) Shares Gap Down – What’s Next?

NetApp, Inc. (NASDAQ:NTAP) gapped down before the market opened on Thursday . The stock had previously closed at $180.77, but opened at $161.95. NetApp shares last traded at $182.6510, with a volume of 1,382,660 shares trading hands.

NetApp News Summary

Here are the key news stories impacting NetApp this week:

• Positive Sentiment: NetApp reported fiscal Q1 FY2027 revenue of approximately $2.03 billion, up nearly 30% year over year and well above the roughly $1.84 billion consensus estimate. Non-GAAP EPS was $2.58, also comfortably ahead of expectations near $2.12. NetApp Stock Tanks Despite Strong Q1 Earnings Print
• Positive Sentiment: Management raised its fiscal 2027 outlook to approximately $7.98 billion-$8.23 billion in revenue and $9.73-$10.03 in adjusted EPS. Second-quarter guidance also exceeds consensus, signaling continued demand from artificial intelligence, all-flash storage and hybrid-cloud customers. NetApp FY2027 Forecast and Raised EPS Outlook
• Positive Sentiment: Analysts lifted several price targets following the results. Morgan Stanley raised its target to $191, Susquehanna to $195, and Goldman Sachs maintained a $210 target and Buy rating, citing stronger guidance and cloud momentum.
• Positive Sentiment: NetApp announced that AWS Transform now supports migrations to Amazon FSx for NetApp ONTAP, potentially making it easier for enterprises to move storage and database workloads to AWS. The company also declared a quarterly dividend of $0.52 per share, payable October 28.
• Neutral Sentiment: Analyst opinion remains mixed: Morgan Stanley and Susquehanna kept Equal Weight or Neutral ratings despite higher targets, while Wedbush raised its target only to $170, below the recent trading level.
• Negative Sentiment: The post-earnings selloff reflects weaker free cash flow and profitability concerns. Operating cash flow was about $503 million and free cash flow $401 million, while gross margin declined and management warned that second-quarter gross margin would fall sequentially as product mix and component costs pressure results. NetApp Earnings and Free Cash Flow Decline

Analysts Set New Price Targets

A number of research firms have recently issued reports on NTAP. Wells Fargo & Company upped their price target on NetApp from $180.00 to $190.00 and gave the company an “equal weight” rating in a research report on Thursday. Argus boosted their price objective on NetApp from $130.00 to $200.00 and gave the stock a “buy” rating in a research note on Monday, June 1st. Citigroup upped their target price on NetApp from $150.00 to $209.00 and gave the company a “neutral” rating in a report on Tuesday, August 18th. Wedbush raised their target price on NetApp from $150.00 to $170.00 and gave the stock a “neutral” rating in a research note on Thursday. Finally, Bank of America lifted their price target on NetApp from $180.00 to $206.00 and gave the stock a “neutral” rating in a report on Monday. Five analysts have rated the stock with a Buy rating and ten have issued a Hold rating to the company’s stock. According to MarketBeat.com, the company currently has a consensus rating of “Hold” and an average price target of $191.69.

NetApp Trading Up 3.4%

The company has a quick ratio of 1.39, a current ratio of 1.44 and a debt-to-equity ratio of 1.84. The business has a 50-day simple moving average of $177.45 and a 200-day simple moving average of $139.96. The company has a market cap of $36.67 billion, a PE ratio of 29.34, a price-to-earnings-growth ratio of 2.49 and a beta of 1.44.

NetApp (NASDAQ:NTAP) last posted its quarterly earnings data on Wednesday, September 2nd. The data storage provider reported $2.58 EPS for the quarter, beating the consensus estimate of $2.12 by $0.46. NetApp had a net margin of 18.43% and a return on equity of 117.23%. The business had revenue of $2.02 billion during the quarter, compared to analyst estimates of $1.84 billion. During the same quarter last year, the firm posted $1.15 earnings per share. The business’s revenue for the quarter was up 29.9% compared to the same quarter last year. NetApp has set its FY 2027 guidance at 9.730-10.030 EPS and its Q2 2027 guidance at 2.540-2.640 EPS. On average, analysts predict that NetApp, Inc. will post 7.34 EPS for the current fiscal year.

NetApp Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Wednesday, October 28th. Shareholders of record on Friday, October 9th will be paid a $0.52 dividend. The ex-dividend date is Friday, October 9th. This represents a $2.08 dividend on an annualized basis and a yield of 1.1%. NetApp’s dividend payout ratio (DPR) is currently 32.70%.

Insider Activity

In other news, President Cesar Cernuda sold 2,608 shares of the business’s stock in a transaction dated Monday, August 17th. The stock was sold at an average price of $204.48, for a total value of $533,283.84. Following the completion of the sale, the president directly owned 46,530 shares of the company’s stock, valued at approximately $9,514,454.40. The trade was a 5.31% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, EVP Elizabeth M. O’callahan sold 1,000 shares of the stock in a transaction that occurred on Monday, August 10th. The shares were sold at an average price of $193.82, for a total value of $193,820.00. Following the completion of the sale, the executive vice president directly owned 30,297 shares of the company’s stock, valued at $5,872,164.54. The trade was a 3.20% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 55,072 shares of company stock worth $8,719,520 in the last three months. Corporate insiders own 0.36% of the company’s stock.

Institutional Investors Weigh In On NetApp

Several large investors have recently modified their holdings of the stock. California State Teachers Retirement System lifted its stake in shares of NetApp by 15,681.5% in the 2nd quarter. California State Teachers Retirement System now owns 48,620,175 shares of the data storage provider’s stock worth $7,524,458,000 after acquiring an additional 48,312,092 shares during the period. BlackRock Inc. purchased a new stake in shares of NetApp in the second quarter valued at about $2,925,168,000. State Street Corp increased its stake in shares of NetApp by 1.1% during the fourth quarter. State Street Corp now owns 10,192,354 shares of the data storage provider’s stock worth $1,091,499,000 after acquiring an additional 115,451 shares during the period. Primecap Management Co. CA acquired a new position in shares of NetApp during the second quarter worth about $1,395,423,000. Finally, Wellington Management Group LLP raised its holdings in NetApp by 17.1% during the third quarter. Wellington Management Group LLP now owns 4,915,553 shares of the data storage provider’s stock worth $582,296,000 after purchasing an additional 718,409 shares in the last quarter. Hedge funds and other institutional investors own 92.17% of the company’s stock.

About NetApp

NetApp, Inc (NASDAQ: NTAP) is a data management and storage company that delivers hybrid cloud data services for applications and data. Founded in 1992 as Network Appliance and rebranded as NetApp in 2008, the company is headquartered in Sunnyvale, California. NetApp’s offering focuses on enabling organizations to store, manage, protect and move data across on-premises environments and major public clouds.

The company’s product portfolio centers on the ONTAP data management software and a range of storage systems and services built around it.