NTAP
NetApp, Inc.$100.15
Hold
Target $121.73
Report: Mar 07, 2026Technology • Computer Hardware • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$100.15+21.5%
Rec: HoldConviction: Medium
Entry Target
$93.64
(7% below current)
Fair Value
$121.73
(22% above current)
Stop Loss
$71.84
(28% below current)
Position Size
Starter
Time Horizon
Long-Term (3+ Years)
Key Metrics
Live Snapshot
Market Data
52 Week High$126.66
52 Week Low$71.84
Avg. 3 Month Volume2.45M
Efficiency
LTM Gross Margin70.5%
LTM EBITDA Margin25.8%
LTM EBIT Margin22.1%
LTM Operating Margin22.2%
LTM ROA12.1%
LTM ROE116.6%
LTM ROIC37.4%
LTM ROCE25.1%
Capital Structure
Market Cap (MM)$20.2B
Enterprise Value (MM)$21.1B
Shares Outstanding198.00M
Total Debt (MM)$2.49B
Cash & Equivalents (MM)$1.63B
LTM Net Debt (MM)$857.00M
LTM Net Debt/EBITDA0.5x
Growth
TTM Rev. Growth3.1%
Last 3-Yr Rev. CAGR1.3%
Last 3-Yr EBITDA CAGR9.7%
Last 3-Yr EPS CAGR1.0%
Valuation
Street Target Price$120.50
LTM EV/Revenue3.1x
LTM EV/Gross Profit4.5x
LTM EV/EBIT14.2x
LTM EV/EBITDA12.2x
LTM P/E16.7x
LTM EV/FCF13.1x
LTM P/FCF12.6x
LTM P/TB2.8x
LTM P/B17.4x
Dividend Yield2.0%
Payout Ratio34.3%
Executive SummarySituation: Current price is $100.15 versus fair value $121.73 (21.5% expected return), and valuation confidence is stable. Debate: Bull case depends on Acceleration of AI-specific revenue through the AFX and AIDE platforms. Bear case centers on Moat erosion due to technological disruption. Conclusion: Recommendation is Hold with Starter sizing and Long-Term (3+ Years) horizon.
Bull Case
NetApp is an undervalued AI infrastructure play with 300+ customer wins; its ONTAP software is uniquely positioned for RAG and unstructured data management. Aggressive share repurchases (10.8% reduction in 4.7 years) provide a powerful tailwind for EPS growth.
Bear Case
NAND cost inflation is outpacing pricing power, leading to sequential product gross margin compression (55.3% in Q3 FY26). Competition from Pure Storage and native cloud storage services threatens to cannibalize high-margin software revenue.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Acceleration of AI-specific revenue through the AFX and AIDE platforms. As these products move from 'wins' to 'revenue,' they should validat...
Near-Term (0-6 months)Impact: Moderate
Stabilization of NAND pricing and successful implementation of pricing actions. This would alleviate the primary concern regarding gross mar...
Long-Term (18+ months)Impact: Moderate
NetApp is at a critical juncture as it integrates AI capabilities into its core ONTAP platform while navigating a CFO transition and a perio...
Primary Risks
Concern: Medium
Moat erosion due to technological disruption. If competitors like Pure Storage or cloud-native services (Amazon FSx) offer superior performa...
Concern: Low
Sustainability of debt-financed buybacks. NetApp has used debt to fund approximately 15% of its repurchases, and Debt/Equity has risen to 31...
Concern: Medium
Stewardship is strong, supported by an independent board and a clear commitment to shareholder returns. The primary governance risk is the l...
Recent Activity
2025-02-28SEC Filing (8-K)
-15.57%NetApp reports Q3 FY2025 results with 2% revenue growth and strong margins
2025-02-27Market Movement
-5.04%Market/Sector Move -5.04%
2024-08-29SEC Filing (8-K)
-9.64%NetApp reports Q1 FY2025 results with 8% revenue growth and record margins
2024-03-01SEC Filing (8-K)
+18.17%NetApp reports Q3 FY2024 results with record profitability and 5% revenue growth
2023-11-29SEC Filing (8-K)
+14.63%NetApp reports Q2 FY2024 results with record gross margins and EPS
Valuation Table
9.8/10Decision Grade
Scenario Range
$74
Bear
$101
Base
$121
Bull
$100