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NetApp Inc NTAP

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NetApp Accelerates Growth in Q4 With Broad-based Demand; Shares Overvalued; $60 FVE

Mark Cash Senior Equity Analyst

Analyst Note

| Mark Cash |

We are raising our fair value estimate for no-moat NetApp to $60 per share from $54 behind a strong fourth quarter and better expectations in the storage market over the longer term. NetApp easily topped our revenue growth expectations as broad-based demand caused a bounce-back in growth compared with the prior year. We believe NetApp is making proper strategic decisions with the growth in higher margin all flash array storage and push into public cloud services. However, our enthusiasm remains subdued when taking a longer-term view in that the storage market includes sizable market competitors proclaiming similar growth priorities and the overarching general shift of workloads being moved and stored within the public cloud. With shares trading around $77, we recommend a pullback before investing.

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Company Profile

Business Description

NetApp is a leading provider of enterprise data management and storage solutions. The company's three operating business units are products, software maintenance, and hardware maintenance. NetApp transitioned from a data center storage firm to a company with software data management solutions for multicloud environments. The California-headquartered company sells globally and has approximately 10,000 employees.

1395 Crossman Avenue
Sunnyvale, CA, 94089
T +1 408 822-6000
Sector Technology
Industry Computer Hardware
Most Recent Earnings Apr 30, 2021
Fiscal Year End Apr 30, 2021
Stock Type Cyclical
Employees 11,000


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