NetApp, Inc.
NetApp, Inc. Fundamental Analysis
NetApp, Inc. (NTAP) shows weak financial fundamentals with a PE ratio of 17.30, profit margin of 17.73%, and ROE of 1.18%. The company generates $6.7B in annual revenue with weak year-over-year growth of -1.48%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 51.2/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze NTAP's fundamental strength across five key dimensions:
Efficiency Score
ExcellentNTAP demonstrates superior asset utilization.
Valuation Score
ModerateNTAP shows balanced valuation metrics.
Growth Score
WeakNTAP faces weak or negative growth trends.
Financial Health Score
ModerateNTAP shows balanced financial health with some risks.
Profitability Score
ExcellentNTAP achieves industry-leading margins.
Key Financial Metrics
Is NTAP Expensive or Cheap?
P/E Ratio
NTAP trades at 17.30 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, NTAP's PEG of 16.64 indicates potential overvaluation.
Price to Book
The market values NetApp, Inc. at 20.65 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 11.43 times EBITDA. This signals the market has high growth expectations.
How Well Does NTAP Make Money?
Net Profit Margin
For every $100 in sales, NetApp, Inc. keeps $17.73 as profit after all expenses.
Operating Margin
Core operations generate 21.37 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $1.18 in profit for every $100 of shareholder equity.
ROA
NetApp, Inc. generates $12.22 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
NetApp, Inc. generates strong operating cash flow of $1.87B, reflecting robust business health.
Free Cash Flow
NetApp, Inc. generates strong free cash flow of $1.68B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $8.42 in free cash annually.
FCF Yield
NTAP converts 8.21% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
17.30
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
16.64
vs 25 benchmark
P/B Ratio
Price to book value ratio
20.65
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.08
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.78
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.34
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
1.18
vs 25 benchmark
ROA
Return on assets percentage
0.12
vs 25 benchmark
ROCE
Return on capital employed
0.23
vs 25 benchmark
How NTAP Stacks Against Its Sector Peers
| Metric | NTAP Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 17.30 | 35.19 | Better (Cheaper) |
| ROE | 117.82% | 1155.00% | Weak |
| Net Margin | 17.73% | -127067.00% (disorted) | Strong |
| Debt/Equity | 2.78 | 0.41 | Weak (High Leverage) |
| Current Ratio | 1.34 | 4.71 | Neutral |
| ROA | 12.22% | -314918.00% (disorted) | Strong |
NTAP outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews NetApp, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
24.54%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
3.00%
Industry Style: Growth, Innovation, High Beta
GrowingFCF CAGR
53.44%
Industry Style: Growth, Innovation, High Beta
High Growth