NetApp (NTAP): Good Quarter, Raising PT - Jefferies
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Jefferies analyst, James Kisner, reiterated his Hold rating on shares of NetApp (NASDAQ: NTAP) and raised his price target to $29.00 (from $24.00).
NetApp printed a solid Q1 beat driven by modest revenue upside and good expense control. Guidance was in line and the analyst was encouraged to see product margins stabilize with strong performance of NetApp's all flash products. Some concerns remain however, about NetApp's position in a highly competitive storage market.
NTAP reported FQ1 (Jul) revenue of $1.29B, above the Street's $1.26B. Q1 EPS totaled $0.46, beating the Street's $0.36. Gross margin reached 62.4% (Street = 62.2%). Product gross margin was 46.7%, above our 44% expectation and essentially flat Q/Q. Operating expenses were less than expected at $652M (Street = $666M). G&A was particularly light at $59M vs. our $75M; the company attributed the low G&A to ongoing cost reduction efforts.
Shares of NetApp closed at $28.85 yesterday.
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