Evercore ISI Reiterates In Line Rating on NetApp (NTAP)

Evercore ISI analyst Amit Daryanani reiterated an In Line rating and $120.00 price target on NetApp (NASDAQ: NTAP).

The analyst comments "NTAP hosted its analyst day, outlining key differentiators stemming from its unified platform approach, four pillars of growth, as well as updating its LT financial model. NTAP believes it remains best positioned for the “age of data” among its storage peers, with NTAP’s TAM growing at a ~7% CAGR from FY25- 27 to ~$100B+. However, data is becoming increasingly more complex to manage, particularly for AI, and NTAP believes it is able to solve these solutions for customers through its unified data storage and management platform (underpinned by the ONTAP operating system), driving flexibility across deployment models and where data/applications resides (on-prem + cloud), while meeting flexible deployment models (up front, on-prem via capex, opex via Storage-asa-Service, cloud consumption) and adding value-added software/services. In addition, NTAP updated its LT financial model, including expectations for mid-to-high single-digit revenue growth (FY25-27) and ~30%+ EBIT margins, driving double-digit EPS growth. Beyond FY27, NTAP is targeting achieving the rule of 40. Key growth vectors: 1) Flash storage is expected to represent a ~$40B market in FY27 with NTAP now offering products across the entire performance and cost stack. 2) Block storage represent a net-new opportunity for NTAP, given the limited exposure the company had to this market (vs. leadership position in file), representing a ~$49B opportunity in FY27. 3) Cloud storage is expected to be a ~$27B opportunity, with a growing need for a seamless operating experience across hybrid, multi-cloud environments. NTAP remains uniquely positioned here given their firstparty offerings with GCP, Azure, and AWS. And 4) AI is expected to be a ~$14B market, with the majority of AI being fueled by unstructured data (think documents, files, video/audio, chats, logs vs. databases). NTAP is the leader in unstructured data, with ~50% of enterprise unstructured data being stored on NTAP storage, which it expects will be a key differentiator. Lastly, on capital allocation, NTAP continues to target returning 100% of FCF through share repurchases and dividends."

For an analyst ratings summary and ratings history on NetApp click here. For more ratings news on NetApp click here.

Shares of NetApp closed at $122.90 yesterday.

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