NetApp (NTAP) Gains on Beat-and-raise Report; Analysts Remain Bullish

NetApp (NASDAQ: NTAP) shares are trading over 8% higher in premarket Thursday after the computer hardware company reported first-quarter results ahead of expectations.

NetApp reported an adjusted FQ1 EPS of $1.20 on revenue of $1.59 billion, which is better than the consensus of $1.10 on sales of $1.55 billion.

For the second quarter, the company expects to record an adjusted EPS of $1.33 on revenue of $1.675 billion, which is at the midpoint of the forecasted outlook. This compares to the consensus of EPS of $1.32 on sales of $1.66 billion.

“We delivered a great start to the year, fueled by broad-based demand across our portfolio and geographies, setting all-time Q1 company highs for billings, revenue, gross profit dollars, operating income and EPS,” said CEO George Kurian.

Stifel analyst Matthew Sheerin saw good results albeit “ongoing FX, supply headwinds.”

“The results benefited from a bounce-back in NTAP's Public Cloud segment following a hiccup last quarter,” added in a note.

Raymond James analyst Simon Leopold raised the price target to $105 from $94 after a beat-and-raise quarter.

“Ongoing supply chain challenges restrain the product gross margin, but expected improvement combined with prior price hikes and favorable memory costs provide offsets; we think product gross margin can recovery in FY24,” writes to clients.

By Senad Karaahmetovic

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