Investment Thesis
NetApp demonstrates exceptional operational efficiency with 71% gross margins and 22.9% operating margins, coupled with impressive profitability growth (net income +20.3% YoY). Strong free cash flow generation of $969M and robust interest coverage of 17.8x indicate solid financial health despite elevated leverage, positioning the company well for continued shareholder value creation.
NTAP Strengths
- Outstanding profitability metrics with 71% gross margin and 17.5% net margin indicating pricing power and operational excellence
- Strong earnings momentum with net income up 20.3% YoY and EPS up 22.5% YoY demonstrating accelerating profitability
- Excellent free cash flow generation of $969M (19.5% FCF margin) providing substantial financial flexibility
- Superior return on equity of 75.3% reflecting efficient capital utilization
- Healthy interest coverage ratio of 17.8x despite 2.15x debt-to-equity ratio indicating manageable debt burden
NTAP Risks
- Elevated leverage with debt-to-equity ratio of 2.15x and long-term debt of $2.5B relative to $1.2B equity requires monitoring
- Modest revenue growth of 4.9% YoY suggests slower topline expansion in storage devices market
- Current ratio of 1.39x indicates moderate liquidity position; potential working capital pressure if growth slows
Key Metrics to Watch
- Revenue growth trajectory to confirm market demand beyond recent 4.9% pace
- Operating margin sustainability as gross margins may face competitive or supply chain pressures
- Debt reduction progress given elevated leverage, particularly using strong FCF generation
NTAP Financial Metrics
NTAP Profitability Ratios
NTAP Balance Sheet & Liquidity
NTAP 5-Year Financial Trend
5-Year Trend Summary: NetApp, Inc.'s revenue has shown modest growth of 7% over the 5-year period. The most recent EPS of $5.79 reflects profitable operations.
NTAP Growth Metrics (YoY)
NTAP Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $1.6B | $299.0M | $1.44 |
| Q3 2025 | $1.6B | $299.0M | $1.44 |
| Q2 2025 | $1.6B | $233.0M | $1.10 |
| Q1 2025 | $1.4B | $149.0M | $0.69 |
| Q3 2024 | $1.5B | $65.0M | $0.30 |
| Q2 2024 | $1.6B | $233.0M | $1.10 |
| Q1 2024 | $1.4B | $149.0M | $0.69 |
| Q3 2023 | $1.5B | $65.0M | $0.30 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
NTAP Capital Allocation
NTAP SEC Filings
Access official SEC EDGAR filings for NetApp, Inc. (CIK: 0001002047)