NetApp, Inc. (NASDAQ: NTAP)

Sector: Technology Industry: Software - Infrastructure CIK: 0001002047
Market Cap 21.24 Bn
P/B 21.54
P/E 18.05
P/S 3.20
ROIC (Qtr) 31.75
Div Yield % 2.47
Rev 1y % (Qtr) 2.83
Total Debt (Qtr) 2.49 Bn
Debt/Equity (Qtr) 2.52

About

NetApp, Inc., commonly known by its stock symbol NTAP, is a prominent player in the data storage and management industry. Since its incorporation in 1992, the company has been headquartered in San Jose, California, and has been dedicated to helping customers enhance the seamlessness, dynamism, and performance of their data infrastructure. The company's primary business activities revolve around providing data storage and management solutions, which it offers through two main segments: Hybrid Cloud and Public Cloud. The Hybrid Cloud segment provides...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 1.86B provides robust 0.75x coverage of total debt 2.49B, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 6.87B provides 2.76x coverage of total debt 2.49B, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 1.68B exceeds capital expenditure of 184M by 9.11x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 6.87B provides 5.80x coverage of working capital 1.18B, indicating strong operational backing.
  • Operating cash flow of 1.86B provides strong 14.65x coverage of inventory 127M, indicating efficient inventory management.

Bear case

  • Operating cash flow of 1.86B barely covers its investment activities of (298M), with a coverage ratio of -6.24, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 1.86B provides thin coverage of dividend payments of (418M) with a -4.45 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (298M) provide weak support for R&D spending of 996M, which is -0.30x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 1.86B provides insufficient coverage of deferred revenue obligations of 4.45B, which is 0.42x, raising concerns about future service delivery capabilities.
  • High receivables of 988M relative to inventory of 127M (7.78 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Product and Service Breakdown of Revenue (2025)

Geographical Breakdown of Revenue (2025)

Peer comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,563.59 Bn 33.97 12.13 60.56 Bn
2 ORCL Oracle Corp 561.87 Bn 36.43 9.21 124.39 Bn
3 PLTR Palantir Technologies Inc. 413.65 Bn 377.64 106.17 0.24 Bn
4 PANW Palo Alto Networks Inc 126.45 Bn 113.19 13.23 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 116.42 Bn -370.56 25.50 0.82 Bn
6 SNPS Synopsys Inc 86.06 Bn 64.60 12.20 14.29 Bn
7 NET Cloudflare, Inc. 62.78 Bn -609.27 31.18 3.50 Bn
8 FTNT Fortinet, Inc. 60.83 Bn 32.47 9.28 1.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.25 2.69
EV to Cash from Ops. EV/CFO 11.63 28.91
EV to Debt EV to Debt 8.70 19.83
EV to EBIT EV/EBIT 15.23 -9.95
EV to EBITDA EV/EBITDA 12.89 6.82
EV to Free Cash Flow [EV/FCF] EV/FCF 12.91 26.09
EV to Market Cap EV to Market Cap 1.02 0.36
EV to Revenue EV/Rev 3.26 -9.34
Price to Book Value [P/B] P/B 21.54 3.88
Price to Earnings [P/E] P/E 18.05 -10.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.82 -0.30
Dividend Payout Ratio % Div Payout % (Qtr) 35.60 2.71
Dividend per Basic Share Div per Share (Qtr) 2.08 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 24.70 1.68
Interest Coverage Int. cover (Qtr) 0.00 -14.20
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -9.52 -408.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 40.19 226.39
Dividend Growth (1y) % Div 1y % (Qtr) 1.96 -0.28
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 2.26 25.27
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 1.45 47.48
EBIT Growth (1y) % EBIT 1y % (Qtr) 0.00 20.13
EBT Growth (1y) % EBT 1y % (Qtr) 0.00 14.16
EPS Growth (1y) % EPS 1y % (Qtr) 4.29 67.50
FCF Growth (1y) % FCF 1y % (Qtr) 21.89 296.60
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 1.33 46.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.69 0.67
Cash Payout Ratio Cash Payout (Qtr) 0.20 0.01
Cash Ratio Cash Ratio (Qtr) 0.60 1.22
Current Ratio Curr Ratio (Qtr) 1.34 2.59
Debt to Equity Ratio Debt/Equity (Qtr) 2.52 -0.96
Interest Cover Ratio Int Coverage (Qtr) 0.00 -14.20
Times Interest Earned Times Interest Earned (Qtr) 0.00 -14.20
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 25.30 -548.16
EBIT Margin % EBIT Margin % (Qtr) 21.41 -199.84
EBT Margin % EBT Margin % (Qtr) 21.41 -607.20
Gross Margin % Gross Margin % (Qtr) 70.30 51.88
Net Profit Margin % Net Margin % (Qtr) 17.70 -610.00