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Here's How NetApp (NTAP) Looks Just Ahead of Q3 Earnings
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NetApp (NTAP - Free Report) is scheduled to release third-quarter fiscal 2021 earnings on Feb 24.
The company anticipates non-GAAP earnings for third-quarter fiscal 2021 between 94 cents and $1.02 per share. The Zacks Consensus Estimate for earnings stands at $1.01, suggesting a decline of 12.9% from the year-ago reported figure. Notably, the figure has remained stable in the past 30 days.
Moreover, net revenues are anticipated to be $1.34-$1.49 billion. The consensus for fiscal third-quarter revenues is pegged at $1.43 billion, indicating growth of 2.1% from the prior-year quarter.
Notably, the company beat estimates in three of the trailing four quarters and missed the same once. It has a trailing four-quarter earnings surprise of 35.06%, on average.
Factors to Note
Coronavirus induced work-from-home wave that has led to increasing adoption of cloud-based storage might have driven adoption of NetApp’s hybrid multi-cloud offerings, cloud data services and private cloud offerings. This is expected to get reflected in the fiscal third-quarter revenues.
Besides, incremental adoption of Microsoft Azure NetApp Files is anticipated to have bolstered Public Cloud Services business’ annualized recurring revenues (ARR) in the fiscal third quarter. Notably, the metric was $216 million in the last reported quarter, up 200% on a year-over-year basis. Synergies from buyouts of Spot, Cloud Jumper and Talon are expected to have contributed to ARR in the quarter under review.
Growing clout of the company’s new solution for containerized applications under its Spot by NetApp portfolio, which enables organizations to make multi-cloud management easier and reduce costs, may have aided performance in the quarter to be reported.
Markedly, Spot's Elastigroup is enabling customers to accelerate production workloads in Microsoft Azure Spot Virtual Machines (VMs), with up to 90% cost savings.
These factors are instilling investors' optimism in the stock. Notably, shares of NetApp have returned 28.2% in the past year, compared with the industry's rally of 21.2%.
However, broad-based macroeconomic weakness led by coronavirus crisis has been compelling enterprises to trim capital expenditure, which is anticipated to have weighed on NetApp’s storage business’ performance in the to-be-reported quarter.
For the fiscal third quarter, the Zacks Consensus Estimate for Product revenues is pegged at $762 million, indicating a year-over-year decline of 3.2%.
Nevertheless, increased momentum of the company’s HCI (or hyper converged infrastructure) and cloud partnerships with Amazon’s (AMZN - Free Report) Amazon Web Services, VMware, and Alphabet’s (GOOGL - Free Report) Google Cloud may have contributed to the to-be-reported quarter’s performance.
For the fiscal third quarter, the Zacks Consensus Estimate for Hardware Maintenance & Other Services revenues stands at $362 million, suggesting year-over-year improvement of 2.3%.
Meanwhile, the consensus for Software Maintenance revenues is pegged at $303 million, indicating year-over-year growth of 15.2%.
Further, improvement in NAND flash pricing owing to coronavirus-led supply chain constraints is likely to have driven revenue growth, which in turn might have favored Product gross margin performance in the fiscal third quarter.
During the fiscal second quarter, the company’s all-flash revenues totaled $632 million, up 15% on a year-over-year basis.
The company has also added advanced capabilities to its NetApp ONTAP data management software to help organizations in accelerating digital transformation, optimizing costs and improving security. Further, traction witnessed by latest NetApp SolidFire Enterprise SDS solution and flexible NetApp Keystone Flex Subscription service, bode well.
Furthermore, NetApp made Azure NetApp files available on Microsoft Azure in the government region data centers. This high-performance file storage service will enable federal, state, and local agencies to easily conform with the stringent government security and regulatory compliance requirements.
Notably, growing expenses on expansion of product portfolio and product enhancements via acquisitions or otherwise bode well in the long term. However, increasing expenditure amid stiff competition from fellow storage peers including Pure Storage (PSTG - Free Report) might have limited margin expansion in the fiscal third quarter.
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You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Here's How NetApp (NTAP) Looks Just Ahead of Q3 Earnings
NetApp (NTAP - Free Report) is scheduled to release third-quarter fiscal 2021 earnings on Feb 24.
The company anticipates non-GAAP earnings for third-quarter fiscal 2021 between 94 cents and $1.02 per share. The Zacks Consensus Estimate for earnings stands at $1.01, suggesting a decline of 12.9% from the year-ago reported figure. Notably, the figure has remained stable in the past 30 days.
Moreover, net revenues are anticipated to be $1.34-$1.49 billion. The consensus for fiscal third-quarter revenues is pegged at $1.43 billion, indicating growth of 2.1% from the prior-year quarter.
Notably, the company beat estimates in three of the trailing four quarters and missed the same once. It has a trailing four-quarter earnings surprise of 35.06%, on average.
Factors to Note
Coronavirus induced work-from-home wave that has led to increasing adoption of cloud-based storage might have driven adoption of NetApp’s hybrid multi-cloud offerings, cloud data services and private cloud offerings. This is expected to get reflected in the fiscal third-quarter revenues.
Besides, incremental adoption of Microsoft Azure NetApp Files is anticipated to have bolstered Public Cloud Services business’ annualized recurring revenues (ARR) in the fiscal third quarter. Notably, the metric was $216 million in the last reported quarter, up 200% on a year-over-year basis. Synergies from buyouts of Spot, Cloud Jumper and Talon are expected to have contributed to ARR in the quarter under review.
Growing clout of the company’s new solution for containerized applications under its Spot by NetApp portfolio, which enables organizations to make multi-cloud management easier and reduce costs, may have aided performance in the quarter to be reported.
Markedly, Spot's Elastigroup is enabling customers to accelerate production workloads in Microsoft Azure Spot Virtual Machines (VMs), with up to 90% cost savings.
These factors are instilling investors' optimism in the stock. Notably, shares of NetApp have returned 28.2% in the past year, compared with the industry's rally of 21.2%.
However, broad-based macroeconomic weakness led by coronavirus crisis has been compelling enterprises to trim capital expenditure, which is anticipated to have weighed on NetApp’s storage business’ performance in the to-be-reported quarter.
For the fiscal third quarter, the Zacks Consensus Estimate for Product revenues is pegged at $762 million, indicating a year-over-year decline of 3.2%.
Nevertheless, increased momentum of the company’s HCI (or hyper converged infrastructure) and cloud partnerships with Amazon’s (AMZN - Free Report) Amazon Web Services, VMware, and Alphabet’s (GOOGL - Free Report) Google Cloud may have contributed to the to-be-reported quarter’s performance.
For the fiscal third quarter, the Zacks Consensus Estimate for Hardware Maintenance & Other Services revenues stands at $362 million, suggesting year-over-year improvement of 2.3%.
Meanwhile, the consensus for Software Maintenance revenues is pegged at $303 million, indicating year-over-year growth of 15.2%.
Further, improvement in NAND flash pricing owing to coronavirus-led supply chain constraints is likely to have driven revenue growth, which in turn might have favored Product gross margin performance in the fiscal third quarter.
During the fiscal second quarter, the company’s all-flash revenues totaled $632 million, up 15% on a year-over-year basis.
NetApp, Inc. Price and EPS Surprise
NetApp, Inc. price-eps-surprise | NetApp, Inc. Quote
The company has also added advanced capabilities to its NetApp ONTAP data management software to help organizations in accelerating digital transformation, optimizing costs and improving security. Further, traction witnessed by latest NetApp SolidFire Enterprise SDS solution and flexible NetApp Keystone Flex Subscription service, bode well.
Furthermore, NetApp made Azure NetApp files available on Microsoft Azure in the government region data centers. This high-performance file storage service will enable federal, state, and local agencies to easily conform with the stringent government security and regulatory compliance requirements.
Notably, growing expenses on expansion of product portfolio and product enhancements via acquisitions or otherwise bode well in the long term. However, increasing expenditure amid stiff competition from fellow storage peers including Pure Storage (PSTG - Free Report) might have limited margin expansion in the fiscal third quarter.
Currently, NetApp carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>