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Will NetApp (NTAP) Continue to Draw Investor Attention?
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Shares of NetApp Inc. (NTAP - Free Report) have outperformed the Zacks categorized Computer-Storage Devices industry over the past one year. NetApp’s shares logged in a return of 35.6% compared with 15.5% generated by the industry.
The price performance of the Zacks Rank #1 (Strong Buy) stock is backed by solid estimate revisions. Its 2017 earnings estimates were up nearly 17.9% over the last 60 days to $1.91 per share. Given its progress on the fundamentals and a robust Zacks Rank, the stock is likely to keep performing well in the quarters ahead.
In fact, the company is expected to gain momentum in the flash-based solutions space, with the newly introduced all-flash array. We believe that the company's recent product launches and acquisition (SolidFire) will drive the top line, while cost reduction initiatives will facilitate margin expansion over the long run.
What’s Driving the Stock?
NetApp noted strong demand for Clustered ONTAP, which was deployed on 86% of FAS systems shipped in the second quarter of fiscal 2017, up from roughly 70% in the year-ago quarter. Clustered ONTAP enables seamless enterprise data management across flash, disk as well as public and private cloud environments.
With Clustered ONTAP, enterprises can consolidate multiple workloads into a single repository, dramatically improving the efficiency of their enterprise storage infrastructure. The strong demand is validated by growing unit shipments, which increased 14% year over year.
The installed base of FAS systems continues to grow and Clustered ONTAP is now running on approximately 36% of systems in this large and growing installed base.
NetApp’s latest ONTAP 9 has seen strong adoption since its release four months ago. During the second quarter, the company expanded ONTAP 9’s features with built-in multichannel capable inscription for improve data security, support for massively scalable high performance NAS containers and greatly simplified provision in operations for enterprise applications.
In the reported quarter,, NetApp’s all flash array business tripled year over year to an annualized net revenue run rate of over $1 billion. The business includes all flash FAS, EF and SolidFire product and services. During the quarter, the company shipped more than 200 petabytes of flash.
During the quarter, NetApp refreshed its portfolio of ONTAP powered hybrid in all flash arrays and also enhanced ONTAP Select to support flash in commodity servers. The new hybrid array systems address the needs of large enterprise data centers as well as small enterprises and mid-size businesses.
The new product offers increased speed and responsiveness compared to the company’s previous hybrid arrays. These can scale up to 14 petabytes in a single system and to 172 petabytes in a cluster.
NetApp has expanded ONTAP cloud features to include Microsoft (MSFT - Free Report) Azure and announced cloud control for Microsoft Office 365. The solution supports data retention in cloud services such as Amazon’s (AMZN - Free Report) S3 and Azure as well as on-premise storage.
Further, NetApp launched private storage as a service, an OpEx based consumption model available to a growing partner delivery ecosystem.
Further, the company provided an encouraging guidance. For third-quarter fiscal 2017, NetApp expects non-GAAP earnings in a range of 72–77 cents per share. The Zacks Consensus Estimate is pegged at 59 cents,
Net revenues are anticipated to be in a range of $1.325 to $1.475 billion. At the midpoint, the guidance implies a sequential increase of approximately 4% and a year-over-year increase of 1%.
NetApp believes that strong strategic solutions growth will improve product revenue growth trajectory in the rest of fiscal 2017.
The stock’s long-term earnings per share growth rate is 11.23%.
TiVo has a long-term earnings per share growth rate of 10%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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Will NetApp (NTAP) Continue to Draw Investor Attention?
Shares of NetApp Inc. (NTAP - Free Report) have outperformed the Zacks categorized Computer-Storage Devices industry over the past one year. NetApp’s shares logged in a return of 35.6% compared with 15.5% generated by the industry.
The price performance of the Zacks Rank #1 (Strong Buy) stock is backed by solid estimate revisions. Its 2017 earnings estimates were up nearly 17.9% over the last 60 days to $1.91 per share. Given its progress on the fundamentals and a robust Zacks Rank, the stock is likely to keep performing well in the quarters ahead.
In fact, the company is expected to gain momentum in the flash-based solutions space, with the newly introduced all-flash array. We believe that the company's recent product launches and acquisition (SolidFire) will drive the top line, while cost reduction initiatives will facilitate margin expansion over the long run.
What’s Driving the Stock?
NetApp noted strong demand for Clustered ONTAP, which was deployed on 86% of FAS systems shipped in the second quarter of fiscal 2017, up from roughly 70% in the year-ago quarter. Clustered ONTAP enables seamless enterprise data management across flash, disk as well as public and private cloud environments.
With Clustered ONTAP, enterprises can consolidate multiple workloads into a single repository, dramatically improving the efficiency of their enterprise storage infrastructure. The strong demand is validated by growing unit shipments, which increased 14% year over year.
The installed base of FAS systems continues to grow and Clustered ONTAP is now running on approximately 36% of systems in this large and growing installed base.
NetApp’s latest ONTAP 9 has seen strong adoption since its release four months ago. During the second quarter, the company expanded ONTAP 9’s features with built-in multichannel capable inscription for improve data security, support for massively scalable high performance NAS containers and greatly simplified provision in operations for enterprise applications.
In the reported quarter,, NetApp’s all flash array business tripled year over year to an annualized net revenue run rate of over $1 billion. The business includes all flash FAS, EF and SolidFire product and services. During the quarter, the company shipped more than 200 petabytes of flash.
During the quarter, NetApp refreshed its portfolio of ONTAP powered hybrid in all flash arrays and also enhanced ONTAP Select to support flash in commodity servers. The new hybrid array systems address the needs of large enterprise data centers as well as small enterprises and mid-size businesses.
The new product offers increased speed and responsiveness compared to the company’s previous hybrid arrays. These can scale up to 14 petabytes in a single system and to 172 petabytes in a cluster.
NetApp has expanded ONTAP cloud features to include Microsoft (MSFT - Free Report) Azure and announced cloud control for Microsoft Office 365. The solution supports data retention in cloud services such as Amazon’s (AMZN - Free Report) S3 and Azure as well as on-premise storage.
Further, NetApp launched private storage as a service, an OpEx based consumption model available to a growing partner delivery ecosystem.
Further, the company provided an encouraging guidance. For third-quarter fiscal 2017, NetApp expects non-GAAP earnings in a range of 72–77 cents per share. The Zacks Consensus Estimate is pegged at 59 cents,
Net revenues are anticipated to be in a range of $1.325 to $1.475 billion. At the midpoint, the guidance implies a sequential increase of approximately 4% and a year-over-year increase of 1%.
NetApp believes that strong strategic solutions growth will improve product revenue growth trajectory in the rest of fiscal 2017.
The stock’s long-term earnings per share growth rate is 11.23%.
Stock to Consider
Another stock in the broader technology sector carrying the same rank is TiVo Corporation . You can see the complete list of today’s Zacks #1 Rank stocks here.
TiVo has a long-term earnings per share growth rate of 10%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>