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Can NetApp (NTAP) Retain Its Earnings Streak Alive in Q1?
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NetApp Inc. (NTAP - Free Report) is scheduled to report first-quarter fiscal 2019 results on Aug 15.
In the last reported quarter, NetApp delivered non-GAAP earnings of 1.05 per share, beating the Zacks Consensus Estimate by 4 cents. The figure surged 22.1% on a year-over-year basis and was also above the guided range.
NetApp has surpassed the Zacks Consensus Estimate in the trailing four quarters with an average positive earnings surprise of 11.02%.
The company delivered fourth-quarter fiscal 2018 revenues of $1.64 billion, surging 11% on a year-over-year basis. The figure also beat the Zacks Consensus Estimate of $1.59 billion.
Notably, NetApp stock has returned 49.9% year to date, substantially outperforming industry’s rally of 9.6%.
What to Expect?
For first-quarter fiscal 2019, NetApp expects non-GAAP earnings in the range of 76-82 cents per share.
We note that the Zacks Consensus Estimate has witnessed upward revision over the past seven days. The Zacks Consensus Estimate for the quarter under review is pegged at 80 cents, reflecting a year-over-year increase of approximately 29%.
Net revenues are anticipated to be in the range of $1.365-$1.465 billion, which implies growth of 6.8% at the mid-point from the year-ago quarter. The Zacks Consensus Estimate is pegged at $1.423 billion, up approximately 7.3% from the year-ago quarter.
Factors Likely To Influence Q1 Results
NetApp’s transition to data fabric strategy (a software-defined approach to data management) is likely to aid the company in exploring new business opportunities. Further, increased momentum of its hybrid cloud business and expanded new cloud partnershipsis anticipated to boost top-line growth.
NetApp partnered with Alphabet’s (GOOGL - Free Report) Google and introduced NetApp Cloud Volumes for Google Cloud Platform (“GCP”) to aid companies “cloudify” their businesses. The company unveiled new AFF A800, enterprise platform, enhancing its cloud offerings further. The new offering, NetApp Cloud Volumes for GCP, was recently updated with new features including support for SMB protocol. This is expected to aid users to deploy workloads on GCP, which is a positive.
NetApp is anticipated to capitalize on growth areas of the market with its strategic solutions in the to-be reported quarter. Revenues from strategic solutions increased 25% on a year-over-year basis in the last reported quarter. This segment comprises 74% of the company’s product revenues,up 18.7% yearoveryear.
NetApp’s expertise in the flash array market is aiding its popularity in storage area network (“SAN”). In the last reported quarter, the company’s all-flash array business surged 43% on a year-over-year basis. Its annualized net revenue run rate was $2.4 billion.
In the fourth quarter, NetApp’s converged infrastructure market witnessed growth of 16% on a year-over-year basis, driven primarily by strong numbers from all-flash FlexPod.
Recently, NetApp extended partnership with Cisco (CSCO - Free Report) with an aim to deliver new FlexPod solutions. NetApp’s data services with Cisco UCS Integrated Infrastructure will be leveraged by the new solutions. This development bodes well for company’s hyper-converged infrastructure business prospects.
Notably, the Zacks Consensus Estimate for Hardware Maintenance and Other Services revenues is pegged at $369 million compared with the year-ago reported figure of $368 million. Product revenues are estimated to be $820 million up from the year-ago reported figure of $723 million. Software Subscription revenues are anticipated to be around $237 million in first-quarter 2019 compared with the year-ago reported figure of $234 million.
We believe these factors will positively impact the company’s first-quarter results.
What the Zacks Model Unveils
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP.
The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
NetApp has a Zacks Rank #3 but an Earnings ESP of -0.25%, makes earnings beat prediction difficult.
Splunk Inc. is a stock in the same sector worth considering as our model shows that it has the right combination of elements to deliver an earnings beat in the upcoming release.
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Can NetApp (NTAP) Retain Its Earnings Streak Alive in Q1?
NetApp Inc. (NTAP - Free Report) is scheduled to report first-quarter fiscal 2019 results on Aug 15.
In the last reported quarter, NetApp delivered non-GAAP earnings of 1.05 per share, beating the Zacks Consensus Estimate by 4 cents. The figure surged 22.1% on a year-over-year basis and was also above the guided range.
NetApp has surpassed the Zacks Consensus Estimate in the trailing four quarters with an average positive earnings surprise of 11.02%.
The company delivered fourth-quarter fiscal 2018 revenues of $1.64 billion, surging 11% on a year-over-year basis. The figure also beat the Zacks Consensus Estimate of $1.59 billion.
Notably, NetApp stock has returned 49.9% year to date, substantially outperforming industry’s rally of 9.6%.
What to Expect?
For first-quarter fiscal 2019, NetApp expects non-GAAP earnings in the range of 76-82 cents per share.
We note that the Zacks Consensus Estimate has witnessed upward revision over the past seven days. The Zacks Consensus Estimate for the quarter under review is pegged at 80 cents, reflecting a year-over-year increase of approximately 29%.
Net revenues are anticipated to be in the range of $1.365-$1.465 billion, which implies growth of 6.8% at the mid-point from the year-ago quarter. The Zacks Consensus Estimate is pegged at $1.423 billion, up approximately 7.3% from the year-ago quarter.
Factors Likely To Influence Q1 Results
NetApp’s transition to data fabric strategy (a software-defined approach to data management) is likely to aid the company in exploring new business opportunities. Further, increased momentum of its hybrid cloud business and expanded new cloud partnershipsis anticipated to boost top-line growth.
NetApp partnered with Alphabet’s (GOOGL - Free Report) Google and introduced NetApp Cloud Volumes for Google Cloud Platform (“GCP”) to aid companies “cloudify” their businesses. The company unveiled new AFF A800, enterprise platform, enhancing its cloud offerings further. The new offering, NetApp Cloud Volumes for GCP, was recently updated with new features including support for SMB protocol. This is expected to aid users to deploy workloads on GCP, which is a positive.
NetApp is anticipated to capitalize on growth areas of the market with its strategic solutions in the to-be reported quarter. Revenues from strategic solutions increased 25% on a year-over-year basis in the last reported quarter. This segment comprises 74% of the company’s product revenues,up 18.7% yearoveryear.
NetApp’s expertise in the flash array market is aiding its popularity in storage area network (“SAN”). In the last reported quarter, the company’s all-flash array business surged 43% on a year-over-year basis. Its annualized net revenue run rate was $2.4 billion.
In the fourth quarter, NetApp’s converged infrastructure market witnessed growth of 16% on a year-over-year basis, driven primarily by strong numbers from all-flash FlexPod.
Recently, NetApp extended partnership with Cisco (CSCO - Free Report) with an aim to deliver new FlexPod solutions. NetApp’s data services with Cisco UCS Integrated Infrastructure will be leveraged by the new solutions. This development bodes well for company’s hyper-converged infrastructure business prospects.
Notably, the Zacks Consensus Estimate for Hardware Maintenance and Other Services revenues is pegged at $369 million compared with the year-ago reported figure of $368 million. Product revenues are estimated to be $820 million up from the year-ago reported figure of $723 million. Software Subscription revenues are anticipated to be around $237 million in first-quarter 2019 compared with the year-ago reported figure of $234 million.
We believe these factors will positively impact the company’s first-quarter results.
What the Zacks Model Unveils
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP.
The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
NetApp has a Zacks Rank #3 but an Earnings ESP of -0.25%, makes earnings beat prediction difficult.
NetApp, Inc. Price and EPS Surprise
NetApp, Inc. Price and EPS Surprise | NetApp, Inc. Quote
Stock That Warrants a Look
Splunk Inc. is a stock in the same sector worth considering as our model shows that it has the right combination of elements to deliver an earnings beat in the upcoming release.
Splunk has an Earnings ESP of +6.25% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>