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NetApp (NTAP) Takes Over Data Mechanics: Major Takeaways

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NetApp (NTAP - Free Report) recently announced the takeover of Data Mechanics for an undisclosed sum. Data Mechanics is a managed platform that enables clients to easily run Apache Spark on Kubernetes.

Following the acquisition, Data Mechanics team and IP will become a part of Spot by NetApp portfolio and team. The acquisition will help NetApp develop its latest Spot Wave offering.

In March 2021, NetApp rolled out Spot Wave by NetApp solution that will assist enterprises lower costs while developing data applications through a serverless infrastructure to deploy Apache Spark on Kubernetes platform.

Data Mechanics offerings will aid NetApp clients to utilize Apache Spark and Kubernetes to further their data and cloud projects as well as contain costs, noted the company. 

NetApp, Inc. Price and Consensus

 

NetApp, Inc. Price and Consensus

NetApp, Inc. price-consensus-chart | NetApp, Inc. Quote

 

The latest acquisition is expected to enable NetApp to acquire new customers that is likely to drive the top line in the quarters ahead and instil investors’ confidence in the stock.

In the past year, shares of NetApp have rallied 97.1% compared with industry’s return of 64.3%.

Opportunities Aplenty For NetApp

NetApp is benefiting from continued momentum in all-flash business and Public Cloud Services. The company is also gaining from increasing clout of cloud-integrated all-flash solutions; File, Block and Object Software products; and hybrid multi-cloud offerings.

Rapid adoption of Microsoft Azure NetApp Files is a major catalyst driving the company’s Public Cloud Services, which recorded annualized recurring revenues of $301 million in the fourth quarter of fiscal 2021, up 171% year over year.

The company’s acquisition strategy is also helping to expand its market share. Apart from the recent takeover of Data Mechanics, it had acquired cloud services startup –– Spot –– in July last year.

The acquisition of Spot bolstered NetApp’s Application Driven Infrastructure capabilities. Spot’s compute platform provides customers with solutions that help optimize workloads, while maintaining both service-level objective (SLO) and service-level agreement (SLA).  

In April 2020, the company acquired CloudJumper — a cloud software company specializing  virtual desktop infrastructure (VDI) solutions and remote desktop services' (RDS) domain.  

In March 2020, NetApp acquired Talon Storage to boost its portfolio of cloud data services. By adding Talon FAST software to NetApp Cloud Volumes solution, NetApp customers can consolidate and centralize entire IT storage infrastructure on to the public cloud environments.

The company’s acquisition of SolidFire for nearly $870 million remains one of its most important takeovers. The buyout bolstered NetApp’s flash-based storage product portfolio and helps it maintain a leading position in the flash storage domain.

In the last reported quarter, the company’s All-Flash Array Business annualized net revenue run rate came in at $2.9 billion, up 11% year over year.

Nonetheless, higher expenditures on product development amid intensifying competition from fellow storage peers including Pure Storage (PSTG - Free Report) are a concern.

Zacks Rank & Stocks to Consider

Currently, NetApp carries a Zacks Rank #3 (Hold).

etter-ranked stocks worth consideration in the broader technology sector are Facebook and Alphabet (GOOGL - Free Report) . Both the stocks sport a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term earnings growth rate for Facebook and Alphabet is currently pegged at 20.1% and 18.1%, respectively.

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