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NetApp (NTAP) Stock Sinks As Market Gains: Here's Why

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NetApp (NTAP - Free Report) closed at $117.24 in the latest trading session, marking a -1.54% move from the prior day. This change lagged the S&P 500's daily gain of 1.07%. At the same time, the Dow added 1.12%, and the tech-heavy Nasdaq gained 1.37%.

The data storage company's stock has dropped by 4.87% in the past month, falling short of the Computer and Technology sector's gain of 2.68% and the S&P 500's gain of 1.08%.

Market participants will be closely following the financial results of NetApp in its upcoming release. The company is forecasted to report an EPS of $1.89, showcasing a 1.07% upward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $1.69 billion, up 1.68% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $7.77 per share and a revenue of $6.76 billion, indicating changes of +7.17% and +2.85%, respectively, from the former year.

Any recent changes to analyst estimates for NetApp should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. NetApp is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, NetApp is holding a Forward P/E ratio of 15.33. This denotes a discount relative to the industry average Forward P/E of 19.07.

It is also worth noting that NTAP currently has a PEG ratio of 2.09. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Computer- Storage Devices industry currently had an average PEG ratio of 2.09 as of yesterday's close.

The Computer- Storage Devices industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 90, positioning it in the top 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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