Nutanix and NetApp (NTAP) recently agreed to link NetApp Intelligent Data Infrastructure with the Nutanix Cloud Platform, aiming to give enterprises more flexibility in managing virtualization, storage, and cyber resilience across mixed IT environments.
See our latest analysis for NetApp.
NetApp shares trade at US$95.93 after a recent 7 day share price return of a 7.18% decline and a 90 day share price return of an 8.98% decline. However, the 1 year total shareholder return of 18.33% and 3 year total shareholder return of 53.84% point to longer term momentum that recent pullbacks contrast against, alongside news around new alliances and upcoming earnings.
If this sort of cloud and AI driven story interests you, it could be a good time to look wider and check out 36 AI infrastructure stocks
With NetApp trading at US$95.93 and sitting at a 46% discount to one intrinsic value estimate and roughly 23% below the average analyst target, you have to ask whether this is a genuine opening or whether the market is already factoring in future growth.
Most Popular Narrative: 18.7% Undervalued
With NetApp closing at $95.93 against a narrative fair value of about $117.93, the current price sits well below that framework and puts the spotlight on what is driving this gap.
Substantial growth in Keystone Storage-as-a-Service (up ~80% year-over-year) and increased deferred revenue (+9% year-over-year) indicate growing preference for subscription-based and as-a-service storage, supporting higher revenue visibility and margin expansion as mix continues to shift toward high-value services.
Want to see what earnings profile and margin path line up with that valuation gap? The most followed narrative leans on a measured growth rate, thicker margins and a future earnings multiple that sits well below many large tech names.
Result: Fair Value of $117.93 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, there is still a real risk that higher memory costs and intense competition in cloud storage could compress margins enough to challenge this underpriced narrative.
Find out about the key risks to this NetApp narrative.
Next Steps
With sentiment split between opportunity and caution, this is the moment to look through the numbers yourself, weigh the potential rewards, decide where you stand, and then review the 6 key rewards
Looking for more investment ideas?
If you are serious about building a stronger portfolio, do not stop with a single stock. Use targeted screeners to uncover ideas that match your goals and risk comfort.
- Spot potential mispricings early by checking companies that look attractively valued on quality metrics with the 58 high quality undervalued stocks.
- Strengthen the core of your portfolio by focusing on financially robust businesses through the solid balance sheet and fundamentals stocks screener (41 results).
- Add a stream of income to your holdings by reviewing companies offering higher yields using the 11 dividend fortresses.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com