Critical Contrast: NetApp (NTAP) vs. Its Competitors

NetApp (NASDAQ:NTAP) is one of 82 public companies in the “Technology Hardware, Storage & Peripherals” industry, but how does it compare to its rivals? We will compare NetApp to similar companies based on the strength of its analyst recommendations, earnings, institutional ownership, valuation, risk, dividends and profitability.

Volatility & Risk

NetApp has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500. Comparatively, NetApp’s rivals have a beta of 1.56, suggesting that their average share price is 56% more volatile than the S&P 500.

Valuation and Earnings

This table compares NetApp and its rivals gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
NetApp	$6.92 billion	$1.28 billion	30.11
NetApp Competitors	$25.66 billion	$3.31 billion	11.45

NetApp’s rivals have higher revenue and earnings than NetApp. NetApp is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Dividends

NetApp pays an annual dividend of $2.08 per share and has a dividend yield of 1.1%. NetApp pays out 32.7% of its earnings in the form of a dividend. As a group, “Technology Hardware, Storage & Peripherals” companies pay a dividend yield of 2.4% and pay out 37.4% of their earnings in the form of a dividend. NetApp has increased its dividend for 1 consecutive years.

Insider and Institutional Ownership

92.2% of NetApp shares are held by institutional investors. Comparatively, 51.3% of shares of all “Technology Hardware, Storage & Peripherals” companies are held by institutional investors. 0.4% of NetApp shares are held by company insiders. Comparatively, 10.5% of shares of all “Technology Hardware, Storage & Peripherals” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares NetApp and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NetApp	18.43%	117.23%	13.09%
NetApp Competitors	-617.33%	-16.38%	1.29%

Analyst Ratings

This is a summary of recent ratings for NetApp and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NetApp	1	9	5	0	2.27
NetApp Competitors	1046	4264	7591	357	2.55

NetApp currently has a consensus price target of $169.33, suggesting a potential downside of 11.57%. As a group, “Technology Hardware, Storage & Peripherals” companies have a potential upside of 24.82%. Given NetApp’s rivals stronger consensus rating and higher probable upside, analysts plainly believe NetApp has less favorable growth aspects than its rivals.

Summary

NetApp rivals beat NetApp on 9 of the 15 factors compared.

About NetApp

NetApp, Inc. provides cloud-led and data-centric services to manage and share data on-premises, and private and public clouds worldwide. It operates in two segments, Hybrid Cloud and Public Could. The company offers intelligent data management software, such as NetApp ONTAP, NetApp Snapshot, NetApp SnapCenter Backup Management, NetApp SnapMirror Data Replication, NetApp SnapLock Data Compliance, and storage infrastructure solutions, including NetApp All-Flash FAS series, NetApp Fabric Attached Storage, NetApp E/EF series, and NetApp StorageGRID. In addition, it provides cloud storage and data services comprising NetApp Cloud Volumes ONTAP, Azure NetApp Files, Amazon FSx for NetApp ONTAP, NetApp Cloud Volumes Service for Google Cloud, and cloud operations services, such as NetApp Cloud Insights, Spot by NetApp, and Instaclustr. Further, the company offers application-aware data management service under the NetApp Astra name; and professional and support services, such as strategic consulting, professional, managed, and support services. Additionally, it provides assessment, design, implementation, and migration services. The company serves the energy, financial service, government, technology, internet, life science, healthcare service, manufacturing, media, entertainment, animation, video postproduction, and markets through a direct sales force and an ecosystem of partners. NetApp, Inc. was incorporated in 1992 and is headquartered in San Jose, California.