Comparing NetApp (NTAP) and Its Competitors

NetApp (NASDAQ:NTAP) is one of 81 publicly-traded companies in the “Technology Hardware, Storage & Peripherals” industry, but how does it contrast to its peers? We will compare NetApp to related companies based on the strength of its profitability, earnings, dividends, institutional ownership, analyst recommendations, valuation and risk.

Analyst Recommendations

This is a summary of current recommendations for NetApp and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NetApp	0	10	6	0	2.38
NetApp Competitors	1066	4316	7614	362	2.54

NetApp presently has a consensus target price of $192.07, indicating a potential upside of 3.49%. As a group, “Technology Hardware, Storage & Peripherals” companies have a potential upside of 17.86%. Given NetApp’s peers stronger consensus rating and higher possible upside, analysts clearly believe NetApp has less favorable growth aspects than its peers.

Risk and Volatility

NetApp has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500. Comparatively, NetApp’s peers have a beta of 1.63, suggesting that their average stock price is 63% more volatile than the S&P 500.

Earnings & Valuation

This table compares NetApp and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
NetApp	$6.92 billion	$1.28 billion	26.18
NetApp Competitors	$24.36 billion	$3.81 billion	9.35

NetApp’s peers have higher revenue and earnings than NetApp. NetApp is trading at a higher price-to-earnings ratio than its peers, 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 29.3% of its earnings in the form of a dividend. As a group, “Technology Hardware, Storage & Peripherals” companies pay a dividend yield of 3.3% and pay out 40.6% of their earnings in the form of a dividend. NetApp has raised its dividend for 1 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NetApp	19.18%	119.13%	14.39%
NetApp Competitors	-493.11%	-32.92%	4.60%

Institutional and Insider Ownership

92.2% of NetApp shares are held by institutional investors. Comparatively, 51.5% 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, 10.8% of shares of all “Technology Hardware, Storage & Peripherals” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

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

NetApp Company Profile

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.