Financial Contrast: NetApp (NTAP) versus The Competition

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

Profitability

This table compares NetApp and its competitors’ 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	-564.27%	-14.59%	4.09%

Dividends

NetApp pays an annual dividend of $2.08 per share and has a dividend yield of 1.0%. 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 3.3% and pay out 41.4% of their earnings in the form of a dividend. NetApp has increased its dividend for 1 consecutive years.

Valuation and Earnings

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

	Gross Revenue	Net Income	Price/Earnings Ratio
NetApp	$6.92 billion	$1.28 billion	32.23
NetApp Competitors	$23.84 billion	$3.70 billion	6.67

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

Volatility & Risk

NetApp has a beta of 1.45, meaning that its stock price is 45% more volatile than the S&P 500. Comparatively, NetApp’s competitors have a beta of 1.55, meaning that their average stock price is 55% more volatile than the S&P 500.

Insider & Institutional Ownership

92.2% of NetApp shares are owned by institutional investors. Comparatively, 51.5% of shares of all “Technology Hardware, Storage & Peripherals” companies are owned by institutional investors. 0.4% of NetApp shares are owned by insiders. Comparatively, 10.8% of shares of all “Technology Hardware, Storage & Peripherals” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and target prices for NetApp and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NetApp	0	10	5	0	2.33
NetApp Competitors	1043	4273	7535	357	2.55

NetApp currently has a consensus target price of $172.33, suggesting a potential downside of 15.93%. As a group, “Technology Hardware, Storage & Peripherals” companies have a potential upside of 14.84%. Given NetApp’s competitors stronger consensus rating and higher probable upside, analysts clearly believe NetApp has less favorable growth aspects than its competitors.

Summary

NetApp competitors 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.