Shareholders will be ecstatic, with their stake up 20% over the past week following NetApp, Inc.'s (NASDAQ:NTAP) latest quarterly results. It looks like a credible result overall - although revenues of US$1.6b were in line with what the analysts predicted, NetApp surprised by delivering a statutory profit of US$1.48 per share, a notable 20% above expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from NetApp's 17 analysts is for revenues of US$6.51b in 2025. This would reflect an okay 5.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to accumulate 7.7% to US$4.92. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$6.48b and earnings per share (EPS) of US$4.71 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 9.3% to US$99.13. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values NetApp at US$120 per share, while the most bearish prices it at US$78.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the NetApp's past performance and to peers in the same industry. The analysts are definitely expecting NetApp's growth to accelerate, with the forecast 4.2% annualised growth to the end of 2025 ranking favourably alongside historical growth of 2.1% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 4.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that NetApp is expected to grow at about the same rate as the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around NetApp's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for NetApp going out to 2026, and you can see them free on our platform here..
You can also see our analysis of NetApp's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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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.