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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Netapp, Inc. (XNAS:NTAP) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
NTAP
Name:
NETAPP, INC. (XNAS:NTAP)
Sector:
191.00M
Industry:
Computer Hardware
CEO:
Mr. George Kurian
Total Employees:
12,000
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 1764.61% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF NETAPP, INC.(NTAP) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND COMPUTER HARDWARE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
71.28
One Month Price Target:
$71.75
Six Month Price Target :
$74.09
Likely Price in One Year's Time:
Ticker:
$76.9
Likely Trading Range Today Under (Normal Volatility)
$71.01
Price Upper limit ($) :
$71.63
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$67.6
This week:
$63.06
This month :
$54.83
Other Primary facts
Market Cap:
15.37B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
217.37M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.62%
-14.48%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$88.34
$80.50
$54.22
$62.06
Medium risk (<10%) entry points
Buy Call
Sell Call
$77.94
Buy Put:
Sell Put:
$76.27
$64.60
$66.29
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
NTAP
Sharpe Ratio:
1.85%
Comparison:
NTAP, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -43.10% lower than the industry
& is -18.84% lower than the market/S&P 500 average
Average Returns/Yield of
NTAP
Daily returns:
0.06%
Weekly returns:
0.28%
Monthly returns:
1.12%
Yearly returns:
26.14%
Comparison of returns:
Average annual returns/yield (last 3 years) is -48.75% below industry average
Classification:
NTAP, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
1
Statistical test of Returns:
NTAP has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.54%
Weekly Volatility:
5.68%
Monthly Volatility:
11.36%
Yearly Volatility:
39.34%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.79%
Volatility in last five trading days has been -69.06% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.16%
Weekly VaR:
-11.54%
Monthly VaR:
-23.07%
How Much Can the price of
NTAP
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-20%
Worst case (decline):
-79.92%
This translates to price declining to:
$57.19
This translates to price declining to:
$14.31
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
NTAP is a 62.84% riskier investment compared to the market/S&P 500 & is 39.50% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -20.13% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
NTAP
Beta in relation to market/S&P 500--1.17
Expected beta in 1 year's time:
0.784
Expected beta in 3 year's time:
1.108
Unlevered (debt free) Beta:
0.268
Beta in relation to Nasdaq (XNAS):
0.832
Beta in relation to all global stocks::
0.703
Beta Comparison & Analysis
Beta of competitors/peers::
1.527
Beta is -23.23% lower than peers
Average Industry Beta:
1.224
Beta is -4.23% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
75.77%
Sustainable growth rate is 68.61% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.022
Alpha is -84.83% below industry average alpha yield
Alpha is 141% higher than market/& is unsustainably high
Analysis of Cost of Capital of
NTAP
Equity cost of capital:
0.112
Equity cost of capital is -3.08% below industry mean WACC
Unlevered (without debt) cost of capital:
2.55%
Before-tax cost of debt:
1.24%
After-tax cost of debt:
0.98%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.98%
WACC is -16.45% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$29.07
Revenue growth rate per share of (3Y):
21.52
Annual revenue growth rate is -67.19% below industry average
EPS:
$4.09
Expected Annual growth rate of EPS (3Y):
-1.32%
Expected future EPS growth rate is -106.27% lower than the Computer Hardware industry
Free cash flow (FCF) per share:
$4.61
Balance sheet equity growth per share: 140.88%
Equity growth rate per share is -8424.40% lower than the industry
Debt per share
$13.08
EBITDA per share
$6.10
Valuation Analysis Today of
NTAP
P/E Ratio:
17.11
P/E Ratio of Competitors/Peers:
281.4
P/E ratio is -93.92% lower than main peers & is 27.66% higher than the industry
Stock price/value with industry average P/E ratio: $54.83
NTAP is 30.00% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $64.36
Present value of the expected future dividends only: $18.74
P/S (Price to Sales ratio):
2.45
Price to sales ratio is -13.10% below the industry mean
P/B (Price to book value ratio):
21.52
Price to free cash flow: 15.46
Price to free cash flow ratio is -69.64% lower than the industry
Net income growth rate (3Y):
659.71%
Net income growth rate is 615.40% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 11.95%
Dividend yeild: 2.81%
Previous Dividend: $0.50
Previous adjusted dividend: $0.50
Previous Dividend: $2.00
Expected next dividend best case: $0.51
Expected next dividend worst case: $0.49
Average dividend payment (long-term): $0.49
Average dividend increase/decrease (growth rate) % per period: 0.46%
Expected next dividend payment date: 26/07/2022
Expected next dividend record date: 07/07/2022
Expected next dividend declaration date: 24/05/2022
Previous dividend payment date: 27/04/2022
Previous dividend record date: 04/08/2022
Previous dividend declaration date: 23/02/2022
Dividend History:
2022-04-07--$0.50
2021-10-07--$0.50
2021-04-08--$0.48
2022-01-06--$0.50
2021-07-08--$0.50
2021-01-07--$0.48
Dividend growth rate is -102.43% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
395.00%
Net debt to equity ratio:
-221.53%
Debt to assets ratio:
31.06%
Net debt to assets ratio:
-17.42%
Debt-to-asset ratio is -49.40% below industry average
Ability to repay debt:
Interest coverage ratio:
36.81
Interest coverage ratio is 646.17% more than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.662
Statistical significance of correlation:
NTAP has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.599
Stock price is 10.42% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.599
Correlation of price movement with Nasdaq (^IXIC):
0.032
Covariance of price movement with the market:
0.047
Kurtosis
4.972
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.157
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
NTAP
Gross Profit Margin Ratio:
267%
Operating Profit Margin Ratio:
18.31%
Operating profit margin is 142.37% higher than the industry
Net Profit Margin Ratio:
267%
Effective Tax Rate:
14.43%
Effective tax rate is -10.58% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
130.14%
Return on equity (ROE) is 872.99% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
10.23%
Return on assets (ROA) is 37.16% higher than the industry
Financial Leverage:
1.5x
Current Ratio:
1.81
Current ratio is -21.45% below industry average
Cash Conversion Cycle (days):
-23.3
Cash conversion cycle is -129.22% below industry average
The remaining useful life of property plant & equipment is: 3.2 years
Stock based compensation to net income ratio:
5.66%
In-depth Efficiency Analysis
Revenue generated per employee:
526.5K
Each employee generates -27% less revenue than industry average revenue per employee
EBITDA generated per employee:
110.4K
Each employee generates 8% more EBITDA than industry average revenue per employee
Profit generated per employee:
78.1K
Each employee generates 12% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
15.9K
Each employee generates 29% more free cash flow than industry average revenue per employee
Assets/Capital per employee
293.8K
Each employee generates 29% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 4.01%
Growth rate in R&D investment/expenditure is -337.20% lower than the industry
Competitors/Peer firms of
NTAP
MONOLITHIC POWER SYSTEMS, INC. (XNAS:MPWR)
WESTERN DIGITAL CORPORATION (XNAS:WDC)
SS&C TECHNOLOGIES HOLDINGS, INC. (XNAS:SSNC)
ZoomInfo Technologies Inc (XNAS:ZI)
ENPHASE ENERGY, INC. (XNAS:ENPH)
Affirm Holdings Inc (XNAS:AFRM)
SPLUNK INC. (XNAS:SPLK)
NICE LTD (XNAS:NICE)
AKAMAI TECHNOLOGIES, INC. (XNAS:AKAM)
Current Analyst Ratings
Strong buy�13%
Buy�46%
Hold�54%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
4/29/22
Revenue:
6.32B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
2.10B
4.22B
881.00M
279.00M
2.14B
1.86B
9.00M
3.03B
3.00M
36.00M
194.00M
1.33B
1.16B
937.00M
1.10B
158.00M
937.00M
Statement of Cash Flow
Date:
Period:
46.00M
Differed Income Tax :
- 15000.00K
Stock Based Compensation :
53.00M
Change in Working Capital :
- 61000.00K
Accounts Receivables:
287.00M
Other Working Capital:
- 82000.00K
Other Non-Cash Items:
17.00M
Net Cash Provided by Operating Activities:
242.00M
Investments in PP&E:
- 51000.00K
Net Acquisitions:
- 14000.00K
Purchases of Investments:
- 5000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
7/30/21
2022
Q1
4.49B
55.00M
4.55B
655.00M
108.00M
321.00M
5.63B
792.00M
2.05B
97.00M
-
233.00M
353.00M
3.53B
-
9.16B
368.00M
53.00M
-
1.99B
694.00M
3.10B
2.84B
573.00M
5.33B
-
8.44B
550.00M
204.00M
- 34000.0K
-
July 30, 2021 at 6:00:00 AM
5.12B
720.00M
9.16B
-
2.90B
- 1595000.0K
16.00M
-
- 54000.00K
-
-
- 100000.00K
- 112000.00K
- 6000.00K
- 218000.00K
- 5000.00K
- 35000.00K
4.50B
4.54B
242.00M
- 51000.00K
191.00M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
NTAP
2023
2024
2025
2026
2027
$77.28
$376.77
$406.46
$438.48
$473.02