# NetApp (NTAP.US)

Canonical: https://gigainvestors.com/s/NTAP

Analysis as of: 2026-10-16T07:30:41.899Z. Financial observations: FY1997–FY2027.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $214.70 per share; close as of 2026-10-15.

Estimated value: low $91.69 per share, central $101.96 per share, high $115.65 per share. Buy at or below the central value $101.96 per share. Valuation as of 2026-10-16T07:30:41.899Z; scenarios are not confidence intervals.

Expected annual return: 5.9% at the stated quote. About 5.9% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 3 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 0

- Operating margin variation: 0.16×

Chart: Operating margin; fiscal year observations.

- FY2018: 0.19×

- FY2019: 0.20×

- FY2020: 0.17×

- FY2021: 0.18×

- FY2022: 0.18×

- FY2023: 0.16×

- FY2024: 0.19×

- FY2025: 0.20×

- FY2026: 0.24×

- LTM to Jul 2026: 0.26×

### moat: pass

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC, median of available years: 25.8%

- ROIC, second-lowest year: 18.3%

- Typical minus recent gross margin: -4.1 pp

- Typical gross margin (annual median): 66.6%

- Recent gross margin (lower of latest and 3-year median): 70.7%

- Years with nonpositive capital: 10

- Capital spending / revenue: 2.8%

- ROIC including acquisitions, ten-year median: >100%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2018: 18.3%

- FY2019: 39.0%

- FY2020: 39.9%

- FY2021: 23.2%

- FY2022: 26.2%

- FY2023: 28.3%

- FY2024: 25.0%

- FY2025: 25.3%

- FY2026: 32.1%

- LTM to Jul 2026: 36.6%

### economics: pass

- Owner earnings / net income, 5-yr: 1.03×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $5.8B

- Net income, five-year total: $5.7B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: 0.3 pp

- Working capital / revenue, change between three-year averages: 1.9 pp

- Working capital / revenue, final three-year average: 12.8%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.00×

- FY2023: 1.01×

- FY2024: 1.10×

- FY2025: 1.06×

- FY2026: 1.00×

### management: pass

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 18.3% vs 25.3%

- Per-share earnings: 0.77 to 5.67 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -3.8%

- Ordinary dilution, 5-year annual growth: -2.3%

- Market cap gain: $11B

- Cumulative retained earnings: $113M

- Diluted shares, 10-year annual growth: -3.8%

- Diluted shares, 5-year annual growth: -2.3%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 28.3%

- Per-share value change: $4.90

- Per-share value, starting three-year median: $0.77

- Per-share value, ending three-year median: $5.67

- Buybacks concentrated in cheaper years (correlation): 0.65

- Average buyback yield: 6.4%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $1.2B

- Cumulative net income, 10 years: $9.0B

- ROIC, first three-year median: 18.3%

- ROIC, last three-year median: 25.3%

Chart: Earnings per share; fiscal year observations.

- FY2017: $1.81

- FY2018: $0.28

- FY2019: $4.51

- FY2020: $3.52

- FY2021: $3.23

- FY2022: $4.09

- FY2023: $5.79

- FY2024: $4.63

- FY2025: $5.67

- FY2026: $6.35

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: -7.4%

- Receivables to sales index (DSRI): 0.98×

- Restructuring years, last five: 2

- Stock compensation / operating cash flow: 18.5%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.62×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 2.07×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -5.0%

- FY2018: -14.2%

- FY2019: -2.0%

- FY2020: -3.2%

- FY2021: -6.4%

- FY2022: -2.7%

- FY2023: 1.7%

- FY2024: -7.1%

- FY2025: -3.0%

- FY2026: -7.4%

## Holders

- [Lee Ainslie](https://gigainvestors.com/mc): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 11.5% a year for ten years · sales +5.4%

Story as of 2026-10-16T09:59:16.769Z; price observation 2026-10-15.

Price needs cash profits to grow 11.5% a year for ten years

- 2025-05-29: NetApp Earnings Beat Estimates. Stock Falls On Guidance Miss. ([finance.yahoo.com](https://finance.yahoo.com/m/db8ee2f6-c99a-314f-be73-ac11bb2fb1da/netapp-earnings-beat.html))

- 2025-08-27: NetApp Inc (NASDAQ:NTAP) Q1 Fiscal 2026 Earnings Fall Short of Estimates, Shares Drop 9% ([chartmill.com](https://www.chartmill.com/news/NTAP/Chartmill-33700-NetApp-Inc-NASDAQNTAP-Q1-Fiscal-2026-Earnings-Fall-Short-of-Estimates-Shares-Drop-9))

- 2026-02-27: NetApp Faces Fiscal 2027 Margin Pressure From Rising Memory Costs, Morgan Stanley Says ([finance.yahoo.com](https://finance.yahoo.com/news/netapp-faces-fiscal-2027-margin-161953372.html))

- 2026-05-29: Biggest Mover Friday: NetApp Stock Soars 30% as AI Demand Sparks Blowout Guidance ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/biggest-mover-friday-netapp-stock-183357417.html))

- 2026-08-31: NetApp Sees Strong Storage Demand With AI-Related Tailwinds, BofA Securities Says ([finance.yahoo.com](https://finance.yahoo.com/technology/articles/netapp-sees-strong-storage-demand-150235570.html))

- 2026-09-26: NetApp (NTAP) Acquires AI Storage Software Firm To Expand AI Infrastructure ([finance.yahoo.com](https://finance.yahoo.com/technology/ai/articles/netapp-ntap-acquires-ai-storage-220629407.html))

### Sales · FY2025–2026

sales +5.4%; source https://www.sec.gov/Archives/edgar/data/1002047/000119312526259683/ntap-20260424.htm; observed 2026-06-05.

- FY2017: $5.5B 

- FY2018: $5.9B 

- FY2019: $6.1B 

- FY2020: $5.4B 

- FY2021: $5.7B 

- FY2022: $6.3B 

- FY2023: $6.4B 

- FY2024: $6.3B 

- FY2025: $6.6B 

- FY2026: $6.9B 

### Gross margin · FY2026

gross margin 70.7%; source https://www.sec.gov/Archives/edgar/data/1002047/000119312526259683/ntap-20260424.htm; observed 2026-06-05.

- FY2017: 61.4% 

- FY2018: 62.6% 

- FY2019: 64.2% 

- FY2020: 66.9% 

- FY2021: 66.4% 

- FY2022: 66.8% 

- FY2023: 66.2% 

- FY2024: 70.7% 

- FY2025: 70.2% 

- FY2026: 70.7% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in software infrastructure; annual sales are USD 6.9 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1002047/000119312526259683/ntap-20260424.htm (filed 2026-06-05); FY2026: revenue 6925000000; grossProfit 4899000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); NTAP.US: NetApp, Inc. develops enterprise software, systems, and services to transform data infrastructures in the United States, Canada, Latin America, Europe, the Middle East, Africa, and the Asia Pacific. It operates through two segments, Hybrid Cloud and Public Cloud. The company offers data management software, such as NetApp ONTAP, ONTAP One, NetApp Snapshot, NetApp SnapCenter Backup Management, NetApp SnapMirror Data Replication, and NetApp SnapLock Data Compliance; and storage infrastructure solutions, including NetApp AFF and ASA A-Series and C-Series, NetApp AFX, NetApp Fabric Attached Storage (FAS), NetApp E/EF series, and NetApp StorageGRID. It also provides cloud storage services comprising Azure NetApp Files, Amazon FSx for NetApp ONTAP, and Google Cloud NetApp Volumes, as well as NetApp Cloud Volumes ONTAP. In addition, the company offers operational services, such as NetApp Data Infrastructure Insights and Instaclustr; and professional and support services include storage-as-a-service (STaaS), strategic consulting, professional, managed, and support services, as well as assessment, design, implementation, migration, and proactive support services to optimize the performance and efficiency of their on-premises and hybrid multicloud storage environments. Further, it offers ransomware protection, data backup and recovery, and disaster recovery. It serves various industries comprising energy, financial services, government, technology, internet, life sciences, healthcare services, manufacturing, media, entertainment, animation, video postproduction, and telecommunications through a direct sales force and an ecosystem of partners, including the cloud providers. The company has a strategic alliance with Commvault Systems, Inc. to develop an integrated solution for enterprise data protection and cyber resilience; and Super Micro Computer, Inc. to build integrated AI infrastructure solutions. NetApp, Inc. was incorporated in 1992 and is based in San Jose, California.

### Why customers stay

Margins ranged from 70.2% to 70.7% during 2024–26; it earns 25.8% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-05); FY2024: grossProfit / revenue = 70.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-05); FY2025: grossProfit / revenue = 70.2%.

- Source: https://www.sec.gov/Archives/edgar/data/1002047/000119312526259683/ntap-20260424.htm (filed 2026-06-05); FY2026: grossProfit / revenue = 70.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-05); 10-year return on capital observations [[2017,0.10381399143381603],[2018,0.18313298271975958],[2019,0.3904507659936252],[2020,0.39915656511478226],[2021,0.23243008537126184],[2022,0.2620576710636683],[2023,0.2831710709318498],[2024,0.24953834518063223],[2025,0.2530462198787081],[2026,0.3213493576638171]]; median 0.2575519454711882. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 67% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/1002047/000119312526259683/ntap-20260424.htm (filed 2026-06-05); Gross margin observations: [[2021,0.6641713091922006],[2022,0.6679328901551124],[2023,0.6615844074190507]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 950 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-05); FY2017: growth capex 0; upkeep 175000000; owner earnings 560000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-05); FY2018: growth capex 0; upkeep 145000000; owner earnings 129000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-05); FY2019: growth capex 0; upkeep 173000000; owner earnings 1193000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-05); FY2020: growth capex 0; upkeep 124000000; owner earnings 888000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-05); FY2021: growth capex 0; upkeep 162000000; owner earnings 775000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-05); FY2022: growth capex 32000000; upkeep 194000000; owner earnings 937000000. Growth capex / owner earnings = 0.03415154749199573.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-05); FY2023: growth capex 0; upkeep 239000000; owner earnings 1283000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-05); FY2024: growth capex 0; upkeep 155000000; owner earnings 1086000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-05); FY2025: growth capex 0; upkeep 168000000; owner earnings 1261000000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1002047/000119312526259683/ntap-20260424.htm (filed 2026-06-05); FY2026: growth capex 0; upkeep 198000000; owner earnings 1278000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-05); Dividend observations: [[2017,208000000],[2018,214000000],[2019,403000000],[2020,439000000],[2021,427000000],[2022,446000000],[2023,432000000],[2024,416000000],[2025,424000000],[2026,413000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1002047/000119312526259683/ntap-20260424.htm (filed 2026-06-05); FY2026: cash repurchases 950000000 USD.

### Are managers owners

Insiders own 0.3% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); NTAP.US SharesStats.PercentInsiders = 0.331 percentage points; cache date 2026-10-16.

### What could break it

"There are risks associated with our outstanding and future indebtedness." (SEC filing, Jun 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1002047/000119312526259683/ntap-20260424.htm (filed 2026-06-05); There are risks associated with our outstanding and future indebtedness.

### What the price says

The price assumes cash profits grow 11.5% yearly over ten years; actual growth was 18.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-05); Ten-year compound average after fade. Initial solved rate 0.15343566471808467. Price 214.7; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 1.1717171717171717 → FY2026 6.358208955223881. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $33.94 per share

- 2016-11: $36.56 per share

- 2016-12: $35.27 per share

- 2017-01: $38.32 per share

- 2017-02: $41.83 per share

- 2017-03: $41.85 per share

- 2017-04: $39.85 per share

- 2017-05: $40.49 per share

- 2017-06: $40.05 per share

- 2017-07: $43.42 per share

- 2017-08: $38.66 per share

- 2017-09: $43.76 per share

- 2017-10: $44.42 per share

- 2017-11: $56.51 per share

- 2017-12: $55.32 per share

- 2018-01: $61.50 per share

- 2018-02: $60.55 per share

- 2018-03: $61.69 per share

- 2018-04: $66.58 per share

- 2018-05: $68.32 per share

- 2018-06: $78.53 per share

- 2018-07: $77.52 per share

- 2018-08: $86.81 per share

- 2018-09: $85.89 per share

- 2018-10: $78.49 per share

- 2018-11: $66.87 per share

- 2018-12: $59.67 per share

- 2019-01: $63.77 per share

- 2019-02: $65.20 per share

- 2019-03: $69.34 per share

- 2019-04: $72.85 per share

- 2019-05: $59.20 per share

- 2019-06: $61.70 per share

- 2019-07: $58.49 per share

- 2019-08: $48.06 per share

- 2019-09: $52.51 per share

- 2019-10: $55.88 per share

- 2019-11: $60.59 per share

- 2019-12: $62.25 per share

- 2020-01: $53.40 per share

- 2020-02: $46.72 per share

- 2020-03: $41.69 per share

- 2020-04: $43.77 per share

- 2020-05: $44.54 per share

- 2020-06: $44.37 per share

- 2020-07: $44.30 per share

- 2020-08: $47.39 per share

- 2020-09: $43.84 per share

- 2020-10: $43.89 per share

- 2020-11: $53.31 per share

- 2020-12: $66.24 per share

- 2021-01: $66.44 per share

- 2021-02: $62.60 per share

- 2021-03: $72.67 per share

- 2021-04: $74.69 per share

- 2021-05: $77.37 per share

- 2021-06: $81.82 per share

- 2021-07: $79.59 per share

- 2021-08: $88.93 per share

- 2021-09: $89.76 per share

- 2021-10: $89.30 per share

- 2021-11: $88.88 per share

- 2021-12: $91.99 per share

- 2022-01: $86.51 per share

- 2022-02: $78.38 per share

- 2022-03: $83.00 per share

- 2022-04: $73.25 per share

- 2022-05: $71.95 per share

- 2022-06: $65.24 per share

- 2022-07: $71.33 per share

- 2022-08: $72.13 per share

- 2022-09: $61.85 per share

- 2022-10: $69.27 per share

- 2022-11: $67.61 per share

- 2022-12: $60.06 per share

- 2023-01: $66.23 per share

- 2023-02: $64.55 per share

- 2023-03: $63.85 per share

- 2023-04: $62.89 per share

- 2023-05: $66.35 per share

- 2023-06: $76.40 per share

- 2023-07: $78.01 per share

- 2023-08: $76.70 per share

- 2023-09: $75.88 per share

- 2023-10: $72.78 per share

- 2023-11: $91.39 per share

- 2023-12: $88.16 per share

- 2024-01: $87.20 per share

- 2024-02: $89.12 per share

- 2024-03: $104.97 per share

- 2024-04: $102.21 per share

- 2024-05: $120.43 per share

- 2024-06: $128.80 per share

- 2024-07: $126.98 per share

- 2024-08: $120.72 per share

- 2024-09: $123.51 per share

- 2024-10: $115.31 per share

- 2024-11: $122.64 per share

- 2024-12: $116.08 per share

- 2025-01: $122.10 per share

- 2025-02: $99.81 per share

- 2025-03: $87.84 per share

- 2025-04: $89.75 per share

- 2025-05: $99.16 per share

- 2025-06: $106.55 per share

- 2025-07: $104.13 per share

- 2025-08: $112.79 per share

- 2025-09: $118.46 per share

- 2025-10: $117.78 per share

- 2025-11: $111.56 per share

- 2025-12: $107.09 per share

- 2026-01: $96.35 per share

- 2026-02: $99.03 per share

- 2026-03: $102.39 per share

- 2026-04: $110.77 per share

- 2026-05: $174.29 per share

- 2026-06: $154.76 per share

- 2026-07: $178.50 per share

- 2026-08: $185.29 per share

- 2026-09: $210.08 per share

- 2026-10: $239.01 per share

## Annual estimated value (USD per share)

- FY2017: low $38.90 per share, central $41.91 per share, high $45.90 per share

- FY2018: low $42.86 per share, central $46.13 per share, high $50.49 per share

- FY2019: low $47.02 per share, central $60.50 per share, high $68.50 per share

- FY2020: low $37.67 per share, central $41.22 per share, high $45.95 per share

- FY2021: low $57.31 per share, central $62.48 per share, high $69.36 per share

- FY2022: low $62.22 per share, central $68.39 per share, high $76.60 per share

- FY2023: low $65.24 per share, central $72.39 per share, high $81.91 per share

- FY2024: low $67.45 per share, central $74.73 per share, high $84.42 per share

- FY2025: low $77.32 per share, central $85.53 per share, high $96.46 per share

- FY2026: low $86.64 per share, central $96.22 per share, high $108.98 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:36:25.651Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1002047/000119312526259683/ntap-20260424.htm); period 2026-04-24, filed 2026-06-05.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.