NetApp (NASDAQ:NTAP) share soared more than 11% in early Wednesday trade after the company reported results for its second fiscal quarter.
EPS of $1.58 came in better than the consensus estimate of $1.39. Revenue fell 6% year-over-year (down 8% in constant currency) to $1.56 billion, beating the consensus estimate of $1.53B. Billings declined 9% year-over-year to $1.45B.
“We delivered another strong quarter, with revenue above the midpoint of our guidance and all-time highs for gross margins, operating margins, and EPS,” said CEO George Kurian.
For Q3/24, the company expects EPS in the range of $1.64-$1.74, compared to the consensus of $1.53, and revenue in the range of $1.51-$1.67B, compared to the consensus of $1.555B.
For the full year, the company now sees EPS at $6.05-$6.25, better than the consensus estimate of $5.73, and revenues to be down approximately 2% year-over-year.
Analysts at BofA hiked the price target by $10 to $73 per share as the company keeps executing well "in a tough environment."
Still, they reiterated an Underperform rating "as we see risk to estimates driven by weak macro, potentially weaker product growth, competitive price pressure and any share loss in All Flash Arrays (AFA)."
On the other hand, analysts at Northland Capital Markets downgraded NetApp's rating from Outperform to Market Perform with a price target of $100.00.
"We project continued EPS growth into FY24. However, justification for moving back to a DCF valuation framework falls short, leading to a 12-month $100 PT and downgrade," the analysts wrote.
Additional reporting by Senad Karaahmetovic