NetApp, Inc. NTAP
NetApp's Q1 FY2027 (ended 2026-07-31) results show a dramatic inflection — revenue grew ~30% YoY to $2.03B and actual EPS of $2.58 beat estimates by 21.7%, building on FY2026's operating margin expansion to 24.5% and FCF margin of 27.0%. Yet the stock trades at 25.2x earnings and 4.8x sales — 14% and 66% above peer medians respectively — with persistent insider selling (net -$54.7M over 24 months through August 2026), a smart money score that turned slightly negative at -0.0166 as of Q2 2026, and a brokerage average price target of $179.77 below the current $183.16.
The revenue acceleration is genuine but already partially reflected in the premium valuation; sustained double-digit growth across additional quarters is needed to justify accumulating at these levels.
What could go wrong
- Valuation de-rating. P/E of 25.2x and P/S of 4.8x sit 14% and 66% above peer medians; any growth deceleration could trigger a sharp multiple compression.
- Persistent insider selling. Net insider disposition of $54.7M over 24 months with continued sales by the President and EVPs in August 2026 signals limited insider conviction at current prices.
- Smart money outflows. Smart money score turned negative to -0.0166 as of Q2 2026 after being consistently positive through 2025, suggesting institutional positioning is softening.
- AI demand sustainability. The ~30% Q1 FY2027 revenue surge is partly attributed to AI-driven flash and cloud demand; if hyperscaler spending pauses, growth could revert to the low-single-digit rates seen in earlier FY2026 quarters.
What would change my mind
Where this comes from: quarterly_results (fiscal_year 2027 Q1, period_end 2026-07-31) · earnings_surprises (period_end 2026-09-02) · derived_metrics (fiscal_year 2026) · peer_relative. Orin's read on NTAP; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All NTAP filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $2.0B | 0.0% of fund |
| Vanguard Portfolio Management | $1.9B | 0.1% of fund |
| State Street | $1.5B | 0.0% of fund |
| Geode Capital Management | $986.5M | 0.1% of fund |
| Ameriprise Financial | $723.9M | 0.1% of fund |
| Norges Bank | $645.5M | 0.1% of fund |
80 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 294 Form 4 filings, net −$67.7M. Of the 50 on hand, 0 were open-market purchases and 14 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about NTAP
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Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 27.3× | 16.8× | 53.3× |
| EV/EBITDA | 18.4× | 11.1× | — |
| P/S | 5.21× | 2.79× | — |
| P/B | 25.7× | 17.6× | — |
Its P/E sits above all 5 of the last 5 years (+3.17σ from its own mean).
8.1%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $1.9B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$197
$170 – $225 · +0% against today's price
- 26 buy or overweight
- 37 hold
- 8 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| NTAPNetApp, Inc. | $39B | 27.3× | 18.4× | 70.6% | 19.2% | 114% |
| FLEXFlex Ltd. | $41B | 43.4× | 23.4× | 9.5% | 3.3% | 19% |
| HPQHP Inc. | $29B | 12.1× | 9.5× | 19.8% | 4.1% | -727% |
| JBLJabil Inc. | $32B | 38.1× | 16.4× | 9.2% | 2.6% | 62% |
| LDOSLeidos Holdings, Inc. | $16B | 11.5× | 9.4× | 17.4% | 7.9% | 28% |
| PTCPTC Inc. | $16B | 13.5× | 10.4× | 84.1% | 41.4% | 33% |
| RGTIRigetti Computing, Inc. | $5B | — | — | -2.7% | -1787.4% | -47% |
| TDYTeledyne Technologies Incorporated | $29B | 29.9× | 19.2× | 39.0% | 15.3% | 9% |
| VRSNVeriSign, Inc. | $27B | 31.8× | 23.3× | 88.5% | 49.8% | -39% |
The median is of the 7 peers listed above and nothing else — check it against the column. This company trades 8.6% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $82 | $161.46 · −49% | 2026-06-10 |
| Levered DCF | $91 | $161.46 · −43% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.