NetApp, Inc (NASDAQ:NTAP) clocked 9% revenue growth in Q1 to $1.59 billion, beating the consensus. Non-GAAP EPS of $1.20 topped the consensus. The Q2 outlook was in-line with the guidance.
Raymond James analyst Simon Leopold maintained an Outperform and $105 price target (up from $94) on NetApp following the Q1 beat and raise report.
Public cloud ARR came in above expectations, with a slightly higher outlook when excluding FX impacts, and this should alleviate investor concerns, Leopold mentioned in his Thursday note.
Further, gross margin should improve in 2H as memory pricing improves and premiums for specific constrained components come down, the analyst added.
Barclays analyst Tim Long maintained an Overweight and raised the price target from $88 to $95. The Q1 results showed positive momentum led by better Public Cloud ARR and a more robust operating margin.
Citi analyst Jim Suva reiterated a Buy and price target of $120. The results supported his optimistic view.
Suva continues to see NetApp gaining share and, importantly, as Cloud is 8-10% of the company’s sales and growing its mix about 1% each quarter, and this is margin-accretive he sees lasting for several years.
The analyst expects NetApp to continue to benefit from the growth of cloud storage and the multi-cloud optionality that many customers desire.
Wells Fargo reiterated a Hold with a price target of $85. NetApp delivered Q1 results better than his expectations, driven by continued broad-based demand strength, despite ongoing supply challenges and FX headwinds.
The company reiterated FY guidance, reflecting an embedded upward revision offset by more significant than initially expected FX headwinds.
NetApp continues to see healthy customer engagement and demand trends driven by priority investments in digital and Cloud transformation, the analyst wrote.
Given the uncertain macro environment and increasing FX headwinds, he continues to be cautious and is now modeling NetApp’s FY revenue growth slightly below the low end of the company’s guide.
Price Action: NTAP shares traded higher by 6.62% at $77.64 on the last check Thursday.