Shares of NetApp
How it got here
The data storage specialist got clobbered when it reported second-quarter earnings in November. Revenue fell short of what the market was expecting, and then-CFO Steven Gomo said the miss was attributed to slow ordering activity at just a fraction of its biggest customers.
The next quarter came in ahead of what the Street was looking for, sending shares upward in the process. Revenue jumped by 21.4% to $1.6 billion, outpacing larger rival EMC's
That was back in February, and April saw a handful of brutal tech earnings reports from several IT-centric names that didn't do the sector any favors. Then earlier this month Cisco Systems CEO John Chambers again came out with gloomy words, further sparking fears of a slowdown in technology spending.
How it stacks up
Let's see how NetApp stacks up with some of its data storage peers.
We'll add some fundamental metrics into the mix for a deeper read.
|
Company |
P/E (TTM) |
Sales Growth (MRQ) |
Net Margin (TTM) |
ROE (TTM) |
|---|---|---|---|---|
| NetApp | 22.3 | 21.4% | 9.8% | 15.5% |
| EMC | 22.3 | 10.6% | 13.3% | 13.7% |
|
Hewlett-Packard |
7.7 | (7.0%) | 4.8% | 14.8% |
|
IBM |
14.7 | 0.3% | 15.0% | 74.0% |
Source: Reuters. TTM = trailing 12 months. MRQ = most recent quarter.
NetApp is putting up faster sales growth than its closest competitor, EMC, and both sport about the same valuation relative to earnings. EMC is more profitable, but remember that some of those results are tied to its majority-owned virtualization subsidiary VMware. HP and IBM also play in this sector, but both of those companies offer much more beyond just data storage.
What's next?
The data storage industry is set to continue growing, as our data needs skyrocket. Big data ain't going anywhere anytime soon, and NetApp should enjoy the ride. The company is also set to report earnings tomorrow, so hopefully the results can turn the ship around.
Add these storage companies to your watchlist to get the latest updates on the sector.
- Add NetApp to My Watchlist.
- Add International Business Machines to My Watchlist.
- Add Hewlett-Packard to My Watchlist.
- Add EMC to My Watchlist.
