Goldman Sachs reiterated its buy recommendation for NetApp after the data storage company posted adjusted earnings per share and revenue that exceeded market expectations in its first fiscal quarter.
The bank maintained a price target of $210 per share, citing strong execution across NetApp’s core storage and cloud businesses. Adjusted EPS reached $2.58, surpassing the consensus estimate of $2.11. Revenue totaled $2.03 billion, above the $1.83 billion forecast.
Gross margins reached 70.6%, at the upper end of the company’s guidance range of 69.1% to 70.7%, while EBIT margins stood at 31.9%, exceeding both Goldman Sachs and broader market estimates. NetApp’s shares trade at a P/E ratio of 28.4 with a market capitalization of $35.5 billion.
Year-on-year growth was led by hybrid cloud revenue, which rose 30%, and all-flash storage, which accelerated 47%. Public cloud revenue increased 28% on a reported basis and 19% excluding an extra reporting week, driven by direct sales and hyperscaler marketplace activity.
The company closed approximately 350 AI-related deals in the quarter, down from 500 in the prior period, though average contract values increased as clients progressed from proof-of-concept to production. A sale to an Asian neocloud provider was highlighted as a notable transaction.
For the full fiscal year 2027, NetApp raised its guidance. Total revenue is now expected between $7.975 billion and $8.225 billion, up from the prior range of $7.325 billion to $7.575 billion. Diluted EPS guidance was increased to between $9.73 and $10.03, from $8.70 to $9.00 previously. Non-GAAP EBIT margin guidance was adjusted to 30.3% to 31.3%, from 29.1% to 30.1%.
NetApp shares have gained 71% year-to-date and 58% over the past 12 months.
