NetApp's stock price fell 3.86% to $60 after Citigroup analyst Jim Suva rolled back his rating on the company's shares to sell from neutral, while also cutting the price target to $55 from $67.
In explaining his decision to downgrade NetApp's stock, Suva cited increased competition from other enterprise storage vendors. NetApp is battling for market share with Hewlett Packard Enterprise HPE, Pure Storage (PSTG - Get Report) , Dell Technologies (DELL) and Nutanix (NTNX - Get Report) .
NetApp's stock price has underperformed the market in recent weeks. With earnings per share of $1.22, the company missed fourth-quarter analysts' earnings estimates by 3 cents, according to Zacks.
While NetApp's first-quarter numbers should meet Wall Street expectations, Suva sees ramped up competition eroding the tech company's margins by the second quarter.
NetApp controlled 6.7% of the enterprise storage systems market at the end of the first quarter, according to Zacks, which cited stats collected by IDC. That represented a gain of 0.5% for the company which is behind only Dell and HPE in this crucial market segment.
NetApp is also three notches above Pure Storage, which came in No. 6 in terms of market share, with 2.2%.