NEW YORK (TheStreet) -- Shares of NetApp, Inc. (NTAP) - Get Report are higher by 0.36% to $40.69 in after-hours trading following its announcement that it acquired Riverbed Technology's (RVBD) SteelStore product line in an all-cash transaction for about $80 million.
The addition of the SteelStore cloud-integrated storage product line willl give enterprises with the ability to back up business data to whichever cloud option they choose.
"This product, coupled with our broad ecosystem of application and cloud service providers, will give enterprises a heterogeneous backup solution to leverage the flexibility and economics of the cloud for their backup and recovery needs," said NetApp chief strategy officer Jonathan Kissane in a statement.
Separately, TheStreet Ratings team rates NETAPP INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate NETAPP INC (NTAP) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, expanding profit margins, increase in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- NETAPP INC has improved earnings per share by 17.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, NETAPP INC increased its bottom line by earning $1.85 versus $1.37 in the prior year. This year, the market expects an improvement in earnings ($3.00 versus $1.85).
- The gross profit margin for NETAPP INC is rather high; currently it is at 68.20%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, NTAP's net profit margin of 5.93% significantly trails the industry average.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Computers & Peripherals industry average. The net income increased by 8.3% when compared to the same quarter one year prior, going from $81.60 million to $88.40 million.
- Despite currently having a low debt-to-equity ratio of 0.39, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.56 is very high and demonstrates very strong liquidity.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Computers & Peripherals industry and the overall market on the basis of return on equity, NETAPP INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: NTAP Ratings Report