Though the company's management lowered revenue estimates by 8% and dropped EPS by almost 40%, astute investors should be able to understand the implication of the guidance -- regardless of degree. For that matter, the company is ending one fiscal calendar and entering the next, so there is a chance that it is indeed under-promising to over-deliver. I suspect that is the case, but it is going to take some time to unfold. One can also continue to look into EMC's guidance for clues. However, in the meantime, it would seem that investors continue to abandon ship. What does it mean for the long-term implications of the stock? And how low will it go before a name such as Cisco or Oracle ( ORCL) two enterprise titans with goals of cloud domination make a play for NetApp and what is still a great business? What is clear to me is that the company's declining stock price is not only oversold, but grossly unjustified. The fact of the matter is its recent decline is disproportionate to its performance. For this reason, I think investors' loss might eventually be Cisco's or Oracle's gain. Bottom Line As the cloud starts to form and businesses begin to fully embrace the benefits offered through a migration, both Oracle and Cisco will want to further their one-stop-shop strategies and realize that data storage will be a critical component within their portfolio of services -- particularly for Oracle which already specializes in data analytics. So from the standpoint of synergy, it makes sense to acquire a company that specializes in data storage -- one that has not only been growing its market share, but has done so by consistently by making data an area of focus and establishing an approach to storage architecture that appeals to a broad range of customers. So while EMC and to some extent names such as F5 ( FFIV) and Juniper ( JNPR) continue to receive the lion's share of analysts' coverage, investors would be wise to also start paying attention to what is going on at NetApp. Though the stock may now appear as a disappointment, nothing on Wall Street generates more excitement than M&A.
As with anything, it requires being at the right place and at the right time. For all of the reasons stated above, holding and or buying NetApp remains a decent bet.