NEW YORK ( TheStreet) -- NetApp (Nasdaq: NTAP) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- The revenue growth significantly trails the industry average of 59.2%. Since the same quarter one year prior, revenues rose by 19.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Although NTAP's debt-to-equity ratio of 0.28 is very low, it is currently higher than that of the industry average. To add to this, NTAP has a quick ratio of 1.77, which demonstrates the ability of the company to cover short-term liquidity needs.
- NETAPP INC has improved earnings per share by 17.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NETAPP INC reported lower earnings of $1.57 versus $1.71 in the prior year. This year, the market expects an improvement in earnings ($2.05 versus $1.57).
- Net operating cash flow has increased to $582.60 million or 32.16% when compared to the same quarter last year. Despite an increase in cash flow of 32.16%, NETAPP INC is still growing at a significantly lower rate than the industry average of 126.18%.
- The gross profit margin for NETAPP INC is rather high; currently it is at 63.30%. Regardless of NTAP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NTAP's net profit margin of 10.60% is significantly lower than the same period one year prior.
--Written by a member of TheStreet Ratings Staff.TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.