Editor's Note: 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. 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 increase in net income, revenue growth, good cash flow from operations, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Computers & Peripherals industry. The net income increased by 32.2% when compared to the same quarter one year prior, rising from $119.60 million to $158.10 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.4%. Since the same quarter one year prior, revenues slightly increased by 4.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Net operating cash flow has increased to $365.10 million or 35.62% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.04%.
- The gross profit margin for NETAPP INC is rather high; currently it is at 64.50%. 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 9.69% significantly trails the industry average.
- NETAPP INC has improved earnings per share by 34.4% 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 ($2.28 versus $1.57).
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