NetApp (NTAP) Down In After-Hours Trading

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified NetApp ( NTAP) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified NetApp as such a stock due to the following factors:

  • NTAP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $169.3 million.
  • NTAP is down 3.2% today from today's close.

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More details on NTAP:

NetApp, Inc. engages in design, manufacture, and marketing of networked storage solutions. The company supplies enterprise storage and data management software and hardware products and services. The stock currently has a dividend yield of 1.8%. NTAP has a PE ratio of 19.9. Currently there are 5 analysts that rate NetApp a buy, 3 analysts rate it a sell, and 17 rate it a hold.

The average volume for NetApp has been 5.0 million shares per day over the past 30 days. NetApp has a market cap of $11.4 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 1.81 and a short float of 2.8% with 1.88 days to cover. Shares are down 17.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates NetApp as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:
  • Although NTAP's debt-to-equity ratio of 0.25 is very low, it is currently higher than that of the industry average. To add to this, NTAP has a quick ratio of 2.33, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for NETAPP INC is rather high; currently it is at 67.45%. 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 11.93% significantly trails the industry average.
  • 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.
  • Net operating cash flow has declined marginally to $331.80 million or 9.12% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • NTAP has underperformed the S&P 500 Index, declining 9.39% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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