William Blair analyst Jason Ader has maintained their neutral stance on NTAP stock, giving a Hold rating on February 20.
Jason Ader has given his Hold rating due to a combination of factors impacting NetApp’s financial performance. The company’s fiscal third-quarter results fell short of expectations, with revenue coming in below forecasts and a slight decline in non-GAAP EPS. This shortfall was attributed to challenges in sales execution and unfavorable foreign exchange conditions. Despite these setbacks, public cloud sales showed robust growth, and the operating margin exceeded expectations due to disciplined management.
Looking ahead, the guidance for the fourth quarter also came in below consensus, with anticipated revenue and earnings growth not meeting market expectations. Contributing to this cautious outlook are ongoing foreign exchange pressures and a strategic divestiture impacting revenue. Additionally, concerns about global public sector spending, particularly in Europe, have added to the uncertainty. While there are positive signs, such as the growth in the Keystone storage-as-a-service offering, these are balanced by the near-term challenges, leading to the Hold rating.
In another report released on February 20, Citi also maintained a Hold rating on the stock with a $135.00 price target.