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What to Expect Ahead of NetApp's (NTAP) Q1 Earnings Release?

NetApp NTAP is slated to release first-quarter fiscal 2023 earnings on Aug 24.

The company projects the fiscal first-quarter non-GAAP earnings to be between $1.05 and $1.15 per share. The Zacks Consensus Estimate is pegged at $1.10 per share, suggesting an decline of 4.4% from the year-ago quarter’s reported figure.

The company expects net revenues in the range of $1.475-$1.625 billion. The Zacks Consensus Estimate is pegged at $1.55 billion, suggesting growth of 6.4% year over year.

The company beat estimates in all of the last four quarters. It has a trailing four-quarter earnings surprise of 12.6%, on average.

NetApp, Inc. Price and EPS Surprise

 

NetApp, Inc. Price and EPS Surprise
NetApp, Inc. Price and EPS Surprise

NetApp, Inc. price-eps-surprise | NetApp, Inc. Quote

 

Factors to Note

NetApp’s strengthening go-to-market activities, various cloud collaborations and continued product innovation amid a robust demand environment are likely to have acted as tailwinds. NetApp specializes in providing cloud services, systems and software to business organizations to aid them in optimally operating their applications from the data center to cloud. The continuation of work from home and hybrid work innovation are other driving factors.

Strength in the company’s object storage and all-flash business is expected to have contributed to the Hybrid Cloud segment’s revenues in the to-be-reported quarter. Software product revenues are likely to have gained from the favorable mix shift to the all-flash portfolio.

For the fiscal first quarter, the Zacks Consensus Estimate for the Hybrid Cloud segment’s revenues is pegged at $1.41 billion.

Growing clout of Spot by NetApp portfolio might have aided the Public Cloud services business along with strong demand for other cloud solutions like Azure NetApp files, Cloud Volumes and Cloud Insights services. Spot by NetApp facilitates enterprises to make multi-cloud management easier and lower expenses at the same time.  Incremental gains from an uptick in the company’s NetApp Astra solution and NetApp ONTAP data management software might have favored the top line.

In the last reported quarter, Public Cloud Services recorded annualized recurring revenues (ARR) of $505 million, up 68% year over year.

For the fiscal first quarter, the Zacks Consensus Estimate for the Public Service segment’s revenues is at $135 million.

Synergies from the buyouts of CloudCheckr and Data Mechanics is likely to have acted as tailwinds. NetApp’s recent buyouts include Fylamynt and Instaclustr.  

However, pandemic-induced supply chain headwinds and substantial increases in freight and logistical and component costs are likely to act as headwinds.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

NetApp has an Earnings ESP of -1.98% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks that you may consider as our model shows that these have the right combination of elements to beat on earnings this season.

Dollar Tree DLTR has an Earnings ESP of +1.75% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar Tree is set to release second-quarter 2022 results on Aug 25. The Zacks Consensus Estimate for earnings is pegged at $8.16 per share, suggesting an increase of 40.6% from the prior-year quarter’s reported figure. Shares of Dollar Tree have increased 62% in the past year.

Dollar General DG has an Earnings ESP of +1.04% and a Zacks Rank of 2 at present.

Dollar General is set to release second-quarter 2022 results on Aug 25. The Zacks Consensus Estimate for earnings is pegged at $11.55 per share, suggesting an increase of 13.6% from the prior-year quarter’s levels. Shares of DG have increased 8.2% in the past year.

Ulta Beauty ULTA has an Earnings ESP of +4.07% and a Zacks Rank of 2.

Ulta Beauty is scheduled to release second-quarter fiscal 2022 results on Aug 25. The Zacks Consensus Estimate for earnings is pegged at $20.17 per share, revised up 0.5% in the past 60 days. Shares of ULTA have increased 8.9% in the past year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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