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NetApp (NTAP) to Strengthen Spot Portfolio on Fylamynt Buyout

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NetApp NTAP recently announced the acquisition of Fylamynt for an undisclosed amount. Per the deal, Fylamynt is slated to become part of NetApp’s Spot portfolio of products to automate its cloud operations infrastructure.

Fylamynt specializes in providing CloudOps automation technology that allows clients to create, deploy and manage workflows across any cloud environment with minimal coding requirements.

Organizations transiting to cloud-based platforms face a number of hurdles. They need to code their infrastructures and manage their operations at high speed. Further, applications must be rightly integrated with the services and workflows across their cloud environments. With the number of services and workflows increasing rapidly, developing and maintaining these integrations and automation speedily has become expensive, complicated and time-consuming and needs site reliability engineering (SRE) resources.

Fylamynt addresses these obstacles with its innovative low code framework and cloud automation engine, enabling DevOps and SREs to cost-effectively build and maintain their cloud operations.

Acquisition Benefits

The latest strategic acquisition revs up NetApp’s overall CloudOps leadership and empowers customers to continue to take benefit of more cloud at a reduced cost. The integration of Fylamynt’s suite of cloud automation technologies with Spot by NetApp will allow organizations to rapidly deploy Spot by NetApp services within their existing cloud environments. The amalgamation of Fylamynt’s pre-built integrations with Spot’s full CloudOps portfolio will help customers accelerate, optimize and automate every part of the cloud operations workflow.

The acquisition of Fylamynt helps NetApp’s Spot portfolio of leading CloudOps multi-cloud infrastructure management services to gain momentum. In June 2020, NetApp acquired Spot, which develops technology to manage and optimize compute instances on public clouds. This marked NetApp’s first step to becoming a provider of a wide range of public cloud services distinct from the company’s traditional focus on storage. Spot’s compute platform provides customers with solutions that help optimize workloads while maintaining both service-level objective (SLO) and service-level agreement (SLA).

Since then, NetApp has bolstered the Spot portfolio to include CloudHawk for security and compliance, Data Mechanics for data analytics and machine learning workloads in the cloud, and CloudCheckr for cloud cost management. The buyout of Fylamynt marks the latest effort by NetApp in the last two years to boost its Spot portfolio, as the company aims to develop a $1-billion annual recurring revenue cloud business by 2025.

NTAP- A Leading Storage Devices Stock

Apart from its robust acquisition strategy, NetApp’s performance is gaining from continued strength in the Hybrid Cloud and Public Cloud segments as well as strong billings growth.

The company is also gaining from the increasing clout of cloud-integrated all-flash solutions; File, Block and Object Software products; and hybrid multi-cloud offerings. The rapid adoption of Microsoft Azure NetApp Files is a major catalyst driving the company’s Public Cloud Services. However, higher expenditures on product development amid intense competition from fellow storage peers is a concern.

NetApp recently reported stellar third-quarter fiscal 2022 results, wherein non-GAAP earnings came in at $1.44 per share, surpassing the Zacks Consensus Estimate by 12.5% and increasing 30.9% year over year. Revenues of $1.614 billion increased 10% year over year, outpacing the Zacks Consensus Estimate by 0.1%. The upside can be attributed to strong demand across the Hybrid Cloud and Public Cloud divisions.

NetApp currently has a Zacks Rank #2 (Buy). Shares of NTAP have gained 29.6% against the industry’s fall of 0.3% in the past year.

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Zacks Investment Research


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Other Key Picks

Other top-ranked stocks from the broader technology space include Progress Software PRGS, Badger Meter BMI and Cadence Design Systems CDNS. While Progress Software and Badger Meter sport a Zacks Rank #1 (Strong Buy), Cadence carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Progress Software has a projected earnings growth rate of 3.62% for fiscal 2022. The Zacks Consensus Estimate for Progress Software’s fiscal 2022 earnings has been revised upward by 6 cents in the past 60 days. The long-term earnings growth rate of the company is pegged at 2%.

Progress Software’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 26.8%. Shares of PRGS have lost 0.9% in the past year.

Badger Meter has a projected earnings growth rate of 5.77% for 2022. The Zacks Consensus Estimate for Badger Meter’s 2022 earnings has been revised upward by 19 cents in the past 60 days.

Badger Meter’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and met estimates once, the average surprise being 14%. Shares of BMI have dropped 6.8% in the past year.

Cadence has a projected earnings growth rate of 7.9% for 2022. The Zacks Consensus Estimate for Cadence’s 2022 earnings has been unchanged in the past 90 days. The long-term earnings growth rate of the company is pegged at 18.2%.

Cadence’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 9.66%. Shares of CDNS have rallied 8% in the past year.


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