NetApp (NASDAQ:NTAP) is a $12 billion company today. Investors that bought shares one year ago are sitting on a 50.65% total return. That's above the S&P 500's return of 14.02%.
NetApp stock is beating the market, and it reports earnings next week. But does that make it a good buy today? To answer this question, we've turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics...
✓ Earnings-per-Share (EPS) Growth: NetApp reported a recent EPS growth rate of 133.86%. That's above the technology hardware industry average of 74.85%. That's a great sign. NetApp's earnings growth is outpacing that of its competitors.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the technology hardware industry is 34.57. And NetApp's ratio comes in at 21.43. It's trading at a better value than many of its competitors.
✓ Debt-to-Equity : The debt-to-equity ratio for NetApp stock is 71.69. That's below the technology hardware industry average of 73.57. The company is less leveraged.
✓ Free Cash Flow per Share Growth : NetApp's FCF has been higher than that of its competitors over the last year. That's good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It's one of our most important fundamental factors.
✓ Profit Margins : The profit margin of NetApp comes in at 12.83% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. NetApp's profit margin is above the technology hardware average of 10.17%. So that's a positive indicator for investors.
✓ Return on Equity : Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for NetApp is 17.98%, and that's above its industry average ROE of 8.09%.
NetApp stock passes six of our six key metrics today. That's why our Investment U Stock Grader rates it as a Strong Buy.