Is it safe to buy NetApp stock after guiding Q3 results in line with expectations?
- NetApp shares edged slightly higher on Thursday after declaring a quarterly dividend of $0.50 per share.
- The company announced better than expected FQ2 results Tuesday after markets closed.
- It also issued FQ3 revenue and earnings guidance in line with expectations.
On Wednesday, NetApp Inc. (NASDAQ:NTAP) shares edged slightly higher after announcing its most recent quarterly results. The company reported its FQ2 revenue and earnings Tuesday after markets closed, beating analyst expectations. NetApp also issued its FQ3 revenue and earnings guidance in line with Street forecasts.
The company posted FQ2 non-GAAP earnings per share of $1.28, beating the expectations of $1.21. In addition, its GAAP EPS of $0.98 was higher than the average for analyst estimates of $0.95, while revenue for the quarter increased by 10.6% from the same quarter a year ago to $1.57 billion, $20 million ahead of estimates.
Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.
NetApp issued FQ3 revenue guidance in the range of $1.525 to $1.675, compared to the consensus estimate of $1.59 billion. Its FQ3 EPS forecast of $1.21-$1.31 is also relatively in line with the expectation of $1.29.
Is NetApp a good buy?
From an investment perspective, NetApp shares trade at reasonable trailing 12-month and forward P/E ratios of 23.83 and 16.30, respectively. Therefore, it could be an interesting option for value investors.
On the other hand, its earnings growth forecast of 9.50% next year and the annual average of 8.80% for the next five years could attract growth investors.
Technically, NetApp shares seem to be trading within a gently descending channel formation in the intraday chart. However, the stock recently pulled back after finding the trendline resistance, creating another opportunity to buy.
Therefore, investors could target more upward profits at about $91.81, or higher at 494.27, while $87.21 and $84.54 are crucial support levels.
Where to buy right now
To invest simply and easily, users need a low-fee broker with a track record of reliability. The following brokers are highly rated, recognised worldwide, and safe to use: