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NetApp Stock Continued to Fall on May 23

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May. 24 2019, Published 9:31 a.m. ET

Stock fell 8.1% yesterday

Data storage company NetApp (NTAP) fell 8.1% on May 23 to close trading at $61.66. NetApp stock fell over 4% on May 22 as well after the company reported an earnings miss in the fourth quarter (year ended in April). The company also provided first-quarter guidance that was lower than Wall Street estimates.

In the fourth quarter, NetApp reported revenue of $1.59 billion with adjusted EPS of $1.22. Analysts estimated sales of $1.65 billion and earnings of $1.26 from NetApp. In the prior year quarter, NetApp reported sales of $1.64 billion and EPS of $1.05.

In the first quarter of fiscal 2020, NetApp expects sales between $1.32 billion and $1.47 billion with EPS between $0.78 and $0.86. This amounts to revenue of $1.39 billion and earnings of $0.82 at the midpoint. In comparison, analysts expect sales of $1.5 billion and EPS of $1.05 from NetApp.

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The stock has now fallen over 15% in May 2019

Driven by NetApp’s recent pullback, the stock has now fallen 15.4% this month. NetApp stock though is still up 4.6% since the start of 2019. NetApp stock is currently trading 13.1% above its 52-week low and 30.0% below its 52-week high.

Storage peers Seagate (STX), Western Digital (WDC), and Pure Storage (PSTG) have declined by 9.5%, 19.0%, and 31%, respectively, this month.

PE multiple

NetApp stock is trading at a forward PE multiple of 12.3x. In comparison, its EPS are expected to rise around 17% on an annual basis in the next five years. NetApp also has a dividend yield of 3.1%. It seems like the stock is a solid pick at current prices.

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