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Why NetApp Stock Fell Over 4% on May 22

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Stock falls on earnings miss

Data storage company NetApp (NTAP) fell over 4% on May 22. NetApp reported revenue of $1.59 billion in the fourth quarter (year ended in April), a fall from $1.64 billion in the prior-year quarter. NetApp’s adjusted EPS fell 16% year-over-year to $1.22 in the fourth quarter.

Analysts estimated NetApp to post sales of $1.65 billion and EPS of $1.26 in the fourth quarter. NetApp also stated that in the next quarter, it estimates sales between $1.32 billion and $1.47 billion, which is around $1.39 billion at the midpoint. NetApp estimates EPS between $0.78 and $0.86 in the first quarter.

Wall Street on the other hand, estimates earnings per share of $1.04 and sales of $1.5 billion in the first quarter. NetApp reported sales of $1.47 billion with EPS of $1.05 in the first quarter, indicating it expects its top line and bottom line to decline in the current quarter.

The earnings miss and lukewarm guidance sent NetApp’s stock lower on May 22.

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Stock returns

NetApp stock has risen at an impressive rate over the last three years. The stock has gained at a compound annual growth rate of 39% in the last three years, easily outperforming the broader markets and storage peers.

However, the recent tech sell-off has meant NetApp stock is down by 7.9% this month. NetApp stock has still managed to gain 13.8% since the start of 2019.

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