NetApp (NTAP) Strong Momentum Stock: Why It's a Smart Investment

NetApp (NTAP) is a strong momentum stock with a Zacks Rank of #1, indicating a high probability of beating the market. The Zacks Style Scores, developed by Zacks Premium, evaluate stocks based on value, growth, and momentum characteristics. NetApp scores well in these categories, making it a good investment choice. The article highlights the importance of the Style Scores in identifying attractive stocks and building a winning portfolio.

NetApp Inc. (NTAP) is set to release its quarterly earnings report on August 27, 2025, following the closing bell. Analysts anticipate the company to report an earnings per share (EPS) of $1.40. NetApp bulls are hoping for an earnings beat, accompanied by positive guidance for the next quarter. This is crucial as historical data shows that the stock price often responds more to guidance than to actual earnings [1].

Historically, NetApp has shown mixed performance. The company has beaten EPS estimates in three out of the last four quarters, with an average earnings surprise of 3.2%. However, the stock price has not always followed suit. For instance, after beating EPS in the last quarter, the stock price dropped by 0.05% the next day [1].

Market performance has been challenging for NetApp. As of August 25, 2025, shares were trading at $111.01, down 16.08% over the last 52 weeks. This negative return has likely made long-term shareholders bearish ahead of the earnings release [1].

Analysts' consensus rating for NetApp is Neutral, with an average one-year price target of $115.0, suggesting a potential 3.59% upside. Comparing this with peers like Pure Storage, Super Micro Computer, and Western Digital, analysts favor a Buy trajectory for Pure Storage and an Outperform trajectory for Western Digital, indicating more optimistic views on these companies [1].

NetApp ranks in the middle for revenue growth among its peers but has the highest gross profit margin. Its return on equity is higher than two peers and lower than one, positioning it well compared to competitors [1].

Key drivers for NetApp’s Q1 earnings include increasing momentum across the all-flash portfolio, growth in first-party and marketplace cloud storage services, and advancements in enterprise AI. The company expects these trends to lead to record performance in fiscal 2026 and beyond [2].

However, the global macroeconomic environment remains uncertain, with slowing growth, persistent inflation pressures, and elevated volatility. This could weigh on NetApp’s outlook, particularly in the U.S. Public Sector and EMEA [2].

Zacks Premium’s Style Scores highlight NetApp’s strong value, growth, and momentum characteristics, making it an attractive investment choice. The Zacks Rank of #1 indicates a high probability of beating the market, further supporting its investment potential.

References:
[1] https://www.benzinga.com/insights/earnings/25/08/47332730/whats-next-netapps-earnings-preview
[2] https://www.nasdaq.com/articles/netapp-set-report-q1-earnings-key-performance-drivers-watch