NetApp Gears Up to Post Q4 Earnings: What's in the Offing?

NetApp, Inc. NTAP is slated to release fourth-quarter fiscal 2025 earnings on May 29, after the closing bell.The company expects non-GAAP earnings per share to be between $1.84 and $1.94 for the quarter. The Zacks Consensus Estimate is pegged at $1.89 per share, indicating a 5% rise from the year-ago level.Net revenues are anticipated to be between $1.65 billion and $1.8 billion. The Zacks Consensus Estimate is pegged at $1.73 billion, implying a 3.4% increase from the prior-year level.NTAP beat estimates in two of the trailing four quarters, while matching the remaining times, delivering an average earnings surprise of 2.8%. The stock has lost 19.9% compared with the Computer Storage Devices decline of 10.6% in the past six months. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)Image Source: Zacks Investment ResearchFactors at PlayHealthy demand momentum for NetApp’s portfolio of modern all-flash arrays, especially the C-series capacity flash and ASA block-optimized flash, is likely to have aided its top line in the fiscal fourth quarter. The new all-flash A-series is gaining traction. These enterprise storage solutions help accelerate workloads like traditional business apps and Gen AI. At the start of the fiscal fourth quarter, NetApp launched new entry-level and midrange ASA systems to complement its high-end line. These systems, powered by ONTAP, help customers scale easily, cut storage costs with data tiering and ensure simple, consistent operations and data protection. It expects the AFF A-series, along with its C-series and ASA lines, to increase penetration in the all-flash market. In addition, Keystone’s storage-as-a-service offering has been strengthening, with revenues increasing nearly 60% year over year in the last reported quarter.Our estimate for Hybrid Cloud’s fiscal fourth-quarter revenues is pegged at $1.5 billion, indicating a rise of 2.2% from the year-ago level. Effective cost-cutting measurements and strategic pricing during the quarter are likely to have acted as key catalysts. NetApp, Inc. Price and EPS Surprise NetApp, Inc. price-eps-surprise | NetApp, Inc. QuoteSteady growth in hyperscaler first-party and marketplace storage services has been fueling NetApp's Public Cloud revenues. In the last reported quarter, the Public Cloud segment’s revenues improved 15% to $174 million, driven by a 40% increase in first-party and marketplace cloud storage services. Driven by strength in the cloud storage business, NetApp expects cloud revenues to post healthy growth year over year in the fiscal fourth quarter. However, the Spot divestiture completed in March is likely to reduce cloud revenues by about $15 million, with minimal effect on the bottom line. Our estimate for Public Cloud revenues is pegged at $175.6 million, up 15.6% from the prior-year actual.Nonetheless, NetApp has revised its fiscal fourth-quarter outlook due to the Spot divestiture, a strong U.S. dollar hurting both top and bottom line, and fiscal third-quarter performance. This quarter is expected to have been back on track, though global Public sector weakness may have weighed on performance.Uncertain global macroeconomic conditions, a cautious IT spending environment and cloud cost optimization efforts by clients are likely to have posed additional woes.What Our Model Says About NTAPOur proven model does not predict an earnings beat for NTAP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. This is not the case here.NTAP has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell) at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Stocks With the Favorable CombinationPer our model, Dell Technologies DELL, Nutanix NTNX and Salesforce CRM have the right combination of elements to post an earnings beat in their upcoming releases.Dell Technologies is set to report first-quarter fiscal 2026 results on May 29. It has an Earnings ESP of +1.46% and carries a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Dell Technologies’ first-quarter earnings has been revised upward by 3 cents to $1.71 per share, indicating a year-over-year increase of 34.7%. DELL shares have tanked 30.1% over the past year.Nutanix is set to report third-quarter fiscal 2025 results on May 28. It has an Earnings ESP of +5.26% and carries a Zacks Rank #3 at present.The Zacks Consensus Estimate for Nutanix’s third-quarter earnings is pegged at 38 cents per share, indicating an increase of 35.7% from the year-ago quarter’s reported figure. Shares of NTNX have gained 9.6% over the past year.Salesforce is scheduled to report first-quarter fiscal 2026 on May 28. It has an Earnings ESP of +0.76% and a Zacks Rank #3 at present.The Zacks Consensus Estimate for Salesforce’s first-quarter earnings per share is pegged at $2.54, indicating a year-over-year increase of 4.1%. Shares of CRM have risen 4% over the past year.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.0% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Salesforce Inc. (CRM): Free Stock Analysis Report Dell Technologies Inc. (DELL): Free Stock Analysis Report NetApp, Inc. (NTAP): Free Stock Analysis Report Nutanix (NTNX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks