NetApp Inc.: Price Target Increased to $37 Following Insight Conference 2016 – Baird

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NetApp reiterated as Outperform by Baird

Analyst Jayson Noland at Baird maintained his Outperform rating for the stock of NetApp Inc. (NASDAQ:NTAP) following company’s Insight conference in 2016. The company’s Chief Executive Officer (CEO) Mr. Kurian mentioned a Keynote address earlier on Monday’s evening and emphasized the shift to Flash from HDD, and also to scale out the silos.

The company’s CEO mentioned that it’s recent move up to No. 2 in All-Flash array market and stated it expects to move upward to No. 1 and hence, would require substantial gain in market share as compared to Dell and EMC.

The company had spent sufficient amount of time in discussion on Data Fabric. The company is essentially focusing on building a data management platform which would result in allowing the customer to manage the data on premise in the corporate data center, or at off-premise public cloud. The company is also adding on services which sit on Data Fabric, however, the management stated that determining pricing is of key importance.

The company also presented its optimism of the ongoing success of its All-Flash FAS and also its ramp of SolidFire. The company included some new product announcements, such as Ontap Cloud. NetApp announced its expanded support for deployments related to software-only related to its ONTAP operating system on its Amazon Web Service public cloud, which serves to be an addition to its existing Microsoft Azure Support.

Also, it included Flash Solutions. The company introduced several of its new arrays in its flash lineup which promises some radical improvements in its cost base and density, along with a 15 TB SSD support. Also, it results in a much higher performance throughout its hybrid NVMe caching. The new arrays from the company would provide support to its both, 40 GB Ethernet SAN Connectivity and 32 GB Fiber Channel.

Moreover, it also included amendments in Cloud Sync. The new Cloud Synced data management solution facilities from the company are expected to facilitate a much seamless synchronization between its Amazon Web Service Cloud storage and On-Prem Systems.

The analyst increased the Price Target for the stock from $32 to $37, on back of a 13x multiple of its FY17 Expected Earnings per Share (EPS) which gives NetApp a credit of 50% for its net cash position.

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