With Earnings Looming, NetApp Stock is Soaring to New Highs

NetApp, Inc. (NASDAQ:NTAP) is an American hybrid cloud data services and data management company. NetApp provides systems, software and cloud services that enable users to run their applications optimally from data center to cloud, whether they are developing in the cloud, moving to the cloud, or creating their own cloudlike experiences on premises.

On May 27, NetApp announced that the company will be virtually participating in fireside chats at the Cowen TMT Conference, the Evercore TMT Conference, the Bank of America Tech Conference, and the NASDAQ Investor Conference. These conferences will be held on June 3, 8, 10, and 17.

NTAP is also scheduled to report its fiscal fourth-quarter earnings on Wednesday, June 2. So far, NetApp has managed to beat Wall Street's earnings expectations on all four of the latest earnings reports released.

For its fiscal second quarter in 2020, NetApp beat analyst estimates by a margin of $0.15 and reported an earnings per share (EPS) of $1.19. For the third quarter of fiscal 2021, NetApp's EPS decreased to $0.73, but still beat expectations by a margin of $0.32. For the fourth quarter of fiscal 2021, NTAP posted an increase in earnings, rising to $1.05 per share while beating estimates by a margin of $0.32. For the first quarter of fiscal 2021, NetApp reported an EPS of $1.10 and beat expectations by a margin of $0.09.

NetApp stock has increased about 77% in price over the past 12 months and nearly doubled since its June 2020 low of $39.96. Additionally, shares of NetApp stock have grown about 22% year-to-date and just yesterday hit a two-year high of $80.66. NetApp also has a forward dividend of $1.92 and a dividend yield of 2.42%.

Moreover, NetApp stock trades at a relatively high price-earnings ratio of 29.93, making it difficult to argue that NTAP is currently anything more than a risky dividend play. However, NetApp stock also has a forward price-earnings ratio of 17.27, indicating that analysts expect the company to see a significant boost in earnings over the coming quarters, starting with the report due out on Wednesday. Whether that happens or not remains to be seen.