What You Need to Know About NetApp Stock Ahead of Earnings

NetApp Inc. (NASDAQ:NTAP) is set to release its fiscal third-quarter results after the market close on Wednesday, Feb. 23. In their most recent quarter NetApp reported earnings of $1.28 per share and beat expectations by a margin of $0.07. Wall Street analysts anticipate that NetApp will deliver earnings of $1.28 per share.

The stock is up 29% in the last 12-month, though it's struggling just below the year-to-date breakeven, as well as the $92 level. The 200-day moving average looks like it could provide support going forward, while the $83- $86 region has also provided padding on the charts

The equity tends to do well after earnings. During the last two years, the stock settled lower after just three of its eight reports, all occurring back in early 2021 and 2020. Regardless of direction NTAP has averaged a 6.2% post-earnings move during this time period, which is slightly lower than the 8.3% swing the options pits are pricing in this time around. 

Speaking of options pits, NetApp's are quite bearish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity sports a 50-day put/call volume ratio of 1.76, which stands higher than all other readings from the past year. In other words, options traders have been picking up long puts at their quickest pace in a year. 

The cloud data services name has struggled to produce consistent top and bottom line growth in recent years. NTAP's revenues decreased 12% for fiscal 2020 and its net income dropped 38% between fiscal 2019 and fiscal 2021. Nonetheless, NetApp’s revenues and net income are up by 2.3% and 1139%, respectively, since fiscal 2018 which indicates significant progress on the bottom line. Additionally, NTAP is estimated to grow its revenues 5.8% and its net income 9.5% in fiscal 2023. NetApp also holds a solid balance sheet with $4.56 billion in cash and $2.91 billion in total debt.

NetApp stock boasts a decent valuation with a forward price-earnings ratio of 15.27 and a price-sales ratio 3.32. NTAP also offers a forward dividend of $2.00 with a solid dividend yield of 2.25%, making it an intriguing option for long-term investors.