Episode Details

NetApp (NTAP) Q1 FY2027 — Since the print the shares are up less than 3% - the tape had already run 42% above its 200-day average coming in. NetApp's headline 29.9% revenue growth includes a 14th fiscal week (FY2027 is a 53-week year) plus price increases pushed through in a memory shortage. Divide by weeks worked instead and growth is 20.6%. Free cash flow fell 35% to $401M while net income rose 61% over the same three months, as inventory rose 89% to $375M and turns fell from 14x to 6x. THE CALL: HOLD (3/5, MODERATE) — base-case value ~$162 vs ~$185 today. KEY METRICS: - Revenue $2.025B vs $1.559B a year ago, +29.9% headline / +20.6% per fiscal week - Adjusted EPS $2.58 vs a consensus near $2.12 - a 22% beat, $125M above NetApp's own guided range - Gross margin 70.1% this quarter, guided to 66-67% next quarter - a 3-4 point step down - Free cash flow $401M, down 35% YoY, while net income rose 61% over the same period - Inventory $375M vs $198M a year ago (+89%); inventory turns fell from 14x to 6x - All-flash revenue $1.3B, +47% YoY; hybrid-flash and legacy flat at $510M, +1% - Full-year adjusted EPS guidance raised to $9.73-$10.03 from $8.70-$9.00 - Fair value $162 (range $135-185) against a price near $185 - Susquehanna $195 and Wedbush $170, both Neutral What to watch: next quarter's print - does revenue clear $2.175B with gross margin at the upper end of the 66-67% guide and free cash flow recovering past $550M, which would say the inventory build converted into durable demand Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.