After Its Recent Underperformance, How Likely Is A Turnaround In NetApp Stock?

+32.83%
Upside
72.80
Market
96.69
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NTAP: NetApp logo
NTAP
NetApp

NetApp stock (NASDAQ: NTAP) is down 4% in just the last one week and more than 5% over the last ten days, underperforming the S&P 500 on both occasions, which was up 1.4% and 3% over the respective periods. Even if you look at the change over the last one month (21 trading days), the stock has remained roughly flat, while the S&P 500 has jumped as much as 7%. One thing to note is that NetApp’s stock still stands almost 40% higher on a YTD basis (since December end 2020), and has risen from $80 in late August (since the announcement of its Q1 2022 earnings) to as high as $95 in mid-October. The company reported strong earnings, with revenue at $1.46 billion in Q1 ’22 (NetApp’s fiscal year ends in April), up from $1.3 billion in Q1 ’21, and with a strong check on expenses, operating income rose more than 80% from $136 million in Q1 ’21 to $249 million in Q1 ’22. Combined with a drop in the effective tax rate, EPS jumped from $0.35 to $0.91 over this period. We believe the recent pullback is likely a cool down after the stock’s latest rally, with investors booking some profits.

However, is NTAP stock set to drop further or could we expect some recovery? We believe that there is an average 53% chance of a rise in NTAP stock over the next month (21 trading days) based on our machine learning analysis of trends in the stock price over the last ten years. See our analysis on NetApp Stock Chance of Rise. For additional details about NTAP historical returns and comparison to peers, see NetApp (NTAP) Stock Return.

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Twenty-One Day: NTAP -0.5%, vs. S&P500 7%; Underperformed market

(39% likelihood event; 53% probability of rise over next 21 days)

  • NTAP stock decreased a marginal 0.5% the last twenty-one trading days (one month), compared to a broader market (S&P500) rise of 7%
  • A change of -0.5% or more over twenty-one trading days is a 39% likelihood event, which has occurred 975 times out of 2516 in the last 10 years
  • Of these 975 instances, the stock has seen a positive movement over the next twenty-one trading days on 521 occasions
  • This points to a 53% probability for the stock rising over the next twenty-one trading days

Ten Day: NTAP -5.4%, vs. S&P500 3%; Underperformed market

(16% likelihood event; 53% probability of rise over next 10 days)

  • NTAP stock decreased 5.4% over the last ten trading days (two weeks), compared to broader market (S&P500) rise of 3%
  • A change of -5.4% or more over ten trading days is a 16% likelihood event, which has occurred 405 times out of 2516 in the last 10 years
  • Of these 405 instances, the stock has seen a positive movement over the next ten trading days on 213 occasions
  • This points to a 53% probability for the stock rising over the next ten trading days

Five Day: NTAP -4%, vs. S&P500 1.4%; Underperformed market

(13% likelihood event; 51% probability of rise over next five days)

  • NTAP stock decreased 4% over a five-day trading period ending 10/29/2021, compared to the broader market (S&P500) marginal rise of 1.4%
  • A change of -4% or more over five trading days (one week) is a 13% likelihood event, which has occurred 333 times out of 2516 in the last ten years
  • Of these 333 instances, the stock has seen a positive movement over the next five trading days on 171 occasions
  • This points to a 51% probability for the stock rising over the next five trading days

 

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