How Will NetApp's Stock React To Its Upcoming Earnings?

NetApp (NTAP) is scheduled to release its fiscal fourth-quarter earnings on May 29, 2025, with analysts anticipating EPS of $1.90 on revenue of $1.72 billion, representing a year-over-year increase of 35% and 3%, respectively. Historically, NTAP stock has risen post-earnings 63% of the time, with a median one-day increase of 4.4%; traders may leverage these historical patterns for potential gains either pre- or post-earnings release. The company projects FY25 revenue between $6.49 billion and $6.64 billion and adjusted EPS between $7.17 and $7.27.

Analysis

NetApp (NTAP) is poised to report its fiscal fourth-quarter 2025 earnings on May 29, 2025, with analysts forecasting earnings per share (EPS) of $1.90 on revenues of $1.72 billion. These projections represent a significant 35% year-over-year increase in EPS from $1.41 and a 3% rise in sales from $1.67 billion. The company's full-year 2025 guidance anticipates revenue between $6.49 billion and $6.64 billion, a non-GAAP operating margin of approximately 28%-28.5%, and an adjusted EPS range of $7.17 to $7.27, reflecting a positive outlook. NetApp currently holds a market capitalization of $20 billion, supported by trailing twelve-month revenues of $6.5 billion, operating profits of $1.4 billion, and net income of $1.1 billion. Historically, NTAP stock has demonstrated a tendency to rise post-earnings, occurring 63% of the time over the last five years with a median one-day gain of 4.4% and a maximum observed increase of 18%. However, this positive reaction rate moderates to 58% when considering data from the last three years. The median for negative one-day returns stands at -5.8%, indicating potential downside volatility despite the generally positive historical trend. The article notes the potential for event-driven trading strategies based on these historical patterns and mentions the analysis of correlations between short-term and medium-term post-earnings returns, as well as the potential influence of peer earnings.

Key Decisions for Investors

• Investors should closely monitor NetApp's upcoming earnings release on May 29, 2025, particularly focusing on whether results meet or exceed the guided 35% EPS growth and 3% revenue increase, and any revisions to its full-year 2025 outlook.
• Consider the historical post-earnings stock performance, where NTAP has risen 63% of the time over five years with a 4.4% median gain, but also be aware of the potential for a -5.8% median loss on negative reactions and a slightly reduced positive reaction frequency of 58% in the last three years.
• Event-driven traders might explore strategies around the earnings announcement, leveraging the historical data on stock reactions and correlations, while acknowledging the inherent risks associated with earnings volatility.
• Evaluate NetApp's ability to achieve its projected non-GAAP operating margin of 28%-28.5% and full-year adjusted EPS of $7.17-$7.27, as these will be key drivers for the stock's performance beyond the immediate earnings reaction.