Short-Sellers Are Piling Onto NetApp, Inc. (NTAP)

Short sellers are betting against NetApp, Inc. (NASDAQ:NTAP). Looking at the sentiment indicator for the NTAP stock we see that the short-interest ratio is at 4.670298 while the average analyst recommendations at 2.1 suggests buying these shares. Between September 28 and October 15, the total number of shorted shares amounted to 11.11 million shares. That was 5.4% more than the total of 10.54 million shares in the space of prior two weeks, which means more traders or funds betting that the stock will go down. Average daily volume for NetApp, Inc. at the October 15th settlement jumped to 2,378,680, as compared to 2,136,170 at the September 28th report. That brought days to cover to a 5.35% decrease from the 4.934254 days to cover recorded at the prior short interest data release.

Investors will get their next glimpse of NTAP’s Q2 earnings on November 14. Analysts are forecasting revenue to climb 6.3 percent to $1.51B in the next fiscal quarter, while earnings are seen soaring by nearly 22.22 percent to $0.99 per share. History has shown that shares in NetApp, Inc. have gone up on 19 different earnings reaction days and are predicted to add 0.06 percent when the company reports upcoming earnings. In last reported earnings results, it earned $1.04 per share, better than the $0.8, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $1.47B, better than the $1.42B analysts expected. Earnings are estimated to increase by 86.8 percent this year, 11.05 percent next year and continue to increase by 16.9 percent annually for the next 5 years.

NetApp, Inc. (NTAP) will probably climb 23.48 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $105 high price target. This represents a whopping 46.2 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $90.5, which represents a return potential of 26.01 percent when compared to the closing price of the stock of $71.82 on Friday, October 26. The lowest price target for the stock is $35 — slightly more than -51.27 percent from NTAP’s current share price.

The stock is currently hovering around the first support level of $70.13. Below this, the next support is placed in the zone of $68.45. Till the time, the NTAP stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 34 on daily chart, which may remain a cause for comfort. If the price breaks below $68.45 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $73.63 mark may result into a pull-back move towards $75.45 level.

On 26th of October, NetApp, Inc. (NASDAQ:NTAP) shares ended lower after a volatile session. The shares dropped -4.42 points or -5.8 percent at $71.82 with a heavy trade volume of 4.292 million shares. After opening the session at $73.37, the shares went as high as $73.76 and as low as $70.26, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $18.7 billion and now has 260.84 million shares outstanding. NetApp, Inc. (NTAP) stock has lost -16.15 percent of market value in 21 trading days.

NTAP stock has a trailing 3-year beta of 1.42, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $3.91 a share in the trailing twelve months. The stock’s value has surged 29.83 percent year to date (YTD) against a rise of 61.68 percent in 12 month’s time. The company’s shares still trade -18.46 percent away from its 1-year high of $88.08 and 66.1 percent up from 52-week low of $43.24. The average consensus rating on the company is 2.1, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of NetApp, Inc. (NTAP) are trading at a P/E ratio of 20.44 times earnings reported for the past 12 months. The industry NTAP operates in has an average P/E of 20.59. Its P/E ratio went as low as 19.1X and as high as 30.66 over the 5-year span. Further, it is sporting a 3.09 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1.31. 63.2 percent is the gross profit margin for NetApp, Inc. and operating margin sits at 20.3 percent. Along with this, the net profit margin is 3.7 percent.

Let’s take a look at some insider activity at NetApp, Inc. (NASDAQ:NTAP) and see the pattern. The earliest insider trade took place on 10/22/2018. Kurian George parted with a total of 11.44 thousand shares of company at average share price of $78.46. The total for the sales was set at $897.19 thousand. After this transaction, the CEO account balance stood at 12.04 thousand shares. The stock lost -8.04 percent since that insider sale. On 10/16/2018, Richard Henri P, EVP, Go To Market, sold 2.53 thousand shares at a price per share of $76.99. This removed 194.4 thousand shares from the insider’s fortune and the stock saw a -6.29 percent retreat in value since the news became public. This transaction left 64.28 thousand shares in the EVP, Go To Market account.

On 10/01/2018, CEO Kurian George performed a sale transaction worth $516.6 thousand. This sale at $86.1 each has eliminated 6 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -16.2 percent decrease since the transaction was reported. The insider now is left with 23.48 thousand shares remaining in the account. Kurian George, who performs the CEO job, sold 46.64 thousand shares for $3.95 million. The disposal occurred on 09/20/2018 was priced at $84.76 per share. The share price plunged -14.88 percent since the reporting date. Kurian George now left with a stake of 17.51 thousand NTAP stock worth $1.26 million after the insider selling.