NTAP
NetApp, Inc.
$162.10
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 34.5% above fair value
You pay
$162.10
Bear
$96.43
Fair
$120.54
Bull
$144.66
Bear
$96.43
-40.5%
$6.37 × 12x P/E
Fair
$120.54
-25.6%
$6.37 × 15x P/E
Bull
$144.66
-10.8%
$6.37 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
25.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $167.00 from 71 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $120.54 per share.
Warnings
Dividend-based valuation: $30.01 (below our primary estimate by 69%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $167.00 (from 71 analysts). Our estimate is 43% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples