NTAP
NetApp, Inc.
$185.59
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 94.5% above fair value
You pay
$185.59
Bear
$76.32
Fair
$95.40
Bull
$114.48
Bear
$76.32
-58.9%
$6.36 × 12x P/E
Fair
$95.40
-48.6%
$6.36 × 15x P/E
Bull
$114.48
-38.3%
$6.36 × 18x P/E
Adjust Assumptions
15.0x
6.36$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
29.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (71 analysts)
$194.22
Divergence from AlphaVal
51%
Summary
Applying a 15x P/E to adjusted EPS of $6.36, the base-case value is $95.40 per share. DDM cross-check: $30.01.
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 $194.22 (from 71 analysts). Our estimate is 51% 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