NTAP
NetApp, Inc.
$139.36
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 42.7% above fair value
You pay
$139.36
Bear
$78.11
Fair
$97.64
Bull
$117.17
Bear
$78.11
-44.0%
$5.69 × 12x P/E
Fair
$97.64
-29.9%
$5.69 × 15x P/E
Bull
$117.17
-15.9%
$5.69 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
24.5x
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 $120.50 from 71 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $97.64 per share.
Warnings
Dividend-based valuation: $30.01 (below our primary estimate by 65%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $120.50 (from 71 analysts). Our estimate is 29% 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