Deutsche Bank analysts provided their outlook on NetApp, Inc. (NASDAQ:NTAP) ahead of the company’s upcoming Q1 earnings, expecting largely in-line results, although risks are to the downside as the analysts are seeing macro uncertainties and supply shortages delaying customers' purchasing decisions across the IT hardware space.
According to the analysts, customers are more inclined to move toward a consumption model in this environment, which could benefit IT hardware companies that also offer cloud services. Specific to NetApp, a quarter ago the company had a setback in its Public Cloud business and lowered its ARR growth forecast to approximately 60% year-over-year exiting 2023, with an indication that the growth will accelerate in the back half of 2023.
The analysts said they will continue to monitor the progress of this business, as they believe it is the key for its stock to re-rate higher. The analysts maintained their buy rating and $84 price target on the company’s shares.