NetApp's (NTAP) fiscal Q1 results and Q2 guidance will likely come in ahead of market expectations, Wedbush Securities said in a note Monday.
The company is scheduled to report its financial results Wednesday after market close.
Wedbush said, however, that the company's stock is also largely reflecting this, with the "shares re-rating sharply since May and trading to an all-time high earlier this month." It said that it still believes that "pricing is doing most of the work" in NetApp's model.
The analysts noted that NAND and DRAM pricing continued to rise through calendar Q2 and into calendar Q3, and while the company has been lifting system pricing since January, higher pricing in the company's fiscal Q1 will likely push revenue toward the high end of the $1.75 billion to $1.90 billion guidance, and may even exceed guidance.
Meanwhile, the investment firm also expects NetApp's management to raise its outlook. The analysts said that if the company follows Everpure's (P) lead and "forecasts an annual growth rate moving forward in-line with Q1 results," it may issue a new sales outlook above $8 billion in revenue for fiscal 2027, which "would push EPS into the low teens for the current fiscal year and perhaps into the mid-teens next year."
Wedbush reiterated its neutral rating and $150 price target on NetApp.
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