NetApp (NTAP) stock has proven surprisingly resilient, even as virtualization penetration is no longer a major growth driver in data hosting and unstructured Big Data takes center stage, says Brian G. Alexander, Managing Director and Director of Technology Research at Raymond James & Associates, Inc.
“A lot of investors expected them to guide lower, and that wasn’t the case,” Alexander said. “They seem to be gaining momentum, and maybe related to that, I was surprised that more of my peers didn’t upgrade the stock, given that that was the second consecutive quarter that NetApp failed to disappoint.”
Alexander rates NTAP an “outperform” name, and he says the company seems to have stabilized after a period of consecutive missed guidances in 2012. He also says the company surprised with its resiliency relative to EMC Corporation (EMC) and the overall market, which showed weakness and caught some off guard.
“That would suggest to me that they have reached a level of stability, and given that they just refreshed their largest product line, what they call the 3000 series, one would think that that momentum should continue, and perhaps part of their previous weakness in sales was customers anticipating a product refresh and maybe holding off on some purchasing,” Alexander said.
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