NetApp is a leading provider of unified storage solutions, which span both block and file based solutions in a single system.
In the last earnings release the company reported 3Q 2012 results in line with analysts estimates. For the quarter ended in January NetApps revenue rose 21% to $1.57 billion a year earlier. These numbers allowed company to deliver ninth consecutive quarter over 20% year over year revenue growth. Therefore, the third-quarter earnings fell 36% due principally to higher charges and weaker margins.
According to Thomson-Reuters consensus, the stock is worth expensive. In fact price earnings ratio for this year is estimated at 28.06; also the enterprise value / revenue is high with estimated coefficient for this year at 2.06. These values levels are making the security more expensive than industry average.
Technically, the share is close to short and mid-term resistance. This area between 43 and 44 USD could stop the bullish trend seen since early January. Also in weekly data the share is in contact with a long-term resistance at 43.42 USD. The bearish trend could allow share to fill in the gap, which is formed last November. A bullish gap is formed on the occasion of earnings releases. The proximity of resistance levels could push the share in a downward trend in order to fill in the new gap.
Both technical pattern and high values fundamental levels, allow us to imagine a bearish trend. We could fix the target price around 40 USD short-term support and moving average 20 periods area. We suggest a stop loss above 44 USD, the cross of this zone can allow to continue a bullish trend.