Is NetApp Inc (NTAP) overvalued?
On Equity Rank's model estimate, NTAP trades 18% above its fair value. NetApp Inc (NTAP) last closed at $169.19; the multi-method model fair value is $143.94.
| Price | Model fair value | Price vs model |
|---|---|---|
| $169.19 | $143.94 | 18% above |
What the answer rests on
- 3 of 10 valuation methods put NTAP's value above its price and 7 put it below, so the methods disagree.
- To justify today's price, NTAP's free cash flow would need to grow about 10.4% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 29.1% a year.
- NTAP trades at 26.5 times its last year's earnings, against a median of 25.8 for 34 profitable Hardware companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 4% above to 91% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind NTAP's fair value · What prices assume · Other companies