If you’re thinking about what to do with NetApp stock right now, you’re not alone. The company’s recent journey has left many investors pausing to consider their next move. After some sharp runs in previous years, NetApp closed at $121.82 most recently. Over the past week, the stock gained 2.8%, which followed a relatively calm month at just 0.5%. So far this year, NetApp is up 5.1%, but if you zoom out, the full picture is even more interesting. The stock has more than doubled in three years, boasting gains of 109.2%, and is up an eye-catching 194.5% over five years, though last year it slipped slightly by 2.3%.
These performance swings come against a backdrop of shifting market preferences. Investors have been reevaluating tech hardware names amid changing narratives about infrastructure, storage demand, and AI-driven data centers. NetApp has often found itself in the middle of this debate, and the recent price action suggests that the market is beginning to re-rate its prospects and risks.
With a valuation score of 5 (out of a possible 6), NetApp ticks the box for undervaluation across most major checks. That’s a strong signal that this company might be flying under the radar for value-oriented investors. In the next section, we’ll break down exactly how those valuation scores are calculated, and why traditional metrics might not tell the whole story. There may be an even smarter way to think about NetApp’s value that we’ll get to by the end of the article.
A Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by projecting future cash flows and discounting them back to today’s dollars. This approach helps investors determine what a company is worth, based on its ability to generate cash in the years ahead rather than on market hype or recent earnings.
For NetApp, analysts and modelers look at its Free Cash Flow (FCF), which currently sits at $1.65 billion. Over the next few years, cash flow is projected to steadily increase, with analyst estimates reaching $1.91 billion by 2028. In addition, independent extrapolations see ten-year FCF growing to about $2.5 billion in 2035, supported by consistent year-over-year growth, albeit at slightly moderating rates.
Based on these forecasts, the DCF analysis assigns NetApp an intrinsic fair value of $178.99 per share. This suggests the current share price is about 31.9% below its projected worth, indicating that the stock is significantly undervalued compared to its long-term cash-generating potential.
Our Discounted Cash Flow (DCF) analysis suggests NetApp is undervalued by 31.9%. Track this in your watchlist or portfolio, or discover more undervalued stocks.
For profitable companies like NetApp, the Price-to-Earnings (PE) ratio is a widely used and practical metric for valuation. The PE ratio shows how much investors are willing to pay for each dollar of current earnings, helping to assess if a stock is priced reasonably relative to its profits.
The “right” PE ratio for a stock depends on expectations for future growth, risks, and the company’s ability to sustain its performance. Generally, higher growth companies or those perceived as lower-risk tend to command a higher PE, while companies with slower growth or higher risks often trade at lower multiples.
NetApp currently trades at a PE ratio of 20.8x. This is below both the technology industry average of 24.2x and the average of its immediate peers at 24.6x. These comparisons suggest the stock may be priced conservatively.
However, instead of relying solely on broad industry or peer benchmarks, Simply Wall St calculates a “Fair Ratio” based on NetApp’s unique characteristics, including earnings growth, profit margins, risk profile, industry, and market capitalization. This proprietary approach gives a more tailored and meaningful multiple. In this case, the Fair Ratio for NetApp is 27.5x.
Since NetApp’s current PE of 20.8x is significantly lower than its Fair Ratio of 27.5x, the company appears undervalued on this metric.
Earlier we mentioned there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a story investors create to express their own outlook for a company, linking what they believe about its future to a specific financial forecast and a calculated fair value. Instead of just looking at static numbers, Narratives allow you to set your own assumptions for NetApp’s future revenue, profit margins, and risk, tying your perspective directly to a clear estimate of fair value.
This makes Narratives a powerful but accessible tool, now available in Simply Wall St’s Community page, where millions of investors share and refine their investment thinking. Narratives help you decide when to buy or sell by automatically comparing your Fair Value to the current share price, and they are refreshed whenever new financial results or market events emerge, keeping your view up to date. For NetApp, for example, one investor might believe in sustained cloud adoption and see a fair value as high as $130, while another, more cautious about competition and margins, might see the stock as worth just $100. Narratives let you easily capture and act on your own insights, so every investment decision truly reflects your thinking.
NasdaqGS:NTAP Community Fair Values as at Oct 2025
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
