Note: NTAP FY’2025 concluded in April
NetApp (NASDAQ:NTAP) is set to announce its fiscal fourth-quarter earnings on Thursday, May 29, 2025, with analysts anticipating earnings of $1.90 per share on revenue of $1.72 billion. This would signify a 35% year-over-year increase in earnings and a 3% rise in sales compared to the previous year’s results of $1.41 per share and $1.67 billion in revenue. Historically, NTAP stock has risen 63% of the time following earnings announcements, with a median one-day increase of 4.4% and a maximum observed jump of 18%.
The company foresees full-year 2025 revenue to be between $6.49 billion and $6.64 billion. It also anticipates a non-GAAP operating margin of approximately 28%-28.5%, leading to an adjusted EPS expectation of $7.17 to $7.27. The company’s current market capitalization stands at $20 billion. Revenue for the past twelve months was $6.5 billion, and it recorded operational profitability with $1.4 billion in operating profits and a net income of $1.1 billion.
For traders focused on events, historical patterns might provide an advantage, whether by preparing ahead of earnings or responding to movements after the release. If you are looking for upside with lower volatility compared to individual stocks, the Trefis High Quality portfolio offers an alternative, having outperformed the S&P 500 and achieved returns exceeding 91% since its inception.
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NetApp’s Historical Odds Of Positive Post-Earnings Return
A few insights on one-day (1D) post-earnings returns:
- There are 19 earnings data points recorded over the last five years, with 12 positive and 7 negative one-day (1D) returns noted. In total, positive 1D returns were observed about 63% of the time.
- However, this percentage drops to 58% when we analyze data from the last 3 years instead of 5.
- The median of the 12 positive returns is 4.4%, while the median of the 7 negative returns stands at -5.8%
Further data for observed 5-Day (5D) and 21-Day (21D) returns post-earnings are summarized alongside the statistics in the table below.
Correlation Between 1D, 5D, and 21D Historical Returns
A strategy that carries relatively lower risk (although it may not be helpful if the correlation is weak) is to examine the correlation between short-term and medium-term returns after earnings, identifying a pair with the strongest correlation, and executing the appropriate trade. For instance, if 1D and 5D demonstrate the highest correlation, a trader might position themselves as “long” for the subsequent 5 days if the 1D post-earnings return is positive. Here’s some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D indicates the correlation between 1D post-earnings returns and the following 5D returns.
Is There Any Correlation With Peer Earnings?
Occasionally, the performance of peers can impact the stock reaction following earnings. In fact, the pricing-in might begin ahead of the earnings announcements. Here is some historical data comparing the post-earnings performance of NetApp stock with that of peers who reported earnings shortly before NetApp. For a fair comparison, peer stock returns also reflect post-earnings one-day (1D) returns.
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