© Reuters. Susquehanna expects NetApp hybrid cloud (NTAP) revenue to decline
By Sam Boughedda
Shares of NetApp (NASDAQ:) were downgraded to Neutral from Positive by an analyst in Susquehanna on Monday.
In a broad note on tech hardware stocks, the analyst said their newly introduced fiscal year 24 estimates for NetApp reflect an average year-over-year decline in hybrid cloud revenue. , mainly due to a decrease in product sales.
“The company has certainly benefited from double-digit Y/Y growth in AFA revenue, up 20% y/y. However, we forecast the growth rate to slow, reaching 12 percent growth. % in FY 23 and in the low single digit growth in FY 24. We don’t have the confidence or ability to argue that AFA growth will accelerate in FY 25, ” said the analyst.
Susquehanna also forecast 30% year-over-year public cloud revenue growth for NetApp in FY24, following 55% growth in FY23.
“While Public Cloud revenue continues to grow, in our view it was the decline in Hybrid Cloud Products revenue that caused 2014 revenue to fall. Therefore, FY15 EPS estimates. Our key 24 of $5.30 also reflects the new average – a Y/Y single-digit decline and is 12% below the current consensus estimate,” the analyst added.
NetApp stock fell more than 2% on Monday.
