William Blair Maintains Hold on NetApp (NTAP) Amid Product Margin Pressures

NetApp Inc. (NASDAQ:NTAP) is one of the most undervalued and overlooked large-cap stocks. On August 27, William Blair’s Jason Ader maintained a Hold rating on NetApp Inc. (NASDAQ:NTAP) without assigning a price target. His neutral stance reflects the company’s mixed Q1 FY 2026 (FY ends in April) performance and its decision to reaffirm full-year guidance.

In its results announced on August 27, quarterly revenue rose modestly on a currency-adjusted basis, but earnings per share came in below expectations. Ader pointed to weaker product gross margins, driven by an unfavorable mix, as a key drag on profitability. Even so, NetApp Inc. (NASDAQ:NTAP) reported solid enterprise demand in the Americas and stronger contributions from higher-margin services, which supported improvements in operating margin.

Looking ahead, second-quarter guidance was slightly above expectations, though management’s full-year revenue outlook remains conservative and trails consensus forecasts. The combination of stronger service momentum and lingering pressure on product margins leads Ader to maintain a balanced view.

Earlier, on August 25, a Bank of America analyst had raised his price target on NetApp Inc. (NASDAQ:NTAP) to $125 from $121, while maintaining a Neutral rating. The analyst expected fiscal Q1 results to come in at the upper half of guidance and anticipated Q2 guidance above street consensus, driven by strength in storage demand.

NetApp Inc. (NASDAQ:NTAP) provides cloud-led data services and enterprise storage solutions, helping organizations manage, protect, and modernize their data across hybrid and multi-cloud environments.

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Disclosure: None. This article is originally published at Insider Monkey.