I'm nothing like an expert WRT NTAP, or much else for that matter. But I have looked at it recently (it's also one of the two stocks I own in my IRA--along with RMBS. So much for the inheritance...).
I don't think you'll find a consensus that NTAP is a Gorilla--King of NAS or Prince of Storage is a more common assessment. Although I personally was insufficiently rigorous in my analysis of the company, assuming "it's up a gazillion percent, it must be a Gorilla, or at least a heck of a King". I also fell prey to the "it's down a gazillion percent, it must be oversold" thought. When i bought at 35, I was pretty psyched.
I haven't followed the company over the last couple of months (I'm 800 messages behind on the NTAP thread), although I assume that any substantial news--good or bad--would be bubbled up to this thread.
According to their late 10Q, adjusted Free Cash Flow over the 9 months ending 1/31/01 was $120 million (NTAP excludes tax benefits from stock options from CFO--bully for them). That amounts to a yearly run rate of $160 million. That's versus $30 million for the 9 months ending 1/31/00 (I'm not sure about the amount for the previous fiscal year, because I can't quickly figure out how they accounted for stock options in the 10K).
Revenues have continued to roughly double YOY, although the latest sequential growth was "merely" 10% (a year prior, sequential growth was 20%).
OK, so we have yearly FCF of roughly $160 million, and a market cap of $3.9 billion--for a P/FCF of 24.
If you feel--as many felt a year ago--that NTAP was a strong Prince or King, with the ability to sustain a rapid growth rate over the long haul, that seems like a very reasonable price to me. However, I'd like to reiterate that I haven't followed the company close of late, and I really don't know if it is a strong Prince or King, with the ability to sustain a rapid growth rate over the long haul.
JMHO,
Ethan |
