NetApp's consistent buybacks and raised fiscal 2027 revenue guidance support per-share earnings growth, but the stock's 27.2x trailing earnings multiple already prices in sustained AI-driven demand.
NetApp's consistent buybacks and raised fiscal 2027 revenue guidance support per-share earnings growth, but the stock's 27.2x trailing earnings multiple already prices in sustained AI-driven demand.
NetApp shares have surged 92% over the last six months, fueled by a combination of aggressive share buybacks and strong AI-driven demand for flash storage. While the company's systematic reduction of share count has bolstered earnings per share, investors are now paying a 27.2x earnings multiple that assumes sustained revenue growth through fiscal 2027.
By reducing the total number of outstanding shares, NetApp allows each remaining share to represent a larger portion of the company's net income, resulting in earnings per share growth that outpaces total net income growth.
While buybacks provide a reliable floor, the current 27.2x earnings multiple is primarily driven by market expectations for sustained demand in flash arrays and AI-related data infrastructure.