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Why This 1 Value Stock Could Be a Great Addition to Your Portfolio

Zacks Equity Research
·2 min read

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.

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NetApp (NTAP)

NetApp provides enterprise storage as well as data management software and hardware products and services. The Sunnyvale, CA-based company’s product line comprises two storage platforms - FAS storage platform and E-Series platform. The company’s all-flash storage portfolio comprises NVMe-based storage systems and new cloud-based services in order to provide hybrid storage architecture.

NTAP is a Zacks Rank #3 (Hold) stock, with a Value Style Score of B and VGM Score of A. Shares are currently trading at a forward P/E of 12.6X for the current fiscal year compared to the Computer- Storage Devices industry's P/E of 12.6X. Additionally, NTAP has a PEG Ratio of 1.4 and a Price/Cash Flow ratio of 12.7X. Value investors should also note NTAP's Price/Sales ratio of 2.3X.

A company's earnings performance is important for value investors as well. For fiscal 2023, seven analysts revised their earnings estimate higher in the last 60 days for NTAP, while the Zacks Consensus Estimate has increased $0.02 to $5.47 per share. NTAP also holds an average earnings surprise of 9.6%.

With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding NTAP to their portfolios.


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Zacks Investment Research