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NetApp Stock: Will The 60% Post-Earnings Rally Trend Hold Post Q1?

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Note: NTAP FY’2025 concluded in April

NetApp (NASDAQ: NTAP) is set to announce its fiscal first-quarter 2026 earnings on Wednesday, August 27, 2025. Analysts anticipate earnings of $1.54 per share on revenue of $1.54 billion, indicating a slight year-over-year decline in earnings and flat sales compared to the previous year’s figures of $1.56 per share and $1.54 billion in revenue. Historically, NTAP shares have increased following earnings reports 60% of the time, with a median one-day gain of 4.4% and a maximum observed increase of 18%.

For fiscal 2026, NetApp has projected revenue of $6.63–$6.88 billion (3–4% growth), gross margins of 71–72%, and non-GAAP EPS of $7.60–$7.90. First-quarter guidance expects revenues of $1.46–$1.61 billion and EPS of $1.48–$1.58. Management has highlighted profitability and shareholder returns, aiming to return up to 100% of free cash flow through dividends and buybacks. NetApp currently has a market capitalization of approximately $22 billion. Over the past twelve months, it produced $6.6 billion in revenue, achieving $1.4 billion in operating profit and $1.2 billion in net income, demonstrating its operational strength despite subdued top-line growth. Separately, check: Is Booking Holdings Stock Facing a 40% Downside?

For event-driven traders, historical earnings reaction patterns may offer valuable insights when preparing for results or reacting to post-release movements. That being said, for investors looking for more consistent upside than typically offered by individual stock events, the Trefis High Quality Portfolio presents an alternative, having outperformed the S&P 500 with cumulative returns exceeding 91% since its inception. View earnings reaction history of all stocks

NetApp’s Historical Odds of Positive Post-Earnings Return

Some insights on one-day (1D) post-earnings returns:

  • There are 20 earnings data points gathered over the last five years, with 12 positive and 8 negative one-day (1D) returns recorded. Overall, positive 1D returns occurred approximately 60% of the time.
  • However, this percentage drops to 45% if we consider data from the last 3 years instead of 5.
  • The median of the 12 positive returns = 4.4%, and the median of the 8 negative returns = -5.8%

Additional information for noted 5-Day (5D) and 21-Day (21D) returns post earnings is summarized along with the statistics in the table below.

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Correlation Between 1D, 5D, and 21D Historical Returns

A relatively lower-risk strategy (though ineffective if the correlation is weak) is to analyze the correlation between short-term and medium-term returns post earnings, identify a pair with the highest correlation, and implement the appropriate trade. For instance, if 1D and 5D exhibit the highest correlation, a trader may position themselves “long” for the following 5 days if the 1D post-earnings return is positive. Here’s some correlation data based on 5-year and more recent 3-year history. Note that the correlation 1D_5D refers to the relationship between 1D post-earnings returns and subsequent 5D returns.

Is There Any Correlation With Peer Earnings?

Occasionally, peer performance can influence post-earnings stock reactions. In fact, the pricing-in may commence before the earnings are announced. Here is some historical data regarding the past post-earnings performance of NetApp stock compared with the performance of peers that reported earnings just prior to NetApp. For a fair comparison, peer stock returns also denote post-earnings one-day (1D) returns.

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