Gold prices set for weekly drop as dollar surges; Trump tariff action in focus
On Thursday, Evercore ISI reaffirmed its positive stance on Pure Storage (NYSE:PSTG), an $18 billion market cap company, maintaining an Outperform rating and a price target of $70.00. In their assessment, Evercore ISI highlighted Pure Storage’s performance, which surpassed April-quarter expectations. The company reported revenue and earnings per share (EPS) of $779 million and $0.29, respectively, exceeding the consensus estimates of $770 million in revenue and $0.25 EPS. Year-over-year revenue growth was noted at 12%, maintaining the company’s impressive 14% five-year revenue CAGR, with a significant contribution from the Subscription Services segment, which saw a 17.4% increase and constituted over half of the total sales for the first time in the firm’s history.
The company’s Evergreen One Total (EPA:TTEF) Contract Value (TCV) also saw a substantial year-over-year growth of 70% during the quarter. According to InvestingPro analysis, Pure Storage maintains a strong financial health score of 2.84 (rated as GOOD), with a solid current ratio of 1.61 and more cash than debt on its balance sheet. Despite not observing an extraordinary rise in Everything-as-a-Service (XaaS) adoption in the first fiscal quarter, management remarked that customers tend to prefer operational expenditure models like Evergreen One during periods of economic uncertainty. Pure Storage’s Meta (NASDAQ:META) hyperscale program is progressing as anticipated, with the company maintaining its forecast to ship double-digit exabytes by fiscal year 2027, although it refrained from specifying the expected range.
Furthermore, Pure Storage issued guidance for the July quarter that met analysts’ predictions and reiterated its fiscal year 2026 revenue guidance, projecting an 11% year-over-year growth and approximately 17% operating margins. This includes an anticipated margin impact of around 100 basis points due to operating expenses related to the Meta program. InvestingPro data shows the company currently trades at premium multiples, with a P/E ratio of 167.5x and an EV/EBITDA of 73.4x, reflecting high growth expectations. While visibility into the second fiscal quarter is clear, the company expressed a lack of visibility into the second half of the year, which is why it has not adjusted its guidance for the latter half to reflect the first half’s performance.
In a notable corporate development, CFO Kevan Krysler is set to depart from Pure Storage. Evercore ISI believes that Pure Storage continues to navigate a challenging demand environment effectively and is well-positioned to capitalize on the increasing adoption of artificial intelligence in the enterprise sector. The firm’s Outperform rating and $70 price target remain unchanged, reflecting confidence in Pure Storage’s market position and potential for growth. For deeper insights into Pure Storage’s valuation, growth prospects, and 11 additional exclusive ProTips, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Pure Storage reported its Q1 2026 earnings, which showed a notable miss on earnings per share (EPS), coming in at -$0.04 against a forecast of $0.25. Despite this, the company’s revenue exceeded expectations, reaching $779 million compared to the projected $770.1 million, driven by a 12% year-over-year increase. The company also experienced strong growth in its subscription services and annual recurring revenue, which rose by 17% and 18% respectively. Pure Storage reaffirmed its FY2026 revenue and operating margin guidance, projecting Q2 revenue at $845 million, an increase of 10.6% year-over-year.
In terms of analyst actions, JPMorgan adjusted Pure Storage’s price target from $75 to $70 while maintaining a Neutral rating, citing macroeconomic concerns impacting the company’s visibility in the second half of the year. The company continues to see traction in AI-related customer wins and confirmed its ongoing partnership with Meta, expecting to deliver 1-2 exabytes of solutions in the latter half of the year. Additionally, Pure Storage’s new product, Fusion 2.0, has been well-received, with nearly 100 customers already utilizing it to manage data infrastructure. The company also announced a new collaboration with SK Hynix to optimize flash storage for hyperscale environments.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.