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On Thursday, JPMorgan analyst Pinjalim Bora adjusted the price target for Pure Storage (NYSE:PSTG) to $70.00, a decrease from the previous $75.00, while maintaining a Neutral rating on the company’s stock. The revision follows Pure Storage’s report of a strong start to the year, with financial results surpassing expectations, although the company has decided to maintain its full-year outlook due to uncertain visibility in the second half of the year amid macro-economic concerns. With a current market capitalization of $18.04 billion and a P/E ratio of 167.48, InvestingPro analysis suggests the stock is trading above its Fair Value. Investors seeking deeper insights can access the comprehensive Pro Research Report, which provides detailed valuation metrics and growth projections.
Pure Storage experienced a 12% year-over-year revenue growth, slightly above consensus estimates, with the increase primarily driven by product revenue rather than subscription services. The company’s impressive gross profit margin of 69.84% and strong financial health score from InvestingPro underscore its operational efficiency. The company highlighted widespread traction in both traditional sales and OpEx-based sales, the latter of which saw TCV sales for Evergreen//One and RPO growth accelerate this quarter. This was partly due to a significant deal that was made.
The company’s new product, Fusion 2.0, has been met with positive response, already in use by almost 100 customers to manage data infrastructure. Additionally, Pure Storage had a strong quarter in terms of AI-related customer wins. Regarding its partnership with Meta (NASDAQ:META), Pure Storage confirmed that it is on schedule to deliver 1-2 exabytes of its solutions in the second half of the year, although the revenue impact from licensing fees is minimal and has been accounted for in the guidance framework. InvestingPro data reveals the company holds more cash than debt on its balance sheet, with analysts expecting continued net income growth this year.
Bora noted that despite the dynamic macroeconomic environment, Pure Storage’s ongoing strength is commendable. The firm’s medium-term thesis remains unchanged, believing that Pure Storage continues to stand out for product innovation, especially as it plans to expand the capacity of its DirectFlash Modules (DFM) in the coming years. However, the analyst also stated that the stock might stay within a certain range in the near term, given the lack of detailed financial information about the Meta deal and other potential hyperscaler wins in the context of shifting trade policies. The company maintains a healthy current ratio of 1.61 and has demonstrated consistent revenue growth with a 5-year CAGR of 14%.
In other recent news, Pure Storage Inc . reported its Q1 2026 financial results, revealing a significant miss on earnings per share (EPS) expectations. The company’s EPS was -$0.04, falling short of the forecasted $0.25, which contributed to investor disappointment. Despite this, Pure Storage experienced robust revenue growth, with revenue reaching $779 million, surpassing the forecast of $770.1 million. This revenue increase was driven by a 17% rise in subscription services revenue and an 18% growth in annual recurring revenue, highlighting the company’s strong performance in these areas.
Additionally, Pure Storage reaffirmed its FY2026 revenue and operating margin guidance, projecting Q2 revenue at $845 million. The company remains optimistic about its second-half performance, particularly with the anticipated demand for its hyperscale solutions. In terms of strategic initiatives, Pure Storage announced a major agreement with Nutanix (NASDAQ:NTNX) to integrate their platforms, aiming to provide a modern, scalable virtualized environment. Furthermore, the company highlighted its collaboration with Meta, which is progressing as expected, and a new partnership with SK Hynix to optimize flash storage for hyperscale environments.
In executive news, Pure Storage’s Chief Financial Officer, Kevin Chrysler, announced his departure from the company to pursue a new opportunity. He will remain until a successor is in place to ensure a smooth transition. This marks a significant leadership change as the company navigates the dynamic macroeconomic environment and continues its strategic growth initiatives.
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