US stock futures edge lower after S&P 500 hits record high; PCE data in focus
Investing.com - UBS raised its price target on Pure Storage (NYSE:PSTG) to $55.00 from $50.00 on Thursday, while maintaining a Sell rating on the data storage company’s stock. The company, currently valued at $25.12 billion, appears overvalued according to InvestingPro analysis, despite its strong financial health metrics.
Pure Storage reported revenue of $861 million, approximately 1.4% above UBS estimates, with an operating margin of 15.1%, which was 20 basis points higher than expected. The company achieved about 11% growth in its product segment compared to approximately 1% growth in the same period last year. This performance aligns with the company’s impressive 10.85% revenue growth over the last twelve months, supported by a robust gross margin of 69.25%.
The company increased its fiscal year 2026 revenue guidance by 2.8% at the mid-point but left its operating margin guidance essentially unchanged. Revenue strength was broad-based across Pure Storage’s portfolio, with high-end performance storage contributing to gross margin improvements despite pressures from NAND pricing.
Management confirmed expectations to ship 1 to 2 exabytes, "possibly more," later in fiscal year 2026. The company noted that revenue recognition from Meta in the quarter was not material to its results.
Pure Storage indicated that the anticipated 1 to 2 exabytes shipment would not materially impact its fiscal year 2026 results, which UBS estimates would contribute no more than 1 to 2 percentage points to the company’s growth. For deeper insights into Pure Storage’s valuation and growth prospects, including 13 additional ProTips and comprehensive financial metrics, visit InvestingPro.
In other recent news, Pure Storage reported stronger-than-expected second-quarter fiscal 2026 results, leading to several analyst firms raising their price targets for the company. Needham increased its price target to $85, highlighting Pure Storage’s exceeded consensus revenue estimates and its increased full-year revenue outlook. The company also saw a 22% year-over-year growth in its Remaining Performance Obligation (RPO). Raymond James set a new price target of $88, citing the company’s "beat and raise report" that positively surprised the market. TD Cowen raised its target to $85, noting Pure Storage’s new revenue streams from Meta, with high-margin royalty revenues. Lake Street Capital Markets adjusted their target to $80, acknowledging the company’s consistent revenue acceleration and improved product gross margins. BofA Securities also raised its target to $80, maintaining a Neutral rating while noting the company’s improved operating margins. These developments reflect a positive outlook from analysts following Pure Storage’s recent earnings performance.
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