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Investing.com - Evercore ISI raised its price target on Pure Storage (NYSE:PSTG) to $80.00 from $70.00 on Thursday, while maintaining an Outperform rating on the stock. The company, now valued at nearly $20 billion, has seen its shares surge over 9% in the past week. According to InvestingPro analysis, the stock currently trades at a premium valuation with a P/E ratio of 155x.
The revision follows Pure Storage’s quarterly results that exceeded expectations, with revenue of $861 million and earnings per share of $0.43, compared to analyst estimates of $846 million and $0.39, respectively. The company reported approximately 12.7% overall sales growth, with double-digit increases in both product (11%) and services/software (15%) segments. InvestingPro data shows the company maintains strong financial health with a "GOOD" overall score, supported by robust growth metrics and profitability indicators. Get access to 13 additional exclusive ProTips and comprehensive analysis with an InvestingPro subscription.
Pure Storage’s gross margins reached 72.1%, representing a 120 basis point improvement quarter-over-quarter, which Evercore ISI attributes to better product mix and an improved pricing environment. The company’s guidance for the second half of its fiscal year suggests revenue acceleration with mid-teens year-over-year growth expected, compared to 12-13% growth in the first half. This outlook aligns with the company’s historical performance, as InvestingPro data shows a strong 5-year revenue CAGR of 14%.
For fiscal year 2026, Pure Storage now forecasts sales of $3.615 billion and earnings per share of $2.00, surpassing previous Street expectations of $3.52 billion and $1.81, according to Evercore ISI’s estimates.
The company has begun seeing revenue contribution from its META deployment, with expectations to deploy 1-2 exabytes in the second half of this year and double-digit exabytes in fiscal year 2027.
In other recent news, Pure Storage reported its fiscal second-quarter earnings, surpassing analyst expectations. The company achieved an earnings per share (EPS) of $0.43, exceeding the forecast of $0.39. Additionally, Pure Storage reported revenue of $861 million, which was higher than the projected $846.2 million. The company’s performance was further highlighted by an increase in remaining performance obligations and improved gross profit margins, with product gross profit margin rising by 4% quarter-over-quarter. Piper Sandler responded to these results by raising its price target for Pure Storage from $66 to $78, maintaining an Overweight rating on the shares. These developments reflect positively on the company’s financial health and operational efficiency.
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