Pure Storage stock price target raised to $80 from $70 at Lake Street

Investing.com - Lake Street Capital Markets raised its price target on Pure Storage (NYSE:PSTG) to $80.00 from $70.00 on Thursday, while maintaining a Buy rating on the data storage company’s shares. The stock, currently valued at nearly $20 billion, has shown impressive momentum with a 9.2% gain in the past week, though InvestingPro analysis indicates the shares are trading above their Fair Value.

The firm noted that Pure Storage outperformed in Q2, marking the third consecutive quarter of revenue acceleration. The company’s guidance anticipates 15.5% growth in the second half of the year after posting 12.5% growth in the first half, with broad-based performance across its product portfolio helping product gross margins recover to 68.0% from 64.0% in the previous quarter. This aligns with the company’s strong overall gross profit margin of 69.25% and revenue growth of 10.85% over the last twelve months.

Lake Street highlighted that Meta contributed licensing revenue for the first time, though it wasn’t the primary driver of Q2 outperformance. The firm expects more substantial high-margin Meta revenue in Q3 and Q4, with potential contributions from other hyperscalers as Pure Storage reported increased interest from Meta competitors. InvestingPro data reveals multiple positive indicators, including strong financial health and expected net income growth this year. Subscribers can access 13 additional ProTips and comprehensive analysis in the Pro Research Report.

The analyst attributed Pure Storage’s revenue outperformance to its Enterprise Data Cloud architecture, which provides access to enterprise-wide storage regardless of location. The company raised its guidance based on solid first-half execution and a healthy pipeline of large deals.

Lake Street acknowledged that Pure Storage’s performance and guidance for continued revenue acceleration served as a "wake-up call" for those expecting the company would struggle to maintain mid-teens revenue growth, prompting the firm to raise both its outlook and price target. The company maintains a healthy financial position with more cash than debt on its balance sheet and an overall "GOOD" financial health score according to InvestingPro analysis.

In other recent news, Pure Storage reported stronger-than-expected second-quarter fiscal 2026 earnings, surpassing analyst estimates with $861 million in revenue and earnings per share of $0.43. This performance led several analyst firms to adjust their price targets for the company. Raymond James raised its price target to $88, maintaining an Outperform rating, while Needham increased its target to $85 with a Buy rating, citing confidence in the company’s future revenue prospects. BofA Securities adjusted their target to $80, keeping a Neutral rating, following the company’s strong earnings and improved operating margins. Evercore ISI also raised its target to $80, highlighting the company’s 12.7% sales growth, with significant increases in both product and services/software segments. Piper Sandler set their new price target at $78, noting the company’s accelerating remaining performance obligations and improved gross profit margins. These developments reflect a positive market reaction to Pure Storage’s financial results and strategic outlook.

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