Microvast Holdings announces departure of chief financial officer
On Thursday, BofA Securities analyst Wamsi Mohan updated the firm’s outlook on Pure Storage (NYSE:PSTG), increasing the price target to $76.00 from the previous $73.00. The adjustment follows Pure Storage’s financial performance, which surpassed revenue and earnings per share (EPS) expectations. With a market capitalization of $18 billion and revenue growth of 11.92%, InvestingPro analysis suggests the stock is currently overvalued at $55.14. However, the company’s operating margins (OM) continue to face challenges, marking the lowest level in two years.
Pure Storage reported a first-quarter fiscal year 2026 operating margin of 10.6%, slightly above the guidance but still the weakest in eight quarters. This follows a period of disappointing product gross margins in the fourth quarter of fiscal year 2025. Despite these challenges, Pure Storage saw a quarter-over-quarter rebound in gross margins for the first quarter of fiscal year 2026, with product gross margins improving by 110 basis points and service gross margins remaining stable. According to InvestingPro data, the company maintains a robust gross profit margin of 69.84% and holds more cash than debt on its balance sheet, demonstrating financial stability despite margin pressures.
Looking ahead, the company’s guidance for the second quarter of fiscal year 2026 anticipates operating margins of 14.8%, which is 90 basis points below the Street’s expectations of 15.7%. The full year 2026 revenue and operating margin guidance remains unchanged, despite the first-quarter beat and a slightly more optimistic revenue outlook for the second quarter, reflecting caution due to macroeconomic uncertainties.
Mohan reiterated a Neutral rating on Pure Storage shares, citing that while there are signs of improvement, product growth has yet to accelerate. Additionally, potential deals with large-scale cloud service providers, known as hyperscalers, have not yet had a significant impact on financial estimates. The analyst also noted that ongoing investments and competitive dynamics pose risks to the company’s margins.
In other recent news, Pure Storage reported its Q1 2026 earnings, revealing a revenue of $779 million, which exceeded the forecast of $770.1 million. However, the company’s earnings per share (EPS) fell short, coming in at -$0.04 against the expected $0.25. Despite this EPS miss, the company reaffirmed its FY2026 revenue and operating margin guidance. Pure Storage also experienced a 12% year-over-year revenue growth, with notable strength in subscription services and annual recurring revenue, which increased by 17% and 18%, respectively.
Evercore ISI maintained its Outperform rating on Pure Storage, with a price target of $70, citing the company’s strong performance and growth in the Subscription Services segment. Meanwhile, JPMorgan adjusted its price target for the company to $70, down from $75, while maintaining a Neutral rating due to uncertainties in the second half of the year. The company’s new product, Fusion 2.0, has been well-received, with nearly 100 customers using it to manage data infrastructure. Additionally, Pure Storage’s partnership with Meta (NASDAQ:META) is progressing, with plans to deliver 1-2 exabytes of solutions in the latter half of the year. In a corporate update, CFO Kevan Krysler is set to leave Pure Storage, with the company ensuring a smooth transition.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.