Why Pure Storage Stock Is Sailing Higher After Earnings
Pure Storage stock is surging after the data storage firm beat earnings expectations and announced a deal with a major technology company.
Pure Storage (PSTG) stock is surging in Wednesday's session after the advanced data storage company beat top- and bottom-line expectations for its fiscal 2025 third quarter and announced it had been awarded a design win from a "top-four hyperscaler."
In the quarter ended November 3, Pure Storage's revenue increased 8.9% year over year to $831.1 million. Its earnings per share (EPS) remained unchanged from the year-ago period at 50 cents.
The results beat analysts' expectations. Wall Street was anticipating revenue of $815 million and earnings of 41 cents per share, according to Investor's Business Daily.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"Pure Storage has achieved another industry first in our journey of data storage innovation with a transformational design win for our DirectFlash technology in a top-four hyperscaler," said Pure Storage CEO Charles Giancarlo in a statement. "This win is the vanguard for Pure Flash technology to become the standard for all hyperscaler online storage, providing unparalleled performance and scalability while also reducing operating costs and power consumption."
The company anticipates test runs for the major tech firm to start in early 2025 and is targeting "large full production deployments, on the order of double-digit Exabytes" by calendar year 2026, Giancarlo said on the company's earnings call in regard to the design win. This corresponds to Pure Storage's fiscal 2027.
As a result of its strong financial performance in the first nine months of its current fiscal year, Pure Storage raised its full-year outlook. The company now anticipates revenue of approximately $3.15 billion and operating income of roughly $540 million.
This is up from its previous forecast for revenue of approximately $3.1 billion and operating income of about $532 million.
Is Pure Storage stock a buy, sell or hold?
Pure Storage was already doing well on the price charts heading into Wednesday's trading. Indeed, the tech stock was up 50% through the year to date through the December 3 close vs the S&P 500's 28.5% total return (price change plus dividends).
Unsurprisingly, Wall Street is bullish on the large-cap stock. According to S&P Global Market Intelligence, the average analyst target price for PSTG is $70.62, representing implied upside of nearly 7% to current levels. Additionally, the consensus recommendation is a Buy.
Financial services firm Needham is one of those with a Buy rating and a fresh $75 price target on PSTG stock, up from its previous target of $62.
"We expect Pure Storage to gain share from competing storage vendors on the strength of its expanding product portfolio and innovative product roadmap – both of which are underpinned by Pure Storage's Purity software," says Needham analyst Mike Cikos.
The analyst thinks PSTG'S Evergreen subscriptions are "a direct reflection of its software-based offering and its disruptive approach to the Storage market. Furthermore, growing Evergreen subscriptions are expected to benefit the economic model through improved customer lifetime value."
Related Content
-
The Top 10 Side Gigs For Retirees In 2026Money is freedom in retirement; here’s how to earn more of it with a profitable side gig
-
3 Retirement Changes to Watch in 2026: Tax EditionRetirement Taxes Between the Social Security "senior bonus" phaseout and changes to Roth tax rules, your 2026 retirement plan may need an update. Here's what to know.
-
The 'Yes, And...' Rule for RetirementRetirement rarely follows the script. That’s why the best retirees learn to improvise.
-
What Not to Do After Inheriting Wealth: 4 Mistakes That Could Cost You EverythingGen X and Millennials are expected to receive trillions of dollars in inheritance. Unless it's managed properly, the money could slip through their fingers.
-
'The Money Prism' Solves Retirement Money's Biggest Headache: Here's HowThis simple, three-zone system (Blue for bills, Green for paycheck, Red for growth) helps you organize your retirement savings by purpose and time.
-
No, AI Can't Plan Your Retirement: This (Human) Investment Adviser Explains WhyAI has infinite uses. But creating an accurate retirement strategy based on your unique goals is one place where its possibilities seem lacking.
-
A Value Focus Clips Returns for This Mairs & Power Growth FundRough years for UnitedHealth and Fiserv have weighed on returns for one of our favorite mutual funds.
-
Small-Cap Stocks Gain Momentum. That's Good News for This iShares ETFThe clouds appear to be parting for small-cap stocks, which bodes well for one of our favorite exchange-traded funds.
-
Don't Let a 60/40 Portfolio Derail Your Retirement: Why a Cookie-Cutter Approach Could Cost YouChoosing a personalized retirement investment plan, rather than relying on the 60/40 portfolio, could help protect your savings and ensure long-term growth.
-
Are You Winging Your Retirement Plan? A Wealth Adviser's Tips to Help Build Wealth and Navigate RiskIf you have no strategy tying together your accounts or haven't modeled scenarios to make sure your savings will last, then your plan is probably inefficient.
-
Divide and Conquer: Your Annual Financial Plan Made Easy, Courtesy of a Financial AdviserOverwhelmed by your financial to-do list? Split it into four quarters and assign each one goals that connect to the time of year. It could be life-changing.
