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
Be a smarter, better informed investor.
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
-
S&P 500 Slips Ahead of Fed Week: Stock Market TodayAll eyes are on the Federal Reserve ahead of next week's critical policy meeting.
-
September Fed Meeting: Live Updates and CommentaryThe September Fed meeting is a key economic event, with Wall Street keyed into what Fed Chair Powell & Co. will do about interest rates.
-
I'm an Investment Strategist: This Is How the Fed's Next Rate Move Could Impact Your WalletInterest rate cuts might be coming, which could affect everything from your credit card debt to your mortgage. It's smart to prepare now — here's how.
-
I'm a Retirement Planner: These Are Three Common Tax Mistakes You Could Be Making With Your InvestmentsDon't pay more tax on your investments than you need to. You can keep more money in your pocket (or for retirement) by avoiding these three common mistakes.
-
Want to Shave 10 Hours Off Your Workweek? A Startup Expert Shows How AI Can HelpArtificial intelligence is overhauling how companies operate, freeing up entrepreneurs and their workers to skip the menial stuff and get down to business.
-
Dow Gains 617 Points as Rate Cuts Near: Stock Market TodayWednesday's economic data didn't shift Wall Street's expectations that the Fed is preparing for a rate cut at next week's meeting.
-
Hot August CPI Report Doesn't Shift the Rate-Cut Needle: What the Experts SayThe August CPI came in higher than forecast on a monthly basis, but Wall Street still expects a rate cut at next week's Fed meeting.
-
Four Clever and Tax-Efficient Ways to Ditch Concentrated Stock Holdings, From a Financial PlannerHolding too much of one company's stock can put your financial future at risk. Here are four ways you can strategically unwind such positions without triggering a massive tax bill.
