Is It Smart to Store Your Money in Pure Storage Stock This Winter?

NYSE: PSTG | Pure Storage, Inc.  News, Ratings, and Charts

PSTG – Data storage solutions provider Pure Storage (PSTG) delivered strong financial results in the third quarter, with strong revenue growth and increasing operating profits. PSTG’s innovative portfolio and unique Flash-optimized technology position the company to witness sustained growth in the upcoming quarters. However, is it wise to invest in this data storage stock amid uncertain macroeconomic conditions? Read on….

IT pioneer Pure Storage, Inc. (PSTG) is known for delivering the world’s most advanced data storage technology and services. Charles Giancarlo, PSTG’s Chairman, and CEO said, “An ever growing number of customers around the world trust Pure to provide the most advanced, reliable, and energy-efficient technology to satisfy their mission-critical data storage and management needs.”

“With the power of our unique Flash-optimized technology and differentiated business model, we look forward to managing increasingly more of their data storage requirements,” Charles added.

Last week, the company announced the continued growth of its subscription service offerings, including its Evergreen® portfolio, in addition to a new energy efficiency service level agreement (SLA) for Evergreen//One™. The new SLA represents an industry-first energy efficiency guarantee in the enterprise storage as a service market and supports PSTG’s sustainability goals.

Also, on October 26, 2022, PSTG introduced a new fully managed service for Portworx® Enterprise to bring a Kubernetes-ready data plane to every developer that works on containerized applications. The full suite of Portworx offerings can now be consumed as a fully managed service by users of Amazon EKS, RedHat OpenShift, and any other Kubernetes services.

For the third quarter of fiscal 2023, PSTG’s Subscription Annual Recurring Revenue (ARR), supported by the Evergreen portfolio, Pure Cloud Block Store, and Portworx, reached $1 billion for the first time, up 30% year-over-year. Its Remaining Performance Obligations (RPO) were $1.60 billion, up 26% year-over-year.

Furthermore, the company raised its fiscal year 2023 non-GAAP operating income guidance. For the fiscal 2023 fourth quarter, the company’s non-GAAP operating income is expected to be approximately $130 million. For the full year, operating income is projected to arrive at nearly $430 million.

Shares of PSTG have gained 2.9% over the past month to $27.05. Moreover, Wall Street analysts expect the stock to hit $40.33 in the next 12 months, indicating a 49.1% upside potential.

Here is what could shape PSTG’s performance in the near term:

Solid Financials

In its fiscal 2023 third quarter ended November 6, 2022, PSTG’s total revenue of $676.05 million increased 20.1% year-over-year, with its Subscription Services revenue at $244.77 million, up 30.3% year-over-year. Its gross profit grew 24.4% from the year-ago value to $466.34 million. Cash inflows from operating activities came in at $154.70 million, up 21.8% year-over-year.

Furthermore, PSTG’s non-GAAP operating income was $107.20 million, up 54.4% year-over-year. Its non-GAAP net income rose 47.2% from the prior-year period to $98.09 million, while its non-GAAP net income per share stood at $0.31, up 40.9% year-over-year.

Favorable Analyst Estimates

Analysts expect PSTG’s revenue for the fiscal year (ending January 2023) to come in at $2.75 billion, indicating an increase of 26.3% year-over-year. Also, the company’s EPS for the current fiscal year is expected to grow 91.4% from the previous year to $1.27. Moreover, it has surpassed the consensus revenue and EPS estimates in three of the trailing four quarters.

In addition, the consensus revenue estimate of $3.13 billion for the fiscal year (ending represents a 13.6% improvement year-over-year. The consensus EPS estimate of $1.30 for the same year indicates a 2.3% increase year-over-year.

Robust Profitability

PSTG’s trailing-12-month gross profit margin of 68.34% is 38% higher than the industry average of 49.53%, while its trailing-12-month levered FCF margin of 16.13% is 115% higher than the industry average of 7.50%. Likewise, the stock’s trailing-12-month CAPEX/Sales of 4.49% is 78.7% higher than the industry average of 2.51%.

POWR Ratings Reflect Promising Outlook

PSTG has an overall rating of B, which equates to a Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. PSTG has an A grade for Growth, consistent with its robust financials and favorable analyst estimates. Also, the stock has a grade A for Quality, in sync with its higher-than-industry profitability.

PSTG is ranked first in the A-rated Technology-Storage industry.

Beyond what I have stated above, we have also given PSTG grades for Sentiment, Value, Momentum, and Stability. Get access to all PSTG ratings here.

Bottom Line

Data storage solutions provider PSTG had an outstanding third quarter. Furthermore, the company raised its non-GAAP operating income guidance for fiscal 2023.

PSTG’s unique Flash-optimized technology and differentiated business model position it as the trusted provider for organizations. Given solid financials, promising growth prospects, and high profitability, we think investing your money in this stock could be wise this winter.


PSTG shares were unchanged in premarket trading Tuesday. Year-to-date, PSTG has gained 1.08%, versus a 4.29% rise in the benchmark S&P 500 index during the same period.


About the Author: Mangeet Kaur Bouns


Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
PSTGGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Inflation Not Fading Fast Enough for Stock Investors

Investors may have celebrated the end of high inflation too soon. The CPI report shows inflation bouncing higher and thus pushing back the start date for Fed rate cuts. This has the S&P 500 (SPY) coming off recent highs. This begs questions like how much more downside could we see? And when will the bull market get back on track? 44 year investment veteran Steve Reitmeister shares his answers to these questions in this timely commentary including a preview of his top picks to stay ahead of the pack. Read on below for more...

3 Auto Stocks to Consider Over TSLA in April

Tesla (TSLA) reported a decline in deliveries in the first quarter, and Wall Street expects the company to deliver fewer vehicles than last year. Furthermore, rising competition, slowing EV sales, and stretched valuation make TSLA unattractive from an investment standpoint. Considering these factors, investors could consider buying fundamentally strong auto stocks Blue Bird (BLBD), Rolls-Royce Holdings (RYCEY), and Stellantis (STLA) over Tesla (TSLA). Read more...

3 Top-Rated Tech Stock Buys for Value in April

The technology sector is undergoing a notable surge, propelled by increasing digitalization endeavors among businesses and governmental support for technological progress. So, fundamentally sound tech stocks Box Inc. (BOX), Teradata (TDC), and Materialise (MTLS), which seem pretty undervalued, might be ideal buys this month. Continue reading...

Top Software Stocks at the Forefront of Market Gains

The software industry's prospects appear bright due to increasing investments in digital transformation, high demand for advanced software services from various sectors, and the integration of emerging technologies such as generative AI. Therefore, investors could consider buying quality software stocks Autodesk (ADSK), DocuSign (DOCU), and Pegasystems (PEGA) for solid gains. Read more...

Updated 2024 Stock Market Outlook

The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past...the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story...

Read More Stories

More Pure Storage, Inc. (PSTG) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All PSTG News