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Pure Storage shares are down 5% year-to-date, but have risen nearly 50% in the past 12 months.
Courtesy of Pure Storage
Pure storage
Shares were trading sharply higher on Tuesday after Deutsche Bank analyst Sidney Ho upgraded its rating on the flash memory-based enterprise storage systems company to buy from Hold while repeating its target price $ 27.
Ho wrote that the stock has gotten too cheap after a recent pullback, dropping 12% year-to-date through Monday’s close. He considers the sale of Pure Storage shares (ticker: PSTG) to be unwarranted and noted that the slide compares to an average 15% year-to-date gain for other hardware companies. For example,
Western digital
(WDC) and
HP Inc.
(HPQ) have increased by 26% and 23% respectively since the start of the year.
“In addition to the assessment, our checks suggest positive dynamics for both Pure and the overall storage environment, as pent-up demand remains from the 2020 schedule,” he wrote. “In the longer term, we believe that Pure will remain a technology leader in the enterprise storage space and that it still has a lot of leads… which we believe should take into account. [market] share gains and double-digit revenue growth over the next two years. “
Ho went on to write that “there seems to be real traction in the market for [the company’s] subscription-based storage model, which should be a long-term success for Pure and the enterprise storage industry.
Pure Storage posted better-than-expected results for its fiscal fourth quarter ended February 2. For its quarter, Pure posted revenue of $ 502.7 million, up 2.2% from a year earlier and ahead of Wall Street analyst consensus forecast of $ 480 million. of dollars. Non-GAAP earnings were 23 cents a share, well above Street’s consensus of 9 cents.
The company has also resumed providing forward-looking guidance after suspending the practice throughout 2020 due to an uncertain link to the Covid-19 pandemic. The company forecasted revenue of $ 1.9 billion for fiscal 2022.
Following the results report, CEO Charlie Giancarlo said Barron’s the company expects a recovery from the July quarter when the economy reopens and IT spending is expected to increase.
Pure Storage shares on Tuesday jumped more than 10% to $ 21.37.
Write to Eric J. Savitz at [email protected]
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