Pure Storage (PSTG) Receives Strong Buy Rating and Increased Price Target from KeyBanc Analyst

KeyBanc's Thomas Blakey raised their price target on Pure Storage (NYSE: PSTG) by 7.8% from $51 to $55 on 2024/02/29. The analyst maintained their Strong Buy rating on the stock.

In an assessment of Pure Storage's 2024/02/28-dated Q4 and FY 2024 print, Blakey highlighted that noted that the company posted a quarterly beat. According to the analyst, "relatively in-line FY 2025 guidance should be viewed positively because some investors had been anticipating a guide down to FY2025's top line and profit expectations given the accelerated STaaS transition." Blakey also expressed optimism about Pure Storage's potential to capitalize on several long-term growth prospects, including STaaS (Storage as a Service), the trend toward replacing HDDs (Hard Disk Drives), and the move toward unifying AI data across hybrid storage.

Pure Storage reported strong financial results for Q4 2024. The company's earnings per share (EPS) of $0.50 beat the Zacks Consensus Estimate of $0.45, although it fell 5.7% short of Q4 2023's $0.53. Revenue for the quarter came in at $789.81 million, surpassing the Zacks Consensus Estimate by 0.97%, but falling 3% short of Q4 2023's $810.21 million. The company reported an operating income of $157.8 million and an operating margin of 20%.

For FY 2024, Pure Storage achieved revenue of $2.8 billion, representing a 3% year-over-year increase. The company reported an operating income of $458.4 million and an operating margin of 16.2%. Looking ahead, management provided guidance for Q1 2025, including revenue of $680 million, revenue growth of 15.4%, operating income of $68 million, and an operating margin of 10%. For FY 2025, Pure Storage expects revenue of $3.1 billion, revenue growth of 10.5%, operating income of $532 million, and an operating margin of 17%.

Pure Storage's Chairman & CEO, Charles Giancarlo, expressed confidence in the company's data platform strategy, stating that it is revolutionizing the storage industry. He emphasized the platform's ability to unify fragmented data environments into a seamless, modern, and efficient system, specifically designed for artificial intelligence. CFO Kevan Krysler highlighted the company's strong performance in FY24 and expressed expectations for double-digit revenue growth in FY25, fueled by the company's differentiated data storage platform and the strength of its Evergreen and Portworx consumption and subscription offerings.

Several other analysts also updated their ratings and price targets for Pure Storage on 2024/02/29. Stifel Nicolaus's Matthew Sheerin raised their price target by 12.2% from $41 to $46, while maintaining a Hold rating on the stock. Bank of America's Wamsi Mohan raised their price target by 19% from $42 to $50, also maintaining a Hold rating. UBS's David Vogt raised their price target by 15.8% from $38 to $44, and like the others, maintained a Hold rating on the stock.

Currently, 70% of top-rated analysts rate PSTG as a Strong Buy or Buy, while 30% see it as a Hold. No analysts recommend or strongly recommend selling the stock.

Since Pure Storage's latest quarterly report on 2024/02/28, the stock price has seen significant growth, increasing by 32.3%. Year-over-year, the stock is up 127.8%, outpacing the S&P 500, which has risen by 26.7% during the same period.

KeyBanc analyst Thomas Blakey is highly regarded by WallStreetZen, ranking in the top 12% out of 4,485 Wall Street analysts. With an average return of 8.8% and a win rate of 59.8%, Blakey specializes in the Technology and Communication Services sectors.

Pure Storage, Inc. is a leading provider of capacity storage, NVME storage, entry-level storage, and file and object storage products. The company's offerings, such as FlashArray and FlashBlade, are used by cloud-based software and service providers, as well as in various industries, including consumer web, education, energy, financial services, government, healthcare, manufacturing, media, retail, and telecommunications. Pure Storage, founded in 2009 and headquartered in Mountain View, CA, also offers data storage management and data storage software.

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