Technology Stocks

Pure Storage Inc (NYSE:PSTG) Q3 Performance And Outlook

Pure Storage Inc (NYSE:PSTG) announced its financials for Q3 2018 on November 19 revealing an impressive performance.

The flash storage managed to earn $372.8 million in revenue during the quarter, which was 34% more than the revenue it reported in the same quarter in 2017. The company’s revenue also managed to outdo its own revenue guidance. Pure Storage’s GAAP gross margin for this year’s Q3 was 66.8% while the non-GAAP was 68.1% which a new high.

“Pure delivered another excellent quarter, and today we’re announcing the extension of Pure’s data-centric architecture to the cloud,” stated Pure Storage CEO, Charles Giancarlo.

The CEO also pointed out that the company’s new could data services will bring a new storage software to the market through joint efforts with Amazon Web Services (AWS). Tim Riitters, the Chief Financial Officer at Pure Storage stated that the company had a strong performance in Q3 and that margins and revenue outweighed the expectations. He also added that the firm is excited about future opportunities now that the fiscal year is coming to an end.

2019 outlook

The strong Q3 performance has encouraged Pure Storage to raise its guidance for the upcoming year. The move is aimed at matching the company’s current momentum. The revised guidance plus the already impressive performance might be a good sign for investors that have been planning to invest in Pure Storage shares.

Pure Storage expects its fourth quarter FY19 revenue to be between $438 million and $446 million and it expects its non-GAAP gross margin to range from 64.5% to 67.5%. As for the entire fiscal year 2019 guidance, Pure Storage expects its revenue to be between $1.376 billion and $1.384 billion. The company also anticipates 66.6% to 67.6% non-GAAP gross margin and 3.9% to 5.3% non-GAAP operating margin.

Stock performance

Pure Storage stock closed Thursday’s trading session at $15.02 and has been bullish for the past one week. The stock’s current 52-week high is $29.14 while its 52-week low is $14.92 which means that the current price performance is on the low side.

This might be a good time to purchase the stock when its price is low especially if the performance is expected to improve and the same is expected for the stock price. However, the stock may still continue to lose value due to various factors such as negative market conditions. So it is not a guarantee that the price will go up but the probability of it going up is higher.

Some analysts believe that Pure Storage’s stock is currently overvalued and that its intrinsic value should be around $11.57. However, the stock is quite volatile and there is a chance that the price might go down.

As far analyst opinions are concerned, there is a rather bullish outlook on Pure Storage stock. About 15 analysts have a “buy” recommendation on the stock. Meanwhile, Wall Street analysts have set a $25.95 price target for Pure Storage stock. The company reported its EPS at $0.13 in its latest quarterly earnings report, revealing that it managed to surpass the $0.09 expected EPS. Its revenue for the quarter was $367.36 million which was 18.93% higher than the revenue figure reported in the previous quarter.

About Pure Storage

Pure storage is a California-based company that makes flash storage products as well as software solutions. It has a wide range of products such as NVME storage, data storage software and block storage among many others. Some of its services include cloud-based management, storage management, cloud backup, data security, and data replication among others. The firm’s goal is to simplify the hybrid cloud journey for its clients.

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