Calling Pure Storage's potential under-appreciated, the brokerage upgraded the stock from Perform to an Outperform rating and attached a price target of $15 on the company's stock. The lead analyst liked the company's all-flash technology and positioning.
Aside from that, Oppenheimer is positive on execution in addition to the potential for growth inside the big enterprise/cloud storage space.
"Our thesis is largely unchanged. We're bullish on Pure's progress toward CF break-even and profitability, and its ability to capitalize on differentiated technology, AFA growth, and on expansion opportunities with new products (especially FlashBlade), new customers, and internationally," the brokerage said in the research note to clients.
The lead analyst is not worried about concerns raised regarding the drop in gross margin, as he believes recovery and expansion are possible within two or three quarters. The analyst cited FlashBlade production as a catalyst that could double the addressable market over the long term.
The brokerage elaborated that FlashBlade deployments would be key to the increasing needs of unstructured data growth compared to FlashArray and would bring in fresh customers and user cases.
At time of writing, the stock was seen up 0.51 percent at $11.75.
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