4 Reasons To Store Some Pure Storage In Your Portfolio

Analysts at JMP Securities maintain a Market Outperform rating on Pure Storage Inc PSTG with an unchanged $16 price target in reaction to the company's "strong" earnings report and encouraging guidance.

Q1 In Review

According to JMP's John Lucia, Pure Storage's $0.14 per share loss in the fiscal first quarter was better than the $0.21 per share loss he was expecting while revenue of $183 million also came in above expectations of $177 million.

Lucia added that the company's fiscal second quarter outlook implies an earnings per share of ($0.15), which is one cent better than he had modeled. Also, revenue of $214 million–$222 million is mostly above his $216 million estimate and matches the consensus estimate of $214 on the low end of the range.

4 Reasons To Be Buyers

Lucia continued with four reasons why investors should consider buying the stock, which another analyst previously described as being "toast."

First, Pure Storage's beat and raise report confirms a strong sales execution and "significantly" improves the likelihood of hitting its fiscal 2018 goals of $1 billion in revenue.

Second, Pure Storage's operating margins expanded by around 1,300 basis points on a year-over-year basis which highlights the increasing leverage in the model.

Third, management addressed a growing concern among shareholders in terms of FlashBlade momentum. The analyst noted that it is on pace to reach its goal of $80 million-plus in revenue in fiscal 2018.

Finally, management said that its win rates improved versus its biggest competitors, which confirms its differentiated product offering.

At time of publication, shares of Pure Storage were up 9.47 percent at $11.85.