KeyBanc: 3 Takeaways From Meeting With Pure Storage Execs

The three main takeaways from a meeting with Pure Storage Inc PSTG management are that the company’s competitive positioning remains strong in international regions; the Brexit extension offers the opportunity for deferred IT projects; and Cloud Data Services is becoming key to strategic accounts, according to KeyBanc Capital Markets.

The Analyst

Alex Kurtz maintains an Overweight rating on Pure Storage with an unchanged $30 price target.

The Thesis

International customers have become an important driver of Pure Storage’s revenue, Kurtz said in a Sunday note.

While the company’s total revenues grew 24 percent year-on-year in the prior quarter, international revenue grew 50 percent, the analyst said. 

Pure Storage’s international positioning is backed by a continued focus on total cost of ownership and non-volatile memory express advantages, Kurtz said. NVMe configurations now represent more than 80 percent of capacity shipped and “offer compelling price/performance vs. incumbent providers in large deal flow,” he said. 

James Petter, Pure Storage's vice president of international sales and operations, said a Brexit extension could be positive for IT demand in the U.K.

This is because U.K. customers have held back strategic projects due to the risks associated with a hard Brexit, Kurtz said. 

Pure Storage has made a foray into cloud-enabled products, with CloudSnap, which allows backups to be stored directly to the cloud; ObjectEngine, which offers a faster way to create backups and restore data; and Cloud Block Store, which could have the greatest impact on the company’s longer-term cloud-based positioning, according to KeyBanc. 

Price Action

Pure Storage shares were trading down 0.26 percent at $22.86 at the time of publication Monday. 

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