Pure Storage Has A 'Durable Competitive Advantage,' This Bullish Analyst Says

Several Pure Storage Inc PSTG analysts last week bumper their forecasts on upbeat fourth-quarter results.

The Purity operating system, which offers customers a consistent user experience by using a single software layer across the portfolio, provides the company a “durable competitive advantage,” according to Needham's Mike Cikos.

The Pure Storage Analyst: Cikos initiated coverage of Pure Storage with a Buy rating and price target of $66.

The Pure Storage Thesis: The Purity operating system allows the company to reduce the load placed on its direct-to-flash modules (DFMs), Cikos said in the initiation note.

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“The company's solutions require less DRAM versus competitors, and are permitted to take full advantage of the declining cost-curve for NAND,” the analyst stated. “As a result, the company has already discussed a shipment roadmap for 150 TB DFMs, eventually climbing to 600 TB in the coming years — above expected capacity growth from SSD competitors,” he added.

“We view industry-leading SLA agreements across Pure Storage's Evergreen portfolio as a direct result of the company's software investments, as well as a focused approach to driving innovation in the broader Storage market,” Cikos further wrote.

PSTG Price Action: Shares of Pure Storage had risen by 3.62% to $56.90 at the time of publication on Wednesday.

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Posted In: Analyst ColorLong IdeasNewsReiterationTop StoriesAnalyst RatingsMoversTrading IdeasExpert IdeasMike CikosNeedhamStories That Matter
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