Pure Storage Stock Climbs On Q4 Results, Upbeat Guidance

Pure Storage, Inc. PSTG shares are trading higher Thursday after the company posted better-than-expected fourth-quarter results and issued first-quarter revenue guidance above estimates.

The Details:

The company reported quarterly adjusted earnings of 50 cents, beating the consensus estimate of 44 cents. Quarterly sales clocked in at $789.8 million, above the analyst consensus estimate of $782.31 million. 

Fourth-quarter subscription services revenue came in at $328.9 million, up 24% year-over-year, and fourth-quarter operating margin was 20%.

“We closed FY24 delivering strong RPO growth, and exceeded our revenue and operating margin guidance in Q4,” said Kevan Krysler, CFO of Pure Storage.

“Looking to FY25, we expect double-digit revenue growth and strong growth of RPO, fueled by our highly differentiated data storage platform, and strength of our Evergreen and Portworx consumption and subscription offerings,” Krysler added. 

Pure Storage expects revenue of $680 million in the first quarter, versus the estimate of $667.299 million. 

The audit committee approved expanded share repurchases of up to an additional $250 million under its stock repurchase program, in addition to the $145 million remaining under the existing program authorization.

Several analysts raised price targets on the stock following the earnings results:

• JP Morgan analyst Pinjalim Bora maintained an Overweight rating and raised the price target from $45 to $50.
• Barclays analyst Tim Long maintained Pure Storage with an Overweight and raised the price target from $42 to $51.
• UBS analyst David Vogt maintained Neutral on the company and raised the price target from $38 to $44.
• B of A Securities maintained its Neutral rating and raised its price target from $42 to $50.

Related News: Okta Stock Rises On Better-Than-Expected Q4 Results: EPS Beat, Revenue Beat, Upbeat Guidance

PSTG Stock Forecast In 2030:

Predicting the future in stock prices over long periods of time is challenging. Wall Street analysts use complex models that take into account interest rates, economic growth, competitive advantages, management teams and historical profitability, among a host of other factors.

If, as an investor, you want to assume most of the major factors remain stable, you can use trend analysis as a helpful tool. Using a longer term trend line or historical performance of the stock, you can aim to forecast a stock's annual rate of return.

For Pure Storage, over the past 5 years, it's annualized stock performance is 15.87%, and if you assume that trend continues for another 5 years, you can expect a stock to trade at $106.94.

Using a trend line (see how to perform this function here), If you choose to use a trend line, connect your two points and look into the future to the point in time in which you're curious. Once you've identified that stock price, you may want to consider what type of conditions would need to exist for the stock to justify the share price – be it an outside influence or managerial decision making.

PSTG Price Action: According to Benzinga Pro, Pure Storage shares are up 22.2% at $51.46 at the time of publication.

Image: Pete Linforth from Pixabay