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1. Company Snapshot

1.a. Company Description

Pure Storage, Inc.provides data storage technologies, products, and services in the United States and internationally.The company's Purity software is shared across its products and provides enterprise-class data services, such as data reduction, data protection, and encryption, as well as storage protocols, including block, file, and object.


Its products portfolio includes FlashArray for block-oriented storage, addressing databases, applications, virtual machines, and other traditional workloads; FlashArray//XL; and FlashArray//C, an all-QLC flash array.The company also provides FlashBlade, a solution for unstructured data workloads of various types; FlashStack that combines compute, network, and storage to provide an infrastructure platform; FlashRecover, an all-flash modern data-protection solution; and AIRI, a full-stack AI-ready infrastructure.In addition, it offers evergreen storage subscription, Pure as-a-Service, and Cloud Block Store, as well as Portworx a cloud-native Kubernetes data management solution It also offers technical and professional, training and education, and certification services.


The company sells its products and subscription services through direct sales force and channel partners.The company was formerly known as OS76, Inc.and changed its name to Pure Storage, Inc.


in January 2010.Pure Storage, Inc.was incorporated in 2009 and is headquartered in Mountain View, California.

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1.b. Last Insights on PSTG

Breaking News: Pure Storage Inc. reported Q3 results with 16% year-over-year revenue growth and 17% ARR growth. The company delivered expanding gross margins, signaling robust near-term fundamentals. Management commented on potential changes to sales economics with AI hyperscalers, which may impact margins. Despite strong results, the stock was upgraded to "Buy" by analysts, citing accelerating AI-driven demand. The company's full-year outlook was raised. Analysts revised their forecasts after the Q3 results, which were largely in-line with expectations. A "Buy" recommendation was given by some analysts.

1.c. Company Highlights

2. Pure Storage's Q3 Fiscal 2026 Earnings: A Strong Performance

Pure Storage reported a robust Q3 fiscal 2026, with revenue reaching $964 million, up 16% year-over-year, and operating profit of $196 million, up 17% year-over-year. The company's product revenue stood at $534 million, an 18% year-over-year increase, while subscription services revenue was $430 million, a 14% year-over-year growth. Earnings per share (EPS) came in at $0.58, in line with analyst estimates. Gross margin expanded to 74.1%, with subscription services gross margin at 75.5% and product gross margin at 72.9%. The company generated $53 million in free cash flow and returned $53 million to shareholders through share repurchases.

Publication Date: Dec -04

📋 Highlights
  • Revenue & Profit Growth:: Q3 FY2026 revenue rose 16% YoY to $964M, with operating profit up 17% to $196M, driven by enterprise and hyperscaler demand.
  • Hyperscaler Momentum:: Shipments surpassed 2 exabytes (exceeding annual forecast) and 90%+ gross margin from software licensing, with Q4 shipments expected to climb further.
  • Revenue Composition:: Product revenue grew 18% to $534M, while subscription services rose 14% to $430M, boosting ARR to $1.8B (+17%) and RPO to $2.9B (+24%).
  • Gross Margin Strength:: Overall margin hit 74.1% (Q4 FY2025: 71.3%), with subscription services at 75.5%, supporting 20.3% operating profit margin.

Revenue Growth and ARR Expansion

The company's revenue growth was driven by strength across its portfolio, particularly in enterprise and hyperscaler businesses. Annual recurring revenue (ARR) grew 17% to $1.8 billion, while total remaining performance obligations (RPO) increased 24% to $2.9 billion. Hyperscaler shipments exceeded the annual forecast of 2 exabytes, with the company expecting to ship more in Q4.

Guidance and Operating Profit

For Q4, Pure Storage expects revenue of $1.02-$1.04 billion, representing approximately 17% year-over-year growth, and operating profit of $220-$230 million, representing approximately 47% year-over-year growth. For fiscal year 2026, the company expects revenue of $3.63-$3.64 billion, representing 14.7% year-over-year growth, and operating profit of $629-$639 million, representing approximately 13.3% year-over-year growth.

Valuation Metrics

With a P/E Ratio of 162.04 and an EV/EBITDA of 69.62, the market appears to be pricing in significant growth expectations. The company's ROE stands at 10.55%, indicating a reasonable return on equity. Analysts estimate next year's revenue growth at 14.7%, which is in line with the company's guidance.

Business Outlook and Strategic Investments

Pure Storage plans to make significant incremental investments in R&D and sales and marketing to sustain momentum and capture additional growth opportunities. The company is exploring new revenue models with hyperscalers, which may impact gross margin economics in fiscal year 2027. Management remains committed to increasing operating profit on a year-over-year basis.

3. NewsRoom

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Pure Storage, Inc. (PSTG) Presents at UBS Global Technology and AI Conference 2025 Transcript

Dec -04

Source: seekingalpha.com

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Signal Says Pure Storage Stock Could Bounce by January

Dec -04

Source: schaeffersresearch.com

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Breakfast News: SNOW's Growth Outlook Cools

Dec -04

Source: fool.com

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Pure Storage (NYSE:PSTG) Stock Price Down 27.2% After Analyst Downgrade

Dec -04

Source: defenseworld.net

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Pure Storage Stock Slips Despite Positive Q3 Results

Dec -03

Source: feeds.benzinga.com

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Pure Storage Faces Heavy Sell-Off. Why Markets Turned Brutal After Earnings?

Dec -03

Source: gurufocus.com

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Why Pure Storage Stock Took a Dirty Dive Today

Dec -03

Source: fool.com

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Pure Storage Faces Challenges Despite Strong Demand and AI Growth

Dec -03

Source: gurufocus.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.71%)

6. Segments

Data Storage Product

Expected Growth: 8%

Pure Storage's 8% growth in Data Storage Products is driven by increasing demand for flash-based storage, adoption of cloud-based infrastructure, and growing need for data analytics and AI workloads. Additionally, the company's focus on innovation, customer satisfaction, and strategic partnerships contribute to its market share expansion.

Subscription Services

Expected Growth: 12%

Pure Storage's subscription services growth is driven by increasing demand for cloud-based data storage, adoption of 'as-a-service' models, and growing need for data management and analytics. Additionally, the company's focus on innovation, customer satisfaction, and strategic partnerships contribute to its 12% growth rate.

7. Detailed Products

FlashArray

All-flash storage array designed for high-performance and low-latency applications

FlashBlade

Scale-out, all-flash storage system for unstructured data

Portworx

Kubernetes-native storage and data management platform

Pure1

Cloud-based management and monitoring platform

Purity

Operating system for FlashArray and FlashBlade

Evergreen Storage

Subscription-based storage service with built-in upgrades and support

8. Pure Storage, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Pure Storage, Inc. faces moderate threat from substitutes due to the presence of alternative storage solutions such as cloud storage and traditional hard disk drives.

Bargaining Power Of Customers

Customers have limited bargaining power due to Pure Storage, Inc.'s strong brand reputation and the complexity of its products, making it difficult for customers to switch to alternative solutions.

Bargaining Power Of Suppliers

Suppliers have moderate bargaining power due to the presence of multiple suppliers of components and the company's dependence on a few key suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry, including significant capital requirements and the need for specialized expertise in the storage industry.

Intensity Of Rivalry

The storage industry is highly competitive, with several established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 10.49%
Debt Cost 4.06%
Equity Weight 89.51%
Equity Cost 9.67%
WACC 9.08%
Leverage 11.72%

11. Quality Control: Pure Storage, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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InterDigital

A-Score: 6.6/10

Value: 3.0

Growth: 8.8

Quality: 9.0

Yield: 3.0

Momentum: 10.0

Volatility: 6.0

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Gen Digital

A-Score: 5.4/10

Value: 3.5

Growth: 4.6

Quality: 7.0

Yield: 4.0

Momentum: 5.0

Volatility: 8.3

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HP

A-Score: 5.2/10

Value: 8.2

Growth: 3.7

Quality: 4.8

Yield: 7.0

Momentum: 1.5

Volatility: 6.3

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NetApp

A-Score: 5.2/10

Value: 3.4

Growth: 5.8

Quality: 7.2

Yield: 4.0

Momentum: 4.0

Volatility: 7.0

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SAIC

A-Score: 4.8/10

Value: 6.8

Growth: 5.4

Quality: 6.4

Yield: 3.0

Momentum: 0.5

Volatility: 6.7

1-Year Total Return ->

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Pure Storage

A-Score: 4.3/10

Value: 0.2

Growth: 7.8

Quality: 6.2

Yield: 0.0

Momentum: 9.0

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

72.2$

Current Price

72.2$

Potential

-0.00%

Expected Cash-Flows