Evercore ISI maintained an Outperform rating and a $130 price target on Pure Storage Inc. (NYSE: PSTG) following the company’s second-quarter results, which showed accelerating revenue growth and margin expansion.
The stock has climbed 79% over the past year to $108.90, trading at a P/E ratio of 167, according to InvestingPro data. The valuation places the company among the most overvalued stocks tracked by the platform.
Revenue rose 38% year-over-year to $1.186 billion, marking the eighth consecutive quarter of more than 30% growth. Product revenue increased 54%, while subscription revenue grew 20%. Operating profit surged 77% to $230 million, lifting the operating margin to 19.4%, 120 basis points above implied guidance. Free cash flow remained negative at $238 million due to a strategic inventory build.
Enterprise demand strengthened, with deals valued at $5 million or more up 59% year-over-year and deals of $20 million or more rising 385%. The total contract value for Evergreen//One, the company’s subscription service, increased 121% to $277 million. Remaining performance obligations grew 44% to more than $4 billion.
Pure Storage raised its fiscal 2027 revenue guidance to a range of $5.03 billion to $5.07 billion, up from $4.41 billion to $4.51 billion, and its full-year revenue outlook to between $5.0 billion and $5.7 billion. EBIT guidance was also increased to $940 million to $960 million from $820 million to $860 million. Management cited improved supply visibility and resilient customer demand after the first full quarter at higher prices as key drivers behind the upward revisions.
