Pure Storage is the IBD Stock Of The Day, as the data storage and enterprise networking company is a leader in its market. PSTG stock is near a buy point.
The Mountain View, Calif.-based company makes high-speed storage systems for businesses and cloud-computing services using all-flash chip technology.
Pure Storage is a beneficiary of the billions of dollars that Facebook owner Meta Platforms is spending to build the metaverse.
Further, PSTG stock is on the IBD Leaderboard list of top-performing companies.
PSTG Stock Approaches Buy Point
On the stock market today, PSTG stock rose 2.3% to close at 30.50. The stock is consolidating within a much larger base, with a buy point of 31.62, according to IBD MarketSmith charts.
The company's relative strength line, which compares a stock's performance with that of the S&P 500, is at its highest level in seven months.
Pure Storage Revenue Jumped 30%
Two months ago, the company reported better-than-expected results for its fiscal second quarter ended Aug.7.
Its revenue jumped 30% from the year-earlier period to $646.8 million. Subscription services revenue grew 35% to $232.2 million. And it posted adjusted earnings of 32 cents a share, up 128%.
The company guided for third-quarter revenue of $670 million, ahead of analyst estimates by 3% and up 19% from the year-earlier period. For its fiscal year 2023 it expects revenue of $2.75 billion, topping views for $2.6 billion.
"Our portfolio continues to be strong despite a turbulent macro environment," Chief Financial Officer Kevan Krysler said during the company's second-quarter earnings conference call. "Our U.S. business continues to deliver strong revenue growth."
Its products, such as Pure Fusion, enable customers and cloud service providers to implement a cloud operating model for data storage management and offerings.
Driving Data Storage Management
"Pure Fusion is yet another example of how Pure continues to drive the data storage and management industry forward," said Chief Executive Charlie Giancarlo in the earnings call.
"We added more than 350 new customers this past quarter," Giancarlo said. "In addition to sustained growth of new customers in enterprise and commercial segments, we also saw very strong interest from public sector customers this quarter."
Pure Storage says it has 10,500 customers worldwide, including 56% of the Fortune 500 companies.
PSTG Stock Initial Public Offering
Founded in 2009, Pure Storage held its initial public offering in October 2015. PSTG stock priced at 17 and raised $425 million.
According to IBD Stock Checkup, Pure Storage ranks first out of 10 stocks in IBD's Computer-Data Storage industry group. PSTG stock has an IBD Composite Rating of 93 out of 99. But the data storage group ranks a lowly No. 194 out of 197 industry groups that IBD tracks.
Its Relative Strength Rating is 89 out of 99. IBD's RS Rating tracks technical performance by showing how a stock's price action measures up against all other stocks in IBD's database over the last 52 weeks.
If you're new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines. IBD offers a broad range of growth stock lists, such as Leaderboard and SwingTrader.
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