Pure Storage is the IBD Stock Of The Day, as the data storage and enterprise networking company approaches a buy point.
The company makes high-speed storage systems for businesses and cloud computing using all-flash-chip technology. PSTG stock has formed a cup-with-handle base with a buy point of 31.62.
During a rough day in the market fueled by inflation concerns, PSTG stock fell 3.8% to close at 29.64 on the stock market today.
The company reported fiscal second-quarter results on Aug. 31 that topped estimates.
Revenue jumped 30% from the year-ago period to $646.8 million. Subscription services revenue grew 35% to $232.2 million. It posted adjusted earnings of 32 cents a share, up 128%.
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Pure Storage raised its fiscal year 2023 revenue guidance to $2.75 billion, up 26% and above expectations of $2.6 billion.
PSTG Stock: Expanding Portfolio Of Products, Services
"Pure saw continued growth and solid market share gains as our expanding portfolio of industry leading products and services are recognized and embraced by more and more enterprises around the world," Chief Executive Charles Giancarlo said in written remarks with the Pure Storage earnings release.
The company guided for third-quarter revenue of $670 million, ahead of analyst estimates by 3%.
"Management commented that they did see some caution at large enterprises with sales cycles elongating," Goldman Sachs analyst Rod Hall wrote in a recent research note to clients. "However, the company expressed confidence on their pipeline and visibility."
Pure Storage added 350 new customers in the quarter and said more than half of Fortune 500 companies are Pure Storage customers
Pure noted that their new and recently launched FlashBlade//S product accounted for 20% of all FlashBlade orders in the quarter.
Strong Traction With New Product
"We believe this indicates significant traction for the new product right out of the gate with momentum likely to improve in our opinion," Hall wrote. He has a buy rating on PSTG stock and price target of 44.
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, PSTG stock has an IBD Composite Rating of 93 out of 99. IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
Its Relative Strength Rating is 89. IBD's unique RS Rating tracks technical performance by showing how price action for issues such Pure Storage over the last 52 weeks measures up against that of the other stocks in IBD's database.
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Pure Storage is currently on the SwingTrader list of companies. In addition, PSTG stock is on the IBD 50 list of top performing stocks.
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