NYSE:PSTG

Stock Analysis Report

Executive Summary

Pure Storage, Inc. engages in building a data platform that enables businesses to enhance performance and reduce complexity and costs worldwide.

Snowflake

Adequate balance sheet and overvalued.

Rewards

Trading at 4.5% below its fair value

Revenue is forecast to grow by 21.7% next year

Earnings have grown 2.3% per year over the past 5 years

Risk Analysis

High level of non-cash earnings

Currently unprofitable and not forecast to become profitable over the next 3 years

Highly volatile share price over past 3 months

Current net profit margin (-14.5%) is lower than last year (-14.3%)

+ 1 more risk


Similar Companies

Share Price & News

How has Pure Storage's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PSTG's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

1.1%

PSTG

1.7%

US Tech

0.3%

US Market


1 Year Return

-2.1%

PSTG

32.8%

US Tech

12.5%

US Market

Return vs Industry: PSTG underperformed the US Tech industry which returned 32.8% over the past year.

Return vs Market: PSTG underperformed the US Market which returned 12.5% over the past year.


Shareholder returns

PSTGIndustryMarket
7 Day1.1%1.7%0.3%
30 Day10.5%10.8%4.1%
90 Day43.7%24.9%5.6%
1 Year-2.1%-2.1%35.0%32.8%15.0%12.5%
3 Year29.0%29.0%140.9%121.6%49.1%39.4%
5 Yearn/a126.9%104.1%62.8%44.7%

Price Volatility Vs. Market

How volatile is Pure Storage's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Pure Storage undervalued compared to its fair value and its price relative to the market?

4.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PSTG ($19) is trading below our estimate of fair value ($19.89)

Significantly Below Fair Value: PSTG is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: PSTG is unprofitable, so we can't compare its PE Ratio to the Tech industry average.

PE vs Market: PSTG is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate PSTG's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: PSTG is overvalued based on its PB Ratio (6.6x) compared to the US Tech industry average (1.6x).


Next Steps

Future Growth

How is Pure Storage forecast to perform in the next 1 to 3 years based on estimates from 22 analysts?

33.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PSTG is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: PSTG is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: PSTG is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: PSTG's revenue (17.9% per year) is forecast to grow faster than the US market (7.2% per year).

High Growth Revenue: PSTG's revenue (17.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PSTG's Return on Equity is forecast to be low in 3 years time (17.8%).


Next Steps

Past Performance

How has Pure Storage performed over the past 5 years?

2.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PSTG has a high level of non-cash earnings.

Growing Profit Margin: PSTG's current net profit margins (-14.5%) are lower than last year (-14.3%).


Past Earnings Growth Analysis

Earnings Trend: PSTG is unprofitable, but has reduced losses over the past 5 years at a rate of 2.3% per year.

Accelerating Growth: Unable to compare PSTG's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: PSTG is unprofitable, making it difficult to compare its past year earnings growth to the Tech industry (39.4%).


Return on Equity

High ROE: PSTG has a negative Return on Equity (-29.87%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Pure Storage's financial position?


Financial Position Analysis

Short Term Liabilities: PSTG's short term assets ($1.6B) exceeds its short term liabilities ($514.6M)

Long Term Liabilities: PSTG's short term assets (1.6B) exceeds its long term liabilities (863.9M)


Debt to Equity History and Analysis

Debt Level: PSTG's debt to equity ratio (62.8%) is considered high

Reducing Debt: Insufficient data to determine if PSTG's debt to equity ratio has reduced over the past 5 years.


Balance Sheet

Inventory Level: PSTG has a low level of unsold assets or inventory.

Debt Coverage by Assets: PSTG's debt is covered by short term assets (assets are 3.6x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable PSTG has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: PSTG is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 106.9% per year.


Next Steps

Dividend

What is Pure Storage's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.3%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate PSTG's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate PSTG's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if PSTG's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if PSTG's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of PSTG's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Pure Storage's salary, the management and board of directors tenure and is there insider trading?

2.5yrs

Average management tenure


CEO

Charlie Giancarlo (61yo)

2.3yrs

Tenure

US$8,383,230

Compensation

Mr. Charles H. Giancarlo, also known as Charlie, has been Chief Executive Officer and Director of Pure Storage, Inc. since August 22, 2017 and is also its Chairman. Mr. Giancarlo serves as an Advisor of Ve ...


CEO Compensation Analysis

Compensation vs Market: Charlie's total compensation ($USD8.38M) is about average for companies of similar size in the US market ($USD6.77M).

Compensation vs Earnings: Charlie's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.5yrs

Average Tenure

56yo

Average Age

Experienced Management: PSTG's management team is considered experienced (2.5 years average tenure).


Board Age and Tenure

2.3yrs

Average Tenure

58.5yo

Average Age

Experienced Board: PSTG's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$8,182,47027 Mar 19
Scott Dietzen
EntityIndividual
Role
Vice Chairman
Vice Chairman
Shares400,000
Max PriceUS$20.46

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 9.8%.


Management Team

  • Charlie Giancarlo (61yo)

    Chairman & CEO

    • Tenure: 2.3yrs
    • Compensation: US$8.38m
  • Paul Mountford (60yo)

    Chief Operating Officer

    • Tenure: 0yrs
  • David Hatfield (50yo)

    Vice Chair & President Emeritus

    • Tenure: 0yrs
    • Compensation: US$3.72m
  • Joe FitzGerald

    VP & General Counsel

    • Tenure: 0yrs
  • Matt Danziger

    Head of Investor Relations

    • Tenure: 0yrs
  • Coz Colgrove (56yo)

    • Tenure: 10.1yrs
    • Compensation: US$3.57m
  • Kevin Delane

    VP & Head of Worldwide Sales

    • Tenure: 2.4yrs
  • John Hayes

    Founder & Advisor

    • Tenure: 2.7yrs
  • Tim Riitters (46yo)

    Chief Financial Officer

    • Tenure: 5.3yrs
    • Compensation: US$3.84m
  • Cathy Southwick

    Chief Information Officer

    • Tenure: 0.9yrs

Board Members

  • Charlie Giancarlo (61yo)

    Chairman & CEO

    • Tenure: 2.3yrs
    • Compensation: US$8.38m
  • Frank Slootman (60yo)

    Independent Director

    • Tenure: 5.5yrs
    • Compensation: US$282.99k
  • Mark Garrett (61yo)

    Independent Director

    • Tenure: 4.3yrs
    • Compensation: US$290.24k
  • Jeff Rothschild (64yo)

    Independent Director

    • Tenure: 1.7yrs
    • Compensation: US$868.89k
  • Scott Dietzen (57yo)

    Vice Chairman

    • Tenure: 2.3yrs
  • Roxanne Taylor (62yo)

    Independent Director

    • Tenure: 0.8yrs
  • Anita Sands (43yo)

    Independent Director

    • Tenure: 4.3yrs
    • Compensation: US$289.74k
  • Coz Colgrove (56yo)

    • Tenure: 10.1yrs
    • Compensation: US$3.57m
  • Andy Brown (56yo)

    Director

    • Tenure: 0.2yrs
  • Sue Taylor (50yo)

    Independent Director

    • Tenure: 1.1yrs
    • Compensation: US$731.13k

Company Information

Pure Storage, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Pure Storage, Inc.
  • Ticker: PSTG
  • Exchange: NYSE
  • Founded: 2009
  • Industry: Technology Hardware, Storage and Peripherals
  • Sector: Tech
  • Market Cap: US$4.867b
  • Shares outstanding: 256.18m
  • Website: https://www.purestorage.com

Number of Employees


Location

  • Pure Storage, Inc.
  • 650 Castro Street
  • Suite 400
  • Mountain View
  • California
  • 94041
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PSTGNYSE (New York Stock Exchange)YesClass A Common StockUSUSDOct 2015
6PUDB (Deutsche Boerse AG)YesClass A Common StockDEEUROct 2015
0KSALSE (London Stock Exchange)YesClass A Common StockGBUSDOct 2015

Biography

Pure Storage, Inc. engages in building a data platform that enables businesses to enhance performance and reduce complexity and costs worldwide. The company delivers its data platform through Purity Operat ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/12 00:17
End of Day Share Price2019/11/11 00:00
Earnings2019/07/31
Annual Earnings2019/01/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.