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Pure Storage Stock Rises as Raymond James Sees Long-Term Upside from Hyperscaler Deal From Investing.com

On Wednesday, Raymond (NS:) James expressed confidence in Pure Storage (NYSE:NYSE:) stock as the company raised its price target to $78 from $70 previously while reiterating its Outperform rating.

The revision follows Pure Storage’s impressive performance in the third quarter of fiscal 2025, which exceeded expectations and included a major partnership announcement with a leading hyperscale operator.

Currently valued at $17.54 billion, the company has shown strong momentum with a year-to-date return of over 50%. According to InvestingPro’s data, Pure Storage has a solid financial position with a current ratio of 1.99, indicating strong liquidity.

The Raymond James analyst highlighted the recent surge in Pure Storage’s third-quarter financial report, which was somewhat overshadowed by confirmation of a strategic agreement with one of the top four hyperscale operators.

Despite earlier hints from management about this possible development, the stock’s significant 20% rise in after-hours trading suggests that investors still had some level of skepticism or uncertainty.

InvestingPro’s analysis shows the company is expected to post an 11% increase in revenue this financial year, with 12 additional exclusive insights available to subscribers through detailed Pro Research reports.

This groundbreaking deal is a first-of-its-kind licensing agreement, which the analyst had previously expected to be a likely outcome of this collaboration. Notably, the contract does not include hardware sales, making the financial impact difficult to estimate. Additionally, it is not expected to contribute to Pure Storage’s revenue until fiscal 2027.

Meanwhile, Raymond James expects corporate spending to increase, particularly in areas related to the adoption of artificial intelligence and hard disk drive (HDD) replacements. These investments, along with other cloud opportunities, are expected to support Pure Storage’s growth trajectory.

The analyst’s statement concluded with a reaffirmation of the new price target of $78, reflecting a positive outlook for Pure Storage’s future prospects, driven by both recent financial results and its strategic hyperscale partnership.

Based on InvestingPro’s fair value analysis, the stock appears to be trading above its intrinsic value, with current trading multiples showing a P/E ratio of 125 and an EV/EBITDA of 57.5. Discover comprehensive valuation metrics and expert insights for over 1,400 US stocks with InvestingPro’s advanced research tools.

This article was created with the assistance of AI and reviewed by an editor. Further information can be found in our terms and conditions.

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