Pure Storage, Inc. (PSTG): Good Quarter, Profitability Coming Soon - Susquehanna

Susquehanna analyst, Mehdi Hosseini, reiterated his Positive rating on shares of Pure Storage (NYSE: PSTG) and raised his price target to $18 and believes profitability may occur as soon as the Oct Q due to improving GM, product momentum, sales force maturation (improving productivity), and seasonally.

The call had 4 key takeaways:

1) the CEO transition came as a surprise but incoming CEO, Giancarlo's, background (i.e. Cisco) of managing large scale businesses could be a good fit, given PSTG now needs to scale from $1B in Revs to multi-billions

2) PSTG could be a takeover target by either the likes of MU, driven by a bold move to vertically integrate up the stack, or by Cisco as it builds out its storage portfolio

3) FlashBlade remains on track at >$80M in Rev in FY18

4) Product GMs were impressive in light of NAND pricing (purchases in Apr Q helped) and the fact that PSTG did not pass along ASP increases on its products.

The new PT of $18 is up from $16.

For an analyst ratings summary and ratings history on Pure Storage click here. For more ratings news on Pure Storage click here.

Shares of Pure Storage closed at $12.56 yesterday.

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