Pure Storage (PSTG) jumps 8% on Q4 beat, better-than-feared guide

Pure Storage (NYSE: PSTG) stock soared 7% in premarket trading Thursday after the tech company delivered solid Q4 results and better-than-feared guidance.

The technology company reported Q4 EPS of $0.50, topping the consensus estimates of $0.44. Revenue for the quarter came in at $789.8 million, also ahead of the expected $784.21 million.

The quarter witnessed a notable 24% increase in subscription services revenue, reaching $328.9 million, and a 25% rise in subscription annual recurring revenue (ARR) to $1.4 billion.

Pure Storage also reported a non-GAAP gross margin of 73.7%.

Looking ahead, Pure Storage has set its revenue forecast for the fiscal first quarter of 2025 at $680 million, exceeding analysts' consensus of $667.3 million.

Furthermore, the PSTG’s full-year revenue forecast stands at $3.1 billion, significantly above the $2.82 billion expected by analysts.

"We closed FY24 delivering strong RPO growth, and exceeded our revenue and operating margin guidance in Q4," said Kevan Krysler, CFO of Pure Storage.

"Looking to FY25, we expect double-digit revenue growth and strong growth of RPO, fueled by our highly differentiated data storage platform, and strength of our Evergreen and Portworx consumption and subscription offerings."

Evercore ISI analysts maintained an Outperform rating on the stock and adjusted the price target to $54.

"We think PSTG remains well positioned to sustain double-digit revenue growth in FY25 and beyond," Evercore analysts said.

Similarly, Guggenheim analysts led by Howard Ma also lifted the target price to $54 from $48.

"Following the cleared F4Q24 hurdle, we have increased confidence in Pure’s position as a category leader with sustainable double-digit growth, FCF margin approaching 20%, and recurring revenue mix approaching 50%," they wrote in a note.

By Vahid Karaahmetovic

You May Also Be Interested In

• AeroVironment restates quarterly financials, citing $89M goodwill error
• Alkami Technology Inc (ALKT) PT Lowered to $19 at JPMorgan
• Regenxbio Inc. (RGNX) PT Raised to $32 at Baird