On Thursday, TD (TSX:TD) Cowen showed confidence in Pure Storage (NYSE:PSTG) shares by raising its price target to $80 from the previous $60, while keeping a Buy rating intact.
The firm's move followed Pure Storage's recent performance, which exceeded expectations, driven by sustained gross margin strength and operational expenditure discipline.
The company's latest financial results have demonstrated robustness, leading analysts to maintain a positive outlook. Pure Storage has also projected optimism about securing a significant deal with a hyperscale customer within the year, a development that could further enhance the company's market valuation.
TD Cowen's analysis indicates that Pure Storage's valuation adjustment is based on a nearly 42 times multiple of the anticipated CY25 earnings per share (EPS).
Despite the adjustment in the price target, the firm's estimates for the calendar year 2025 remain largely unchanged and continue to surpass the consensus forecasts from other analysts.
The analyst from TD Cowen highlighted that the unchanged CY25 estimates post-earnings call reflect a stable and positive expectation for Pure Storage's financial trajectory.
The company's performance, coupled with disciplined spending, has contributed to the analyst's decision to increase the price target.
InvestingPro Insights
Following the upbeat assessment by TD Cowen, Pure Storage (NYSE:PSTG) presents a compelling case for investors, as reflected in real-time data and insights from InvestingPro. With a market capitalization of $20.48 billion and a high Price / Book multiple of 16.13 as of the last twelve months ending Q4 2024, the company's financial standing is robust. The data also shows a revenue growth of 2.8% during the same period, underpinning the company's steady performance.
Among the InvestingPro Tips, two particularly stand out in light of the article's context. Firstly, Pure Storage is expected to see net income growth this year, which aligns with the positive outlook from analysts. Additionally, the company's strong return over the last year, with a 114.29% 1 Year Price Total Return, demonstrates its market momentum and may intrigue investors looking for growth opportunities.
For those interested in a deeper analysis, InvestingPro provides additional metrics and tips for Pure Storage, including the fact that the company holds more cash than debt on its balance sheet and that liquid assets exceed short-term obligations, both indicative of financial health. To explore these insights further, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. In total, there are 18 additional InvestingPro Tips available, offering valuable perspectives for informed investment decisions.
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