Raymond James Cuts Price Target on Pure Storage, Inc. (PSTG) Following 1Q Earnings Report

Raymond James maintained an Outperform rating on Pure Storage (NYSE: PSTG), and cut the price target to $20.00 (from $21.00), following the company's 1Q earnings report. Total revenue of $140 million was above the high end of management's $135-139 million guidance range. Management noted that early feedback regarding its FlashBlade product is as enthusiastic as its early FlashArray customers, and now allows it to address the full $24 billion storage TAM.

Analyst Brian Alexander commented, "We maintain our Outperform rating on PSTG following another quarter of better than expected revenue and operating results. Still, the magnitude of upside vs. guidance was not as impressive as the prior two quarters, and F2Q revenue guidance is just in line with Street estimates. Investors may harken back to this dynamic for competitor Nimble, which preceded a marked deceleration in growth. We are more optimistic, however, driven by the secular shift toward flash storage and Pure's leading position, along with our positive proprietary checks. Product revenue is on track to exceed $570 million in 2016, growing more than 60%, while gross margin remains well above most competitors. The launch of FlashBlade in F4Q should provide another catalyst for growth. Shares trade at just 2.5x EV/revenue using our 2017 estimate based on current after hours share price of ~$12.50. We view this as highly attractive given our expectation for +40% growth."

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 $14.72 yesterday.

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