Opportunity knocks!
- Much of the stock weakness is attributed to selling pressure from Ark Investments lowering their position in the stock following the market volatility over the last three months.
pullback was caused by Ark Investments selling much of their holdings during the recent market volatility...
Many investors think of Pure Storage as the "old" Pure Storage - which was a fast-growing company, yes, but in the less-attractive business of selling solid state drives and other data center storage hardware.
These days, however, Pure Storage has transformed the notion of storage into a service (which it has dubbed "Pure as a Service") which customers pay for on a
monthly basis, complete with add-ons such as backup and recovery solutions. Pure Storage is also available directly to public cloud consumers on AWS or Microsoft Azure.<----
At current share prices near $19, the stock has a market cap of $5.37 billion. After we net off the $1.23 billion of cash and $0.76 billion of debt on Pure Storage's most recent balance sheet, the company's resulting
enterprise value is $4.90 billion.
For the current fiscal year, meanwhile, Wall Street analysts are expecting Pure Storage to
generate $1.96 billion in revenue, representing 16% y/y growth /This puts Pure Storage's valuation at just
2.5x EV/FY22revenue. Understandable for a hardware company, but for a growing subscription business with a 70% pro forma gross margin and a mid-teens growth file, the risk-reward profile for Pure Storage is squarely on the bulls' side.<------
Pure Storage customer adds
