Pure Storage Inc. shares surged to a record high Wednesday after the flash-based data storage company’s stock gained a round of target-price increases from analysts following a strong quarter in a competitive sector.
Pure Storage PSTG, +14.90%[1] shares hit an intraday high of $26.30 Wednesday, were last up 14.7% at $25.25, and could best their record closing high of $25.39 set back in June. The stock started rallying in the extended session Tuesday night after the company reported an unexpected adjusted profit and acquisition of software company StorReduce[2]. Shares were also on track for their second-best one-day percentage jump, with the best being a 19% surge on Aug. 25, 2017.
Shares are 50% above their rocky debut of nearly three years ago[3] after which they struggled for two years to rise above their initial pricing of $17 a share. Over the past 12 months, Pure Storage shares have surged 98%, compared with a 17% gain in the S&P 500 index SPX, -0.03%[4] and a 25% gain in the tech-heavy Nasdaq Composite Index COMP, +0.30%[5]
Of the 23 analysts who cover Pure Storage, 16 have overweight or buy ratings, six have hold ratings, and one has a sell rating. Following earnings, 11 analysts raised their price targets, pushing the average target price to $26.55, according to FactSet.
BMO Capital Markets analyst Tim Long, who has an outperform rating and a price target of $30, said he sees Pure Storage gaining more share in the storage market “as success with larger customers and cloud players continues to play out.”
Wells Fargo analyst Aaron Rakers, who has an overweight rating and a $30 price target, remarked that Pure Storage delivered strong results even as competitor NetApp Inc. NTAP, +0.77%[6] is showing growth of about 50% year-over-year in all-flash storage and Dell’s DVMT, +0.45%[7] EMC is becoming “increasingly aggressive with sales investments” and new platforms.
“Our positive thesis on Pure has been underpinned by the belief that the company’s software-driven architectural attributes and portfolio expansion strategy have been underappreciated – we think Pure’s F2Q19 results and updated outlook could be considered...