Pure Storage, Inc. (PSTG): The Old Roof Became A New Floor

Chief Technology Officer, 10% Owner Colgrove John sold 4,779 shares in Pure Storage, Inc. (NYSE:PSTG) for $235,484 in transaction occurred on 2018/10/05. After making this transaction, the Chief Technology Officer, 10% Owner owns a direct stake of 121,243 shares, worth $4,354,099, as per the last closing price. On 2018/10/05 Dietzen Scott, Director at PSTG, dumped 3,377 shares at an average price of $25.18 per share. The selling total is valued at $4,314,919.

Separately, it had been reported that some other PSTG insiders also took part of the insider trading activity. President, Hatfield David had divested 4,893 shares for $311,521 through a trade on 2018/10/05. Following this activity, the insider holds 123,597 shares worth $5,760,023 as of recent close. Wall Street’s most bullish Pure Storage, Inc. (NYSE:PSTG) analysts are predicting the share price to blow past $33 per share during the next 12 months. The current median share price forecast by them is $28, suggesting that the stock could increase 51.43% in that time frame. The average price target of $26.53 calls for a nearly 43.48% increase in the stock price.

Pure Storage, Inc. (PSTG) trading activity significantly weakened as the volume at ready counter decreased to 3,490,354 shares versus 3,807,505 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 3,322,755 shares. The share price rose 2.49% in recent trade and currently has a stock-market value of $4.25B. The shares finished at $18.49, after trading as low as $17.28 earlier in the session. It hit an intraday high Thursday at $18.53. The stock is now 16.95% above against its bear-market low of $15.81 on December 29, 2017. It has retreated -57.6% since it’s 52-week high of $29.14 reached in September. Now the market price is up 8.51% on the year and up 16.58% YTD.

PSTG’s 50 day simple moving average (SMA 50) price is $21.12 and its 200-day simple moving average (SMA 200) price is $22.44. The company’s stock currently has a total float of 202.55M shares. Its weekly volatility is hovering around 4.86% and felt 5.65% volatility in price over a month. On the upside, the share price will test short term resistance at around $18.92. On a downside, the stock is likely to find some support, which begins at $17.67. The failure to get near-term support could push it to $16.85.

It had seen a positive analyst call from Goldman, which upgraded the stock from Sell to Neutral on October 17. Analysts at Lake Street, maintained the company shares at Buy on August 22 but switched target price from $24 to $29. Analysts at JP Morgan, made their first call about the stock on July 27, recommending it is Overweight. Stifel, released new analyst coverage on June 05, calling the stock is Hold.

Moreover, it trades for 42.21 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 6.58x price/book and 3.33x price/sales. Compared to others, Pure Storage, Inc. is in a different league with regards to profitability, having net margins of -13.8%. To put some perspective around this, the industry’s average net margin is -4.66%. PSTG’s ROE is -30.5%, which is also considerably worse than the industry’s ROE of 5.66%. It’s also very liquid in the near term, with a current ratio of 4. The stock has a debt/capital of 0.68.

Shares of Pure Storage, Inc. (PSTG) have gained 2.9% since the company’s Jan-18 earnings report. Over the past 12 fiscal quarters, Pure Storage, Inc. (NYSE:PSTG) has topped consensus earnings estimates in 10 quarters (83%), missed earnings in 1 quarters (8%), whereas at 1 occasion EPS met analyst expectations. PSTG last reported earnings on November 19, 2018 when it released Oct-18 results that exceeded expectations. The company raked in $0.13 per share, -99.68% change on the same period last year. That was better than consensus for $0.09. Revenue for the recent quarter stood at $372.78 million, up 34% on last year and above the $367.36 million predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $321.9 million to $335.25 million, which should be compared with $0 generated last year.