Buying Pure Storage Inc. (PSTG) Stock Is A Smart Move Today?

Pure Storage Inc. (NYSE:PSTG) finished Thursday with a subtraction of -$0.04 to close at $25.68, a downside of -0.16 percent. An average of 4,104,180 shares of common stock have been traded in the last five days. There was a gain of $0.52 in the past week. The last 20 days have seen an average of 3,796,860 shares traded, while the 50-day average volume stands at 3,998,194.

PSTG stock has decreased by -0.70% in the last month. The company shares reached their 1-month lowest point of $24.63 on 10/04/21. With the stock rallying to its 52-week high on 02/16/21, shares of the company touched a low of $15.80 and a high of $29.53 in 52 weeks. In spite of this, the price is down -13.04% from the 52-week high.


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Insider Transactions

28 days have passed since Pure Storage Inc. (PSTG) last reported insider trading activity. Sands Anita M, who is Director, most recently acquired $74,157 shares at $26.79 per share on Sep 10. In this transaction, the insider spent $1,986,838. Director, Sands Anita M, disposed of 30,380 shares at a price of $21.48 on Apr 08. The insider now owns more than $652,709 worth of shares. Prior to that, Director Dietzen Scott went on to Sale 310,000 shares at $23.56 each on Feb 01. An amount of $7,303,351 was transacted.

Valuation Metrics

Pure Storage Inc. (PSTG) has a trailing price-to-earnings (P/E) ratio of 23.30 for the broader industry and 37.11 for the sector. This means investors are optimistic about the stock’s future prospects. The stock’s beta is 1.42. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 3.93, the price-to-book (PB) ratio at 10.44, and the price-to-cash flow ratio at 49.41.

The quick ratio of Pure Storage Inc. for the three months ended July 30 was 2.40, and the current ratio was 2.50, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 1.11 and a total debt to equity ratio of 1.11 For the recent quarter ending July 30. On the profitability front, the trailing 12-month gross margin is 68.00% against a 5-year average of 67.0%. Pure Storage Inc.’s EBITDA margin for the year ending July 30 is -9.45%, while its operating margin for the same period stands at -12.20%. Its gross profit as reported stood at $1.15 billion compared to revenue of $1.68 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Pure Storage Inc.’s return on assets was -9.30%, compared to -14.5% over the last five years. In the past year, the return on investment has been -18.10%, and the 5-year average is -24.5%. Meanwhile, the return on equity (ROE) for the past 12 months has been -35.30% and the 5-year average holds at -32.3%. For the broader industry, ROE averaged 3.62 over the past year.

Earnings Surprise

The analyst consensus anticipated Pure Storage Inc.’s latest quarter earnings to come in at $0.05 per share, but it turned out to be $0.14, a 180.00% surprise. For the recent quarter, EBITDA amounted to -$6.91 million. Shareholders own equity worth $285.07 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Pure Storage Inc. (PSTG) price momentum. RSI 9-day as of the close on 07 October was 49.67%, suggesting the stock is Neutral, with historical volatility in this time frame at 36.03%.

As of today, PSTG’s price is $25.53 +2.07% or $0.52 from its 5-day moving average. PSTG is currently trading -2.39% lower than its 20-day SMA and +42.35% higher than its 100-day SMA. However, the stock’s current price level is +32.23% above the SMA50 and +12.68% above the SMA200.

The stochastic %K and %D were 37.31% and 29.59%, respectively, and the average true range (ATR) was 0.85. With the 14-day stochastic at 36.84% and the average true range at 0.83, the RSI (14) stands at 53.81%. The stock has reached -0.01 on the 9-day MACD Oscillator while the 14-day reading was at -0.27.

Analyst Ratings

Stifel upgraded Pure Storage Inc. (NYSE: PSTG) to a a Buy rating in its most recent analyst report. Previously, the stock was rated as a a Hold.The consensus rating for Pure Storage Inc. (PSTG) among analysts is Buy. According to current brokerage recommendations, 0 brokerage firms advise that investors sell PSTG, while 3 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 1 analysts, while 17 others rate it as a “buy”.

What is PSTG’s price target for the next 12 months?

Analysts predict a range of price targets between $23.00 and $36.00, with a median target of $32.00. Taking a look at these predictions, the average price target given by analysts for Pure Storage Inc. (PSTG) stock is $31.00.

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