FlashBlade//EXA

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3 Storage Devices Stocks to Focus on Amid Industry Headwinds
ZACKS· 2025-09-19 13:30
Core Insights - The Zacks Computer-Storage Devices industry faces challenges from escalating trade tensions, macroeconomic turbulence, and intense competition, but benefits from trends like digital transformation, edge computing, and AI workload proliferation [1][2][6] Industry Overview - The industry includes companies that design, develop, manufacture, and market HDDs and SSDs for various devices, with some offering software-defined all-flash solutions and high-performance memory subsystems [3] Trends Influencing Growth - AI is driving demand for high-speed, high-capacity storage solutions, necessitating a shift towards NVMe-based SSDs and object storage for unstructured data [4] - Cloud storage technologies are evolving, with a focus on virtualization and edge computing to manage increasing data complexity and scale [5] Macro Conditions - Trade tensions and inflation are significant concerns, potentially affecting global IT spending, which is projected to reach $5.43 trillion in 2025, a 7.9% increase from 2024 [6] - PC shipments increased by 4.4% year-over-year in Q2 2025, but are expected to plateau in the latter half of the year due to vendor inventory adjustments [7][8] Industry Performance - The Zacks Computer-Storage Devices industry has outperformed the S&P 500 with a 22.7% increase over the past year, compared to the S&P 500's 17.8% gain, but lags behind the broader sector's 28.3% growth [11] Valuation Metrics - The industry is currently trading at a forward 12-month P/E ratio of 21.15X, below the S&P 500's 23.32X and the sector's 28.93X [14] Company Highlights - **Netlist (NLST)**: Experienced a 44% sequential revenue increase to $41.7 million, driven by DDR5 demand, and is pursuing legal actions against Samsung and Micron for patent infringements [20][21] - **Pure Storage (PSTG)**: Expanded its Flash portfolio and reported strong demand for its products, with a Zacks Rank of 3 and a 71.6% stock gain over the past year [25][27] - **NetApp (NTAP)**: Benefiting from demand for all-flash arrays and cloud storage solutions, with Keystone storage-as-a-service revenues growing 80% year-over-year [32][33]
PSTG Stock Jumps 37% in a Month: Should Investors Hold or Exit?
ZACKS· 2025-09-05 14:36
Core Insights - Pure Storage, Inc's (PSTG) shares have gained 37.1% in the past month and 29.4% since strong quarterly results were announced on August 27 [1][8] - The stock has outperformed the Computer-Storage Devices industry, the Zacks Computer and Technology sector, and the S&P 500 composite, which grew by 12.7%, 2.9%, and 3.1% respectively [4] Price Performance - Closing at $78.73, PSTG is near its 52-week high of $80.68 reached on August 28, 2025 [4] Business Growth Drivers - Strong demand from large enterprises and ongoing momentum in FlashBlade, particularly FlashBlade//E, are key growth drivers [5] - Subscription services revenues rose 14.8% to $414.7 million, with annual recurring revenues (ARR) reaching nearly $1.8 billion, up 18% year-over-year [6][8] - The introduction of new storage systems in the Flash portfolio aims to address high-performance and scalable workloads [7] - The launch of the Enterprise Data Cloud (EDC) enhances data and storage management capabilities [8] Financial Health - Pure Storage exited the fiscal second quarter with cash and cash equivalents of $1.5 billion, and cash flow from operations was $212.2 million [9] - The company returned $42 million to shareholders through share repurchases [10] Future Outlook - For fiscal 2026, PSTG expects revenues between $3.6 billion and $3.63 billion, indicating a 14% year-over-year growth at the midpoint [11] - Analysts have revised earnings estimates upward, reflecting bullish sentiment [12] Competitive Landscape - Despite strong performance, Pure Storage faces competition in the flash-based storage market and potential delays in enterprise cloud migrations due to macroeconomic uncertainties [13][14] Valuation Concerns - PSTG is trading at a forward Price/Earnings ratio of 36.41X, significantly higher than the industry average of 19.47X, raising concerns about its valuation [15] Investment Recommendations - Current sentiment suggests that new investors should wait for a better entry point, while existing investors are advised to retain their holdings [16][17]
Will Cloud and AI Growth Help Seagate Preserve Its Margin Momentum?
ZACKS· 2025-08-27 13:31
Core Insights - Seagate Technology is experiencing significant demand growth driven by cloud, AI, and edge computing, with nearline hard drives being essential for hyperscale cloud storage [1][2] - The company's build-to-order contracts provide revenue visibility into mid-2026, ensuring predictable supply for cloud service providers [1] - Seagate's mass-capacity revenues increased by 40% year-over-year to $2 billion in Q4, with nearline drives making up 91% of mass-capacity exabytes shipped [2][9] Revenue and Profitability - The adoption of Heat-Assisted Magnetic Recording (HAMR) technology and the Mozaic 3+ platform is expected to enhance storage economics and profitability [3] - Seagate's Q4 non-GAAP gross margin reached 37.9%, a 170 basis point sequential increase and nearly 700 basis points year-over-year, driven by high-capacity nearline drives and pricing discipline [5][9] - Non-GAAP operating income nearly doubled to $640 million, resulting in an operating margin increase to 26.2% [5] Future Outlook - For Q1 of fiscal 2026, Seagate anticipates revenues of approximately $2.5 billion, reflecting a 15% year-over-year growth at the midpoint, with non-GAAP earnings projected at $2.30 per share [6] - Management expects continued gross margin expansion into the mid-to-high 20% range of revenues [6] Competitive Landscape - Seagate faces competition from HDD and SSD manufacturers like Western Digital and Pure Storage, which are also capitalizing on rising cloud demand [7][8] - Western Digital reported a non-GAAP gross margin of 41.3% in Q4, while Pure Storage's non-GAAP gross margin was 70.9% in Q1 of fiscal 2025 [8][10] Market Performance - Seagate's shares have increased by 66.4% over the past year, outperforming the Zacks Computer Integrated Systems industry's growth of 20.2% [11] - The forward price/earnings ratio for Seagate is 17.01X, lower than the industry's 19.97X [12] - The Zacks Consensus Estimate for Seagate's earnings for fiscal 2026 has been revised up by 4.2% to $10.30 [13]
PSTG, TierPoint Unveil Imaging Storage-as-a-Service for Healthcare
ZACKS· 2025-06-24 15:36
Core Insights - Pure Storage, Inc. (PSTG) has partnered with TierPoint to launch an Imaging Storage-as-a-Service solution tailored for the healthcare sector, addressing challenges such as rising storage costs, performance limitations, and stringent security requirements [1][10] Group 1: Product Offering - The new solution integrates Pure Storage's high-performance infrastructure with TierPoint's HIPAA-compliant data centers, providing a scalable, cloud-enabled storage service that supports AI-driven imaging workloads and long-term data retention [2][10] - The per-study billing model enhances cost predictability for healthcare organizations while improving image retrieval speed and data protection for critical assets [2][10] Group 2: Market Impact - This service allows healthcare providers to align storage costs with patient care delivery models, enabling them to scale operations efficiently and focus on improving patient outcomes [3][4] - The collaboration aims to enhance diagnostic capabilities, boost operational efficiency, and support better patient outcomes in healthcare IT [4] Group 3: Technological Advancements - Pure Storage continues to innovate in enterprise storage, particularly for modern data workloads such as AI and high-performance computing, with the release of Portworx Enterprise 3.3 enhancing its Kubernetes-native storage capabilities [5] - The rollout of FlashBlade//EXA and the adoption of the //E family, which support AI and HPC workloads, indicate strong growth potential, with Storage-as-a-Service TCV sales increasing by 70% in the fiscal first quarter [6] Group 4: Strategic Partnerships - Pure Storage has partnered with Nutanix to provide a solution for managing virtual workloads, enhancing operational efficiency for IT teams in hybrid cloud environments [7] - The firm has also expanded its partnership with Rubrik to improve protection for unstructured data, enhancing threat detection and recovery capabilities in a ransomware-prone environment [8]
Pure Storage(PSTG) - 2026 Q1 - Earnings Call Presentation
2025-05-28 20:48
Financial Performance - Total revenue reached $778.5 million, a 12% year-over-year growth[9] - Subscription Annual Recurring Revenue (ARR) hit $1.71 billion, reflecting an 18% year-over-year increase[9, 38] - Storage as a Service offerings generated $95 million in Total Contract Value (TCV) sales, marking a substantial 70% year-over-year growth[9, 11] - The company's Non-GAAP operating margin stood at 10.6%[9, 38] - Operating cash flow was $283.9 million[38] - Remaining Performance Obligations (RPO) grew by 17% year-over-year[9, 54] Customer Base and Satisfaction - The company serves over 13,500 global customers[9] - Customer satisfaction, measured by Net Promoter Score (NPS), is at 81, the highest in the industry[9] - 62% of Fortune 500 companies are customers[9, 36] Product Innovation and Partnerships - Launched FlashBlade//EXA, a high-performance storage platform for AI and high-performance computing[12] - Announced integration with Nutanix Cloud Platform for scalable virtualized environments[13] - Announced collaboration with SK Hynix to deliver energy-efficient flash storage for hyperscale environments[13] Guidance - The company projects Q2FY26 revenue of $845 million, representing a 10.6% year-over-year growth, and a Non-GAAP operating margin of 14.8%[56] - For FY26, the company anticipates revenue of $3.515 billion, an 11% year-over-year growth, and a Non-GAAP operating margin of 17.0%[58]
Pure Storage Gears Up to Report Q1 Earnings: Here's What to Expect
ZACKS· 2025-05-26 15:41
Core Viewpoint - Pure Storage, Inc. (PSTG) is expected to report a decline in earnings for the first quarter of fiscal 2026, while total revenues are projected to grow year-over-year [1][2]. Financial Performance - The Zacks Consensus Estimate for earnings in the upcoming quarter is 25 cents, reflecting a 21.9% decrease from the same quarter last year [1]. - Total revenues are estimated at $771.2 million, indicating an 11.2% year-over-year growth [1]. - For the first quarter, Pure Storage anticipates revenues of $770 million, which represents an 11% increase from the previous year [2]. Revenue Breakdown - Subscription services revenues accounted for 43.8% of total revenues in the last reported quarter, amounting to $385.1 million, which was a 17% increase [3]. - For the fiscal first quarter, Subscription services revenues are expected to be $358.5 million, up 3.6% year-over-year [3]. Product and Market Developments - The adoption of FlashArray//XL and FlashArray//E, along with strong Evergreen subscription renewals, is likely to contribute positively to PSTG's performance [3]. - Recent product launches, including the second-generation Pure Fusion and enhancements to the Portworx platform, are expected to drive enterprise adoption, particularly for cloud-native and AI/ML workloads [4]. Margin Expectations - Pure Storage expects product gross margins to stabilize in the mid-60s for fiscal 2026, aligning with its long-term target of 65-70% [5]. Competitive Landscape - The company faces stiff competition and an uncertain macroeconomic environment, with geopolitical uncertainties expected to impact the market throughout the year [6]. Strategic Partnerships - On April 21, 2025, Pure Storage partnered with Varonis Systems to enhance data protection capabilities for organizations [7]. - The incorporation of the NVIDIA AI Data Platform reference design into its FlashBlade platform reinforces Pure Storage's commitment to scalable AI-ready solutions [8]. - The upcoming launch of FlashBlade//EXA, designed for AI and High-Performance Computing (HPC), is set for summer 2025 [9].