Evercore ISI's analysis suggests that this cloud partnership could become approximately 10% of Pure Storage (NYSE:PSTG)'s gross profit dollars in FY27 and potentially exceed that percentage in subsequent years. The firm anticipates that Pure Storage will maintain flat EBIT margins in FY26 as it invests in scaling up resources to support this growth.
The optimistic outlook is based on Pure Storage's potential to accelerate revenue and gross profit over the next several years as it taps into a new total addressable market (TAM) estimated to be over $10 billion. With revenue growing at 8.89% and multiple InvestingPro indicators pointing to strong future growth potential, Evercore ISI believes that while Pure Storage faces the challenge of precise execution in the future, the company is well-positioned to capitalize on this significant opportunity.
The company's performance was notably influenced by certain Evergreen//One deals that transitioned toward a more traditional revenue model. During the earnings call, Pure Storage highlighted a significant design win with a top four cloud company.
This deal will see Pure Storage's Purity software and DirectFlash technology licensed to the cloud provider, with early field trial buildouts expected in CY25 and large full production deployments anticipated in CY26. With a market capitalization of $17.54 billion and a healthy current ratio of 1.99, InvestingPro data shows the company is well-positioned financially to execute on these growth initiatives.
Evercore ISI's analysis suggests that this cloud partnership could become approximately 10% of Pure Storage's gross profit dollars in FY27 and potentially exceed that percentage in subsequent years. The firm anticipates that Pure Storage will maintain flat EBIT margins in FY26 as it invests in scaling up resources to support this growth.
The optimistic outlook is based on Pure Storage's potential to accelerate revenue and gross profit over the next several years as it taps into a new total addressable market (TAM) estimated to be over $10 billion. Evercore ISI believes that while Pure Storage faces the challenge of precise execution in the future, the company is well-positioned to capitalize on this significant opportunity.
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