Pure Storage (PSTG 25.53%) stock is making big gains in Wednesday's trading. The company's share price was up 23.9% as of 10:30 a.m. ET.

Pure Storage published its third-quarter earnings results after the market closed yesterday and posted sales and earnings that beat the market's expectations. In addition to top- and bottom-line beats in Q3, the company also issued encouraging forward guidance and detailed contract wins with cloud hyperscaler customers.

Pure Storage climbs on Q3 beats

Pure Storage reported non-GAAP (adjusted) earnings of $0.50 per share on revenue of $831.1 million. For comparison, the average analyst estimate had called for adjusted per-share earnings of $0.42 on sales of $818.14 million. Revenue was up 9% year over year in the period, and the company closed out the quarter with annual recurring subscription revenue up 22% year over year to $1.6 billion. The business closed the period with remaining performance obligations (RPO) of $2.4 billion and $1.6 billion in cash and short-term equivalents.

What's next for Pure Storage?

For the fourth quarter, the company is guiding for sales of $867 million -- beating the previous average analyst estimate's call for sales of $856.9 million. If the company were to hit its growth target, it would mean delivering year-over-year sales growth of 9.7%.

In line with its Q3 performance and Q4 guidance, management expects to post sales of roughly $3.15 billion, topping the average Wall Street target.

The strong quarterly performance and guidance has prompted a series of ratings upgrades and price-target increases from analysts. Piper Sandler raised its rating on the stock from neutral to overweight and increased its one-year price target from $56 per share to $76 per share. As of this writing, Piper Sandler's new price target implies additional upside of roughly 13%.