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 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.
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%.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.