Price Wars and Storage - The two are not synonymous! #PureStorage shares are not highly valued in terms of EV/S. And while it is not quite yet objectively provable, I think a business like this with a gross margin above 65% is going to be quite profitable when it reaches some kind of steady-state growth. I will discuss valuation a bit later in this article, best as can be done. At the moment, the company has a market capitalization of $2.38 billion. Its cash balance is a bit greater than $500 million and so it has an enterprise value of less than $1.9 billion. The current estimate for sales in the 2018 fiscal year is just a bit above $1 billion - thus the EV/S is less than 2X. I do not want to try to probe the psyche or the logic of the 10 analysts who rate this name a hold. They clearly have different and much higher bars than I do regarding evaluating stocks. Or as is really the case, they believe that the growth trajectory for Pure is far more fraught than I do or that the path to profitability is littered with boulders and hidden landmines.
http://seekingalpha.com/article/4027847-pure-storage-great-price-war
No comments:
Post a Comment