If You Had Bought Pure Storage (NYSE:PSTG) Stock A Year Ago, You'd Be Sitting On A 36% Loss, Today
Pure Storage, Inc. (NYSE:PSTG) shareholders should be happy to see the share price up 28% in the last month. But in truth the last year hasn't been good for the share price. In fact, the price has declined 36% in a year, falling short of the returns you could get by investing in an index fund.
Check out our latest analysis for Pure Storage
Pure Storage wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last year Pure Storage saw its revenue grow by 21%. That's definitely a respectable growth rate. Meanwhile, the share price is down 36% over twelve months, which is disappointing given the progress made. This implies the market was expecting better growth. However, that's in the past now, and it's the future that matters most.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Pure Storage is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling Pure Storage stock, you should check out this free report showing analyst consensus estimates for future profits.
A Different Perspective
Over the last year, Pure Storage shareholders took a loss of 36%. In contrast the market gained about 1.4%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Fortunately the longer term story is brighter, with total returns averaging about 8.2% per year over three years. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. It's always interesting to track share price performance over the longer term. But to understand Pure Storage better, we need to consider many other factors. For instance, we've identified 3 warning signs for Pure Storage that you should be aware of.
Of course Pure Storage may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
