NEW YORK, NY / ACCESSWIRE / August 23, 2018 / While they both have the word storage in their names, they didn't see similar gains on Wednesday. Shares of Pure Storage were exploding yesterday and hitting an all-time new high after reporting second quarter results and the acquisition of StorReduce. Shares of Public Storage fell nearly 4.5% after Goldman analyst downgraded the stock.
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Pure Storage, Inc.
Pure Storage, Inc. shares closed up 14.27% on nearly 16.3 million shares traded yesterday. The data flash storage company saw its share price hit an all time new high of $26.30 after receiving several target price increases from analysts following a strong quarter. For the second quarter, the company posted non-GAAP earnings per share of $0.01, up from a non-GAAP loss of $0.10 in the year-ago quarter. On average, analysts were expecting a non-GAAP loss per share of $0.06. Revenue at $308.9 million was a growth compared to the $224.7 million in the year-ago quarter. It was also higher than the $301 million that analysts had expected. The company also announced the acquisition of StorReduce, a cloud based storage software vendor that is privately held. "We are excited about the natural integration points with both our current on-premise product portfolio and also its contribution to Pure's cloud integration and cloud services capability," said Pure Storage CEO Charles Giancarlo. BMO Capital Markets analyst Tim Long, remarked that he believes the company could gain more share in the storage market "as success with larger customers and cloud players continues to play out.” Long has an "outperform" rating and a $30 price target. Wells Fargo analyst Aaron Rakers, who has an overweight rating and a $30 price target as well, said that Pure Storage delivered strong results. "Our positive thesis on Pure has been underpinned by the belief that the company's software-driven architectural attributes and portfolio expansion strategy have been underappreciated – we think Pure's F2Q19 results and updated outlook could be considered as a point of supportive inflection in our thesis," Rakers noted.
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Public Storage shares were down 4.45% in Wednesday's session on trading volume higher than usual. The stock of the self storage facility REIT dropped after Goldman Sachs analyst Andrew Rosivach downgraded the stock from neutral to sell citing concerns about slowing same-store growth and increased storage space supply that's not likely to subside next year. Rosivach also cut the price target on Public Storage from $210 to $198. The stock closed at $211 on Tuesday. The Company reported its quarterly report at the beginning of the month. Net income for the three months ended June 30th, 2018, was $348.3 million or $2.00 per diluted common share, compared to $276.7 million or $1.59 per diluted common share in 2017 representing an increase of $71.6 million or $0.41 per diluted common share. The company reported funds from operations of $462.5 million, or $2.65 per share, in the period. Analysts on average had waited for $2.61 a share. Revenue for the quarter was $685.5 million while analysts had expected $689 million.
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