Since January 2021, the S&P 500 has delivered a total return of 87.9%. But one standout stock has more than doubled the market - over the past five years, Pure Storage has surged 221% to $74.26 per share. Its momentum hasn’t stopped as it’s also gained 25.1% in the last six months thanks to its solid quarterly results, beating the S&P by 15.6%.
Is now still a good time to buy PSTG? Or is this a case of a company fueled by heightened investor enthusiasm? Find out in our full research report, it’s free.
Why Are We Positive On Pure Storage?
Founded in 2009 as a pioneer in enterprise all-flash storage technology, Pure Storage (NYSE: PSTG) provides all-flash data storage hardware and software that helps organizations manage their data more efficiently across on-premises and cloud environments.
1. ARR Surges as Recurring Revenue Flows In
In addition to reported revenue, ARR (annual recurring revenue) is a useful data point for analyzing Hardware & Infrastructure companies. This metric shows how much Pure Storage expects to collect from its existing customer base in the next 12 months, giving visibility into its future revenue streams.
Pure Storage’s ARR punched in at $1.84 billion in the latest quarter, and over the last two years, its year-on-year growth averaged 21.2%. This performance was fantastic and shows that customers are willing to take multi-year bets on the company’s product offerings. Its growth also makes Pure Storage a more predictable business, a tailwind for its valuation as investors typically prefer businesses with recurring revenue. 
2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
Pure Storage’s EPS grew at an astounding 44.3% compounded annual growth rate over the last five years, higher than its 15.8% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Excellent Free Cash Flow Margin Boosts Reinvestment Potential
Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
Pure Storage has shown terrific cash profitability, enabling it to reinvest, return capital to investors, and stay ahead of the competition while maintaining an ample cushion. The company’s free cash flow margin was among the best in the business services sector, averaging 17% over the last five years.
Final Judgment
These are just a few reasons why we think Pure Storage is an elite business services company, and with its shares beating the market recently, the stock trades at 33.9× forward P/E (or $74.26 per share). Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More Than Pure Storage
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
