Pure Storage (PSTG) stock tumbled below its 200-day moving average Thursday, despite the enterprise data storage company posting fiscal fourth-quarter results ahead of expectations. Mixed guidance and concerns about the company’s gross margins are weighing on shares.
Pure Storage said late Wednesday that it earned an adjusted 45 cents per share on sales of $880 million for the Feb. 2-ended quarter. Analysts polled by FactSet projected Pure Storage’s adjusted earnings would come in at 41 cents per share, with sales of $869 million.
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Pure Storage’s adjusted earnings dipped 10% on a per-share basis, while sales increased 11%. The quarter was the final one for Pure Storage’s fiscal 2025.
“While revenues for Q4 were ahead of expectations and the Q1 and (fiscal year 2026) guide roughly paralleled consensus, margins disappointed meaningfully,” Wedbush analyst Matt Bryson wrote to clients Thursday.
On the stock market today, Pure Storage stock fell more than 9% to 56.28 in recent morning trades.
Analyst View On Pure Storage Earnings
Mountain View, Calif.-based Pure Storage offers flash-based data storage hardware, as well as software tools to manage data storage. Shares rallied after Pure Storage last reported quarter results in December. Earnings beat expectations and Pure Storage announced a first-ever “design win” for its flash data storage technology to work with a top-four cloud hyperscaler.
Pure Storage stock soared 78% in 2024. The rally extended into 2025, with Pure Storage stock reaching a record high of 73.67 on Jan. 22. But the stock had started to pull back, even before Thursday’s slide. Pure Storage stock closed Wednesday 13% below its January high and trading roughly flat year-to-date.
Meanwhile, Pure Storage said in a news release that it expects sales of $770 million for the current quarter. Analysts were looking for $769 million, according to FactSet. The company also projected non-GAAP operating income of $80 million, while analysts were projecting $93 million, according to FactSet.
William Blair analyst Jason Ader said Pure Storage’s results were solid across most metrics, with gross margins being the exception.
Adjusted gross margins declined to 69.2% from 71.9% a quarter earlier. That was below expectations of 70.3%, according to FactSet.
Ader rates Pure Storage stock as outperform. He attributed the negative stock reaction to “lack of guidance upside and near-term gross margin weakness.”
Bryson also stuck to an outperform call for Wedbush.
“We haven’t encountered fundamental reasons to believe Pure Storage’s competitive profile in its core market has slipped (we believe NetApp has been executing well, but that dynamic has been in place for a few quarters),” Bryson wrote. “As such, we are inclined to believe Pure Storage’s suggestion product margins should indeed rebound.”
Pure Storage Stock Technical Ratings
However, the break below the 200-day line offered another potential sell signal. Pure Storage already fell below its 50-day moving average last Friday.
Coming into the report, Pure Storage stock has an IBD Composite Rating of 84 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Pure Storage’s IBD Relative Strength Rating is 85. The RS Rating means that Pure Storage has outperformed 85% of all stocks in IBD’s database over the past 12 months.
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