Pure Storage Stock Before Q4 Earnings: Time to Buy, Hold or Exit?

Pure Storage, Inc. PSTG is scheduled to report fourth-quarter fiscal 2026 results for the quarter ended Feb. 1, 2026, after market close on Feb. 25.

The Zacks Consensus Estimate for earnings in the to-be-reported quarter is pegged at 65 cents, indicating a rise of 44.4% from the year-ago reported quarter.

The consensus estimate for total revenues is pegged at $1.03 billion, implying 17.2% year-over-year growth. Pure Storage expects revenues in the $1.02-$1.04 billion band, implying an increase of 17.1% at the midpoint from the year-ago level.

The company's earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, while missing in the last, delivering an average surprise of 7.9%.

What Does the Zacks Model Suggest About PSTG

Our proven model does not predict an earnings beat for PSTG this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

PSTG has an Earnings ESP of -2.93% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Here Are the Critical Factors to Watch for in PSTG’s Q4

Heightened demand for AI-ready infrastructure, flash storage adoption and subscription-based revenue models are reshaping the data storage landscape. Pure Storage is well poised to capitalize on this growing trend on the back of healthy enterprise activity, hyperscale wins and rising adoption of its subscription and cloud portfolio. Strong enterprise spending and steady growth in Evergreen//One and modern virtualization solutions, including CBS and Portworx, are likely to have fueled PSTG’s fiscal fourth-quarter performance.

Its enterprise traction is fueled by its Purity-based platform, enhanced by Fusion, which underpins its Evergreen subscription model and delivers reliable, non-disruptive storage. Pure’s flagship FlashBlade platform is central to its strategy, particularly for unstructured data and AI workloads. Its recent performance shows how Flash products underpin revenue growth and margin expansion. Higher sales of high-performance FlashArrays, upside in Portworx term-license revenues, and increased hyperscaler shipments are likely to have aided its margins. Beating the full-year hyperscale shipment forecast of 2 exabytes in the last reported quarter, it expects further growth in the fiscal fourth quarter.

By broadening its product portfolio, Pure Storage is strengthening its foothold across industries ranging from financial services and healthcare to AI-driven startups and large-scale cloud providers. For the fiscal fourth quarter, management expects non-GAAP operating income of $220-$230 million, with year-over-year growth of around 47% at the midpoint. It is steadily transitioning toward a recurring revenue model through its Evergreen architecture and Storage-as-a-Service offerings. Backed by Purity, Evergreen and DirectFlash, PSTG is enabling Enterprise Data Clouds through Fusion and Evergreen//One, helping customers move from siloed systems to automated, policy-based, enterprise-wide data management that lowers cost and risk.

However, conditions are likely to deteriorate further before improving, given the current backdrop of macroeconomic uncertainty, margin pressure and ongoing investment needs. Management anticipates that rising commodity costs and strong demand will create new pressure on global supply chains, similar to the disruptions seen in 2021-2022. This could result in longer lead times and higher component prices across the technology industry. The near-term outlook remains weak. While long-term investors may choose to stay put, most others have reason to be cautious about the stock at this stage.

Nonetheless, commodity inflation is more of a revenue tailwind than a margin headwind for PSTG, given its pricing model.

PSTG Stock vs. Industry

PSTG’s shares have rallied 15.7% in the past year, underperforming the Zacks Computer-Storage Devices industry’s growth of 146.2%. The stock has also lagged the Zacks Computer & Technology sector and the S&P 500’s growth of 25% and 18.2%, respectively.

The company has outperformed its competitor in the storage space, like NetApp, Inc. NTAP, while underperforming Seagate Technology Holdings plc STX and Sandisk Corporation SNDK. NTAP has plunged 17% in the past year, while STX and SNDK have skyrocketed 310.8% and 1,237.4%, respectively.

PSTG Trades at a Premium

PSTG stock is not cheap, as its Value Style Score of F suggests a stretched valuation at this moment. In terms of forward price/earnings, PSTG’s shares are trading at 95.72X, way higher than the industry’s 19.54X.

NTAP, STX and SNDK are trading at multiples of 14.88X, 25.82X and 17.45X, respectively.

Investor Strategy Guide: Hold PSTG for Now

Pure Storage’s fiscal fourth-quarter results will be closely watched for signs that AI-driven demand, FlashBlade momentum and rising ARR from the Evergreen model are translating into faster revenue growth, better margins and strong fiscal 2026 guidance, all of which would reinforce its transition toward a high-growth, subscription-led data platform. However, risks remain from longer enterprise spending cycles, intense competition, potential margin pressure and any cautious outlook, which could trigger near-term volatility despite solid long-term fundamentals.

The stock appears to be treading in the middle of the road, and new investors could be better off if they trade with caution.

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This article originally published on Zacks Investment Research (zacks.com).

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