Now Is Not The Time To Buy Pure Storage Stock

January 5th, 2026 by Trefis Team
PSTG: Pure Storage logo
PSTG
Pure Storage

Shares of all-flash storage provider – Pure Storage (NASDAQ: PSTG) – have climbed over 20% in the last six months, fueled by the company’s critical role in providing power-efficient, high-density arrays for AI data centers. However, despite these tailwinds, we believe the stock is currently unattractive at its price of around $70. While the company’s outlook has clear positives, its ‘Very High’ valuation appears disconnected from its underlying fundamentals. Our assessment of PSTG’s growth, profitability, and resilience suggests a ‘Moderate’ operating performance that does not justify the current premium. That said, if you seek upside with lower volatility than individual stocks like PSTG, the Trefis High Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 105% since its inception.

How Does Pure Storage’s Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, PSTG stock looks very expensive compared to the broader market.

  • Pure Storage has a price-to-sales (P/S) ratio of 6.6 vs. a figure of 3.3 for the S&P 500
  • Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 40.4 compared to 20.8 for S&P 500
  • And, it has a price-to-earnings (P/E) ratio of 175.6 vs. the benchmark’s 23.7

How Have Pure Storage’s Revenues Grown Over Recent Years?

Pure Storage’s Revenues have seen some growth over recent years.

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  • Pure Storage has seen its top line grow at an average rate of 9.6% over the last 3 years (vs. increase of 5.6% for S&P 500)
  • Its revenues have grown 13.2% from $3.1 Bil to $3.5 Bil in the last 12 months (vs. growth of 6.2% for S&P 500)
  • Also, its quarterly revenues grew 16.0% to $964 Mil in the most recent quarter from $831 Mil a year ago (vs. 7.3% improvement for S&P 500)

How Profitable Is Pure Storage?

Pure Storage’s profit margins are much worse than those of most companies in the Trefis coverage universe.

Does Pure Storage Look Financially Stable?

Pure Storage’s balance sheet looks very strong.

  • Pure Storage’s Debt figure was $226 Mil at the end of the most recent quarter, while its market capitalization is $23 Bil (as of 1/4/2026). This implies a very strong Debt-to-Equity Ratio of 1.0% (vs. 20.4% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
  • Cash (including cash equivalents) makes up $1.5 Bil of the $4.2 Bil in Total Assets for Pure Storage.  This yields a very strong Cash-to-Assets Ratio of 36.3% (vs. 7.2% for S&P 500)

How Resilient Is PSTG Stock During A Downturn?

PSTG stock has fared worse than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on PSTG stock? Our dashboard Is Pure Storage Stock Built to Withstand More Downside? has a detailed analysis of how the stock performed during and after previous market crashes.

Inflation Shock (2022)

  • PSTG stock fell 41.1% from a high of $28.90 on 12 February 2021 to $17.03 on 12 May 2021, vs. a peak-to-trough decline of 25.4% for the S&P 500
  • The stock fully recovered to its pre-Crisis peak by 24 November 2021
  • Since then, the stock has increased to a high of $98.70 on 2 November 2025 and currently trades at around $69

Covid Pandemic (2020)

  • PSTG stock fell 55.6% from a high of $19.74 on 12 February 2020 to $8.76 on 18 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
  • The stock fully recovered to its pre-Crisis peak by 24 November 2020

Putting All The Pieces Together: What It Means For PSTG Stock

In summary, Pure Storage’s performance across the parameters detailed above are as follows:

  • Growth: Strong
  • Profitability: Weak
  • Financial Stability: Very Strong
  • Downturn Resilience: Weak
  • Overall: Moderate

But keeping in mind its very high valuation, we think that the stock is unattractive at its current levels of around $70. Now, of course, we could be wrong in our assessment, and investors may continue to pay a higher premium given the stock’s strong position in the AI infrastructure market. Remember, investing in a single stock without comprehensive analysis can be risky. You could explore the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid-, and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.

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