We assign a fundamental rating of 5 out of 10 to PSTG. PSTG was compared to 35 industry peers in the Technology Hardware, Storage & Peripherals industry. PSTG is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. While showing a medium growth rate, PSTG is valued expensive at the moment.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year PSTG was profitable.
PSTG had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: PSTG reported negative net income in multiple years.
PSTG had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

With a decent Return On Assets value of 3.09%, PSTG is doing good in the industry, outperforming 71.43% of the companies in the same industry.
With an excellent Return On Equity value of 9.29%, PSTG belongs to the best of the industry, outperforming 82.86% of the companies in the same industry.
PSTG's Return On Invested Capital of 1.88% is in line compared to the rest of the industry. PSTG outperforms 57.14% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PSTG is significantly below the industry average of 16.06%.

		Industry Rank	Sector Rank
ROA	3.09%
ROE	9.29%
ROIC	1.88%

ROA(3y)2.14%

ROA(5y)-1.63%

ROE(3y)6.92%

ROE(5y)-7.17%

ROIC(3y)2.97%

ROIC(5y)N/A

1.3 Margins

PSTG has a better Profit Margin (3.74%) than 74.29% of its industry peers.
The Operating Margin of PSTG (2.01%) is comparable to the rest of the industry.
The Gross Margin of PSTG (69.81%) is better than 97.14% of its industry peers.
In the last couple of years the Gross Margin of PSTG has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	2.01%
PM (TTM)	3.74%
GM	69.81%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y1.13%

GM growth 5Y0.25%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PSTG is destroying value.
Compared to 1 year ago, PSTG has more shares outstanding
The number of shares outstanding for PSTG has been increased compared to 5 years ago.
Compared to 1 year ago, PSTG has an improved debt to assets ratio.

2.2 Solvency

An Altman-Z score of 5.64 indicates that PSTG is not in any danger for bankruptcy at the moment.
PSTG has a better Altman-Z score (5.64) than 82.86% of its industry peers.
PSTG has a debt to FCF ratio of 0.01. This is a very positive value and a sign of high solvency as it would only need 0.01 years to pay back of all of its debts.
PSTG has a better Debt to FCF ratio (0.01) than 94.29% of its industry peers.
PSTG has a Debt/Equity ratio of 0.00. This is a healthy value indicating a solid balance between debt and equity.
With an excellent Debt to Equity ratio value of 0.00, PSTG belongs to the best of the industry, outperforming 82.86% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0
Debt/FCF	0.01
Altman-Z	5.64

ROIC/WACC0.21

WACC8.86%

2.3 Liquidity

PSTG has a Current Ratio of 1.65. This is a normal value and indicates that PSTG is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.65, PSTG is in the better half of the industry, outperforming 62.86% of the companies in the same industry.
PSTG has a Quick Ratio of 1.60. This is a normal value and indicates that PSTG is financially healthy and should not expect problems in meeting its short term obligations.
PSTG has a Quick ratio of 1.60. This is in the better half of the industry: PSTG outperforms 71.43% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.65
Quick Ratio	1.6

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The earnings per share for PSTG have decreased by -0.57% in the last year.
PSTG shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 45.75% yearly.
The Revenue has grown by 13.18% in the past year. This is quite good.
The Revenue has been growing by 14.03% on average over the past years. This is quite good.

EPS 1Y (TTM)-0.57%

EPS 3Y33.42%

EPS 5Y45.75%

EPS Q2Q%16%

Revenue 1Y (TTM)13.18%

Revenue growth 3Y13.26%

Revenue growth 5Y14.03%

Sales Q2Q%16.05%

3.2 Future

The Earnings Per Share is expected to grow by 14.09% on average over the next years. This is quite good.
PSTG is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.40% yearly.

EPS Next Y15.94%

EPS Next 2Y16.28%

EPS Next 3Y16.68%

EPS Next 5Y14.09%

Revenue Next Year15.16%

Revenue Next 2Y15.79%

Revenue Next 3Y15.64%

Revenue Next 5Y15.4%

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 39.86, PSTG can be considered very expensive at the moment.
PSTG's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.21, PSTG is valued a bit more expensive.
A Price/Forward Earnings ratio of 30.17 indicates a quite expensive valuation of PSTG.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PSTG is on the same level as its industry peers.
PSTG's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.98.

		Industry Rank	Sector Rank
PE	39.86
Fwd PE	30.17

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as PSTG.
Based on the Price/Free Cash Flow ratio, PSTG is valued a bit cheaper than the industry average as 62.86% of the companies are valued more expensively.

		Industry Rank	Sector Rank
P/FCF	40.45
EV/EBITDA	100.22

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
A more expensive valuation may be justified as PSTG's earnings are expected to grow with 16.68% in the coming years.