<\/p>\n
Six months ago, most investors still knew this company as Pure Storage (PSTG). In February, the flash-memory storage maker rebranded to Everpure (P) and struck a deal to acquire 1touch.io, a data-intelligence firm, betting its future on more than hardware alone.<\/p>\n
On Thursday, August 27, that bet started paying off in a way Wall Street can no longer ignore.<\/p>\n
Everpure makes flash-based storage systems and data-management software for large enterprises and cloud providers. The company built its name disrupting hard-disk-drive incumbents with faster, more efficient flash arrays, then added subscription-based storage as a second growth engine.<\/p>\n
Bank of America upgraded Everpure to Buy from Neutral on Thursday and raised its price objective to $150 from $90, according to a BofA Research note shared with TheStreet.<\/p>\n
Analysts Wamsi Mohan, Ruplu Bhattacharya and Ryan Seungin Choi pointed to accelerating hyperscaler demand and a widening addressable market as the reasons for the shift.<\/p>\n
Everpure posted revenue of $1.19 billion, up 38% year over year, marking its fourth straight quarter of accelerating growth. Shares closed up 5.92% to $108.90 and added another 1.93% in after-hours trading, according to Investing.com.<\/p>\n
Related: Cathie Wood sells $4 million of surging AI stock<\/p>\n
Margins are expanding even as unit sales slow<\/p>\n
Everpure’s product gross margin came in at 66.2% for the quarter, near the low end of its 65% to 70% target range, according to the BofA note. Management is deliberately holding prices there to capture market share rather than maximize near-term profit.<\/p>\n
That strategy is working. Non-GAAP operating profit jumped 77% to $230 million, and operating margin expanded 430 basis points year over year to 19.4%, the note said.<\/p>\n
Higher prices, a richer product mix and more capacity per system are offsetting a decline in unit volumes, a trade-off the company’s finance chief called intentional on the earnings call, according to Yahoo Finance.<\/p>\n
A subscription business is outgrowing product sales<\/p>\n
Everpure’s Evergreen\/\/One subscription service, which rents storage capacity instead of selling hardware outright, is growing faster than the core business. Storage-as-a-Service contract value rose 121% to $277 million, pushing the program’s annualized run rate above $1 billion, according to the note.<\/p>\n
Subscription annual recurring revenue climbed 20% to $2.1 billion, and remaining performance obligations, a measure of contracted future revenue, grew 44%.<\/p>\n
That combination suggests reported revenue may still understate real demand, since much of the growth sits in multiyear contracts that recognize slowly over time.<\/p>\n
BofA upgraded Everpure to Buy and raised its price target to $150 from $90 after the company’s second-quarter revenue grew 38% year over year.<\/p>\n
primeimages \/ Getty Images<\/p>\n
Nearly the entirety of Wall Street already agrees with BofA<\/p>\n
BofA’s upgrade arrives well after most of Wall Street had already turned bullish. Citi, Susquehanna, and Morgan Stanley each upgraded the stock to buy-equivalent ratings in early August, following a design win with a second top-five hyperscale customer, according to stockanalysis.com.<\/p>\n
Several more firms raised targets after this week’s earnings beat.<\/p>\n
JPMorgan and Morgan Stanley both maintained Overweight ratings, boosting their price targets to $145 (from $130) and $119 (from $108), respectively.<\/p>\n
Wedbush maintained an Outperform rating and boosted the price target to $130 from $127.<\/p>\n
Needham and Northland both raised targets Thursday, to $140 and $128 respectively.<\/p>\n
TD Cowen led the bullish wave with a Street-high target of $170, while Guggenheim reiterated its Buy rating with a $150 target, perfectly matching BofA’s new outlook.<\/p>\n
Even after BofA’s jump, the 21 analysts’ twelve-month average price target for Everpure sits at $125.90 (ranging from a low of $80.00 to a high of $170.00), representing a forecasted upside of 27.12% from the current price of $99.04, according to MarketBeat.<\/p>\n
That gap shows how far individual estimates have already moved ahead of the blended Wall Street consensus.<\/p>\n
More BofA:<\/p>\n
BofA reveals surprising reason to buy Zoom stock<\/p>\n
BofA finds AI is creating a credit divide that could reach consumers<\/p>\n
Bank of America debunks one widespread myth about trusts<\/p>\n
The real test arrives when hyperscaler revenue lands<\/p>\n
BofA’s new target rests on a valuation shift as much as a business one. The firm now values Everpure at 37 times its estimated 2028 free cash flow, up from a multiple equivalent to 27 times previously, reflecting more confidence in durable, subscription-driven cash generation, according to the BofA note.<\/p>\n
That confidence carries a deadline. BofA expects meaningful hyperscaler revenue only from fiscal 2028 onward, meaning today’s rally is pricing in a growth story that hasn’t fully arrived yet.<\/p>\n
Everpure’s Sept. 23 investor day is the next moment management will need to defend that timeline.<\/p>\n
BofA also flagged risks to its own thesis: an extended economic slowdown, rising component costs and competition from established rivals willing to discount deeply for key accounts.<\/p>\n
Hyperscale contracts tend to be lumpy, and any delay in signing new deals could slow the growth investors are now paying up for.<\/p>\n
Everpure’s rise mirrors a wider shift across data infrastructure, where flash memory and subscription pricing are replacing older storage models as AI workloads multiply data volumes.<\/p>\n
The real question for investors is whether hyperscalers keep paying a premium for differentiated hardware once cheaper alternatives inevitably catch up, a test that will define Everpure’s next chapter more than any single price target.<\/p>\n
Related: Bank of America doubles down on Nvidia stock<\/p>\n
#BofA #flips #Everpure #months #sidelines<\/p>\n","protected":false},"excerpt":{"rendered":"
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