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. PSTG is valied quite expensively at the moment, while it does show a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

PSTG had positive earnings in the past year.
PSTG had a positive operating cash flow in the past year.
In multiple years PSTG reported negative net income over the last 5 years.
PSTG had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

PSTG has a Return On Assets of 3.09%. This is in the better half of the industry: PSTG outperforms 71.43% of its industry peers.
PSTG has a Return On Equity of 9.29%. This is amongst the best in the industry. PSTG outperforms 82.86% of its industry peers.
With a Return On Invested Capital value of 1.88%, PSTG perfoms like the industry average, outperforming 57.14% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years 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.
PSTG's Operating Margin of 2.01% is in line compared to the rest of the industry. PSTG outperforms 57.14% of its industry peers.
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.
PSTG has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, PSTG has more shares outstanding
PSTG has a better debt/assets ratio than last year.

2.2 Solvency

PSTG has an Altman-Z score of 5.76. This indicates that PSTG is financially healthy and has little risk of bankruptcy at the moment.
PSTG has a Altman-Z score of 5.76. This is amongst the best in the industry. PSTG outperforms 82.86% of its industry peers.
The Debt to FCF ratio of PSTG is 0.01, which is an excellent value as it means it would take PSTG, only 0.01 years of fcf income to pay off 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.
PSTG has a Debt to Equity ratio of 0.00. This is amongst the best in the industry. PSTG outperforms 82.86% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0
Debt/FCF	0.01
Altman-Z	5.76

ROIC/WACC0.21

WACC8.88%

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.
PSTG's Current ratio of 1.65 is fine compared to the rest of the industry. PSTG outperforms 62.86% of its industry peers.
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's Quick ratio of 1.60 is fine compared to the rest 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

PSTG shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -0.57%.
The Earnings Per Share has been growing by 45.75% on average over the past years. This is a very strong growth
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

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

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

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 39.86, which means the current valuation is very expensive for PSTG.
The rest of the industry has a similar Price/Earnings ratio as PSTG.
The average S&P500 Price/Earnings ratio is at 27.21. PSTG is valued slightly more expensive when compared to this.
Based on the Price/Forward Earnings ratio of 30.17, the valuation of PSTG can be described as expensive.
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 valuation a bit more expensive than the S&P500 average which is at 24.26.

		Industry Rank	Sector Rank
PE	39.86
Fwd PE	30.17

4.2 Price Multiples

PSTG's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, PSTG is valued a bit cheaper than 62.86% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	40.45
EV/EBITDA	102.88

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PSTG does not grow enough to justify the current Price/Earnings ratio.
PSTG's earnings are expected to grow with 16.68% in the coming years. This may justify a more expensive valuation.