Stock Analysis & Valuation Pure Storage, Inc. (0KSA.L)

• Previous Close: £70.72
• Sector Valuation Confidence Level: Low

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	38.40	-46
Intrinsic value (DCF)	41.87	-41
Graham-Dodd Method	3.50	-95
Graham Formula	4.90	-93

Strategic Investment Analysis

Company Overview

Pure Storage, Inc. (LSE: 0KSA.L) is a leading innovator in data storage technologies, providing cutting-edge solutions for enterprises worldwide. Headquartered in Mountain View, California, Pure Storage specializes in all-flash storage arrays and software-defined storage solutions designed to optimize performance, scalability, and efficiency. The company's flagship products include FlashArray for block storage, FlashBlade for unstructured data, and Portworx for Kubernetes-based data management. Pure Storage's subscription-based model, including Pure as-a-Service, offers flexible, cloud-integrated storage solutions. Operating in the competitive Technology sector under Hardware, Equipment & Parts, Pure Storage differentiates itself through its Evergreen Storage architecture, which ensures non-disruptive upgrades and long-term cost efficiency. With a strong focus on AI-ready infrastructure and hybrid cloud solutions, Pure Storage is well-positioned to capitalize on the growing demand for high-performance, scalable storage in enterprise and cloud environments.

Investment Summary

Pure Storage presents an attractive investment opportunity due to its strong position in the high-growth all-flash storage market, recurring revenue model, and innovation in AI and cloud-native storage solutions. The company has demonstrated solid revenue growth ($3.17B in FY 2025) and positive net income ($106.7M), supported by robust operating cash flow ($753.6M). However, investors should consider the competitive pressures from larger tech players, the capital-intensive nature of the storage industry, and the company's relatively high beta (1.056), indicating above-average market volatility. The lack of dividend payouts may deter income-focused investors, but growth-oriented investors may find value in Pure Storage's expanding market share and technological leadership in next-gen storage solutions.

Competitive Analysis

Pure Storage competes in the enterprise storage market by leveraging its software-defined architecture, all-flash focus, and subscription-based business model. Its key competitive advantage lies in the Purity operating environment, which delivers superior data reduction, performance, and simplicity compared to traditional storage systems. The company's Evergreen Storage model disrupts the industry by eliminating forced hardware refreshes, reducing total cost of ownership. Pure Storage has successfully positioned itself as a high-performance alternative to legacy storage vendors, particularly for cloud-native and AI workloads. However, it faces intense competition from well-established players with broader product portfolios and deeper enterprise relationships. Pure Storage's focus on 100% flash arrays gives it performance advantages but limits its addressable market compared to hybrid storage vendors. The company's cloud integration strategy, including Cloud Block Store, helps it compete in hybrid environments but requires continued investment to keep pace with hyperscalers' storage offerings.

Major Competitors

• NetApp, Inc. (NTAP): NetApp is a strong competitor with a broad portfolio including hybrid cloud data services and all-flash solutions. Its ONTAP software provides robust data management capabilities across environments. While NetApp has greater market share and enterprise penetration, Pure Storage often outperforms in pure all-flash array performance and simplicity. NetApp's strength in hybrid systems could challenge Pure as enterprises balance performance and cost considerations.
• Dell Technologies Inc. (DELL): Dell's PowerStore and PowerMax arrays compete directly with Pure's FlashArray products. Dell's immense scale, broad IT portfolio, and strong channel relationships make it formidable. However, Pure Storage often wins on technology differentiation in all-flash performance and modern architecture. Dell's strength in converged infrastructure (VxRail) presents competition for Pure's FlashStack solutions.
• International Business Machines Corporation (IBM): IBM's storage portfolio, including FlashSystem, competes with Pure's offerings. IBM brings strong AI and analytics integration through Watson, along with deep enterprise relationships. However, Pure typically offers more streamlined, purpose-built flash solutions. IBM's recent focus on hybrid cloud and consulting services creates differentiation but may dilute storage focus compared to Pure's dedicated approach.
• Hewlett Packard Enterprise Company (HPE): HPE's Nimble Storage and Primera arrays compete with Pure's FlashArray line. HPE benefits from extensive global reach and server-storage synergies. Pure often competes effectively with superior flash efficiency and simpler management. HPE's GreenLake as-a-service model competes directly with Pure's subscription offerings, but Pure maintains technology leadership in all-flash architectures.
• Pure Storage, Inc. (PSTG): Note: This is the US-listed share class of Pure Storage (same company as 0KSA.L). The competitive dynamics are identical to the LSE listing. Investors should consider liquidity differences between the two listings when making investment decisions.