Everpure: AI Storage Uncertainty Overshadows Breakneck Growth

Key Points

• Everpure posted Q1 FY2027 revenue of $1.05 billion, representing over 35% year-over-year growth, its fastest rate in four years.
• NAND flash supply shortages boosted revenue but also compressed product gross margins, which fell 180 basis points in one quarter to 65.5%.
• Analysts raised price targets following the earnings report, with the MarketBeat consensus near $96, implying over 40% upside from current levels.

Everpure NYSE: P, the data storage and management company formerly known as Pure Storage, has seen big ups and downs so far in 2026. Shares were down as much as 18% earlier in the year, before recently being up as much as 26%.

However, those gains quickly faded after the tech company’s latest earnings report. Despite beating and raising, Everpure shares tanked 14.8% in a single day after earnings.

Since then, the stock has continued to slide, putting Everpure shares very close to where they started the year.

The negative reaction partially reflects the high bar set for many AI-driven stocks. However, concerns also linger around the sustainability of Everpure’s very strong financial performance.

Still, at the end of the day, the factors driving these concerns are largely outside the company’s control. In the meantime, Everpure continues to execute well.

Everpure Beats Big, Posts Fastest Growth Since 2022

In its Q1 fiscal year 2027 (FY2027), Everpure reported revenue of $1.05 billion, breaking through the $1 billion mark for the second quarter in a row. (Note that Everpure’s fiscal reporting period is several quarters ahead of the calendar year period.) This resulted in revenue growth of more than 35% year-over-year (YOY), good for the company’s highest growth rate in four years. The figure solidly surpassed expectations near $998 million.

Earnings per share (EPS) came in at 47 cents, rising by 62% YOY and being well ahead of the consensus forecast of 40 cents. Notably, adjusted operating margin saw a huge 450 basis point increase, moving up to 15.1%. Growth in storage product revenue was particularly strong, rising by 55% YOY. Meanwhile, annual recurring revenue from software subscriptions hit $2.04 billion, growing by a healthy 19% YOY. Remaining performance obligations grew considerably faster than total revenue at 41% YOY to $3.8 billion—pointing to an acceleration in demand.

Off the back of these strong results, Everpure significantly increased its full-year guidance. It now projects midpoint sales growth of 21.5%, up 300 basis points from prior estimates. Its adjusted operating income growth guidance moved up even more by 650 basis points to a midpoint of 32.5%. However, tension is arising among investors due to one of the main drivers of these results, which has both positive and negative implications.

Investors Run Scared on Storage Supply Uncertainty

Everpure sells NAND flash-based storage systems and layers software services on top. Currently, the company is benefiting from a revenue perspective due to storage component supply shortages that are driving prices up dramatically. The shortage is so significant that Everpure notes price increases and customer pull-in contributed to nearly one-third of its revenue growth last quarter. Pull-in refers to customers placing orders earlier than they otherwise would have to get ahead of future price increases. However, the company’s gross margins are also taking a hit as it chooses not to raise its own prices as fast as its NAND suppliers. The company notes it is operating at the lower end of its product gross margin range to ease stress on customers. With this, product gross margin fell 180 basis points in one quarter to 65.5%.

However, the larger concern is whether customers could pull back spending if prices rise too significantly in NAND markets. Furthermore, pull-in today can reduce demand tomorrow as customers have already secured the products they need. At the same time, Everpure would have put up over 20% revenue growth without price increases and pull-in. The firm argues that this growth rate alone is a clear signal that it is gaining market share. This indicates that amid a volatile environment, customers are choosing to work with it over competitors. Notably, an over 20% growth rate would still be solidly above its average quarterly growth rate of 14% during the past four years.

Overall, the storage shortage heightens uncertainty in Everpure’s outlook, but the firm’s results point to solid execution amid these circumstances.

Analysts Continue to Support Everpure, Projecting Strong Upside

Despite the negative market reaction to Everpure’s report, analysts generally became more bullish on the stock afterward. MarketBeat tracked more than a handful of price target increases, including a particularly strong move from Guggenheim. The firm raised its target by nearly 10% to $115, making it one of the most bullish analysts tracked by MarketBeat.

The MarketBeat consensus price target for Everpure now sits near $96, implying over 40% upside. The average of targets updated after the report is just slightly lower, near $93. This difference comes as several targets that have not seen updates in some time sit above or near $100, lifting the consensus above the updated average. Nonetheless, analysts are largely demonstrating solid support for the stock.

On balance, Everpure’s outlook is genuinely difficult to forecast given the heightened uncertainty in AI storage markets. Still, with the company showing strength amid this uncertainty and strong analyst support, there remains significant room for optimism going forward.