Analyzing Pure Storage (PSTG) & Dot Hill Systems Corp. (HILL)

Dot Hill Systems Corp. (NASDAQ: HILL) and Pure Storage (NYSE:PSTG) are both technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, valuation, risk, earnings and profitability.

Institutional & Insider Ownership

34.9% of Pure Storage shares are owned by institutional investors. 46.6% of Pure Storage shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Dot Hill Systems Corp. and Pure Storage, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dot Hill Systems Corp. 0 0 0 0 N/A
Pure Storage 0 8 14 0 2.64

Pure Storage has a consensus target price of $15.43, indicating a potential upside of 23.50%. Given Pure Storage’s higher possible upside, analysts clearly believe Pure Storage is more favorable than Dot Hill Systems Corp..

Earnings and Valuation

This table compares Dot Hill Systems Corp. and Pure Storage’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Dot Hill Systems Corp. N/A N/A N/A N/A N/A
Pure Storage $770.66 million 3.38 -$160.42 million ($1.22) -10.24

Dot Hill Systems Corp. has higher revenue, but lower earnings than Pure Storage.

Profitability

This table compares Dot Hill Systems Corp. and Pure Storage’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dot Hill Systems Corp. 1.11% 3.86% 2.27%
Pure Storage -31.62% -44.04% -24.43%

Summary

Pure Storage beats Dot Hill Systems Corp. on 5 of the 8 factors compared between the two stocks.

About Dot Hill Systems Corp.

Dot Hill Systems Corp. (Dot Hill) is engaged in designing, manufacturing and marketing a range of storage systems, including hybrid storage arrays, for the entry and mid-range storage markets. The Company operates through two business segments: Server OEM and Vertical Markets. The Server OEM segment consists of Original Equipment Manufacturers (OEM) who purchases products from the Company to sell along with server products. The Company’s products are sold in server led sales into its end-user customers’ corporate information technology infrastructure. The Vertical Markets segment consists of selected Vertical Markets, which includes Media and Entertainment, Telecommunications Infrastructure, Oil and Gas, Big Data Analytics and Digital Imaging, among others. The Company sells its products to customers through both Vertical Markets OEM partners or embedded solutions integrators, as well as through channel partners.

About Pure Storage

Pure Storage, Inc. provides a data platform. The Company is focused on delivering software-defined all-flash solutions that are fast and cloud-capable for customers, enabling customers to put data to work for their businesses. Its data platform replaces storage systems designed for mechanical disk with all-flash systems optimized end-to-end for solid-state memory. Its business model replaces the forklift upgrade cycle with an Evergreen Storage model. Its primary offerings include its FlashArray and FlashBlade products, inclusive of its Purity Operating Environment (Purity OE) software, its Pure1 cloud-based software, and FlashStack, its joint converged infrastructure solution with Cisco. Its customers include large and mid-size organizations across a diverse set of industry verticals, including cloud-based software and service providers, consumer Web, education, energy, financial services, governments, healthcare, manufacturing, media, retail and telecommunications.

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