Critical Analysis: Pure Storage (PSTG) & SanDisk (SNDK)

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

Analyst Recommendations

This is a breakdown of recent recommendations for SanDisk and Pure Storage, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SanDisk 0 0 0 0 N/A
Pure Storage 0 8 14 0 2.64

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

Valuation & Earnings

This table compares SanDisk and Pure Storage’s top-line revenue, earnings per share (EPS) and valuation.

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

SanDisk has higher revenue, but lower earnings than Pure Storage.

Profitability

This table compares SanDisk and Pure Storage’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SanDisk 5.74% 5.68% 3.35%
Pure Storage -31.62% -44.04% -24.43%

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 endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Pure Storage beats SanDisk on 5 of the 8 factors compared between the two stocks.

SanDisk Company Profile

SanDisk Corporation offers flash storage solutions. The Company designs, develops and manufactures data storage solutions in a range of form factors using flash memory, controller, firmware and software technologies. The Company operates through flash memory storage products segment. Its solutions include a range of solid state drives (SSD), embedded products, removable cards, universal serial bus (USB), drives, wireless media drives, digital media players, and wafers and components. It offers SSDs for client computing applications, which encompass desktop computers, notebook computers, tablets and other computing devices. Its embedded products are used for embedded storage for mobile phones, tablets, notebooks and other portable and wearable devices, as well as in automotive and connected home applications. Its removable products include cards, USB flash drives, Wireless Drives and Digital Media Players at a range of storage capacities. It sells memory wafers and memory components.

Pure Storage Company Profile

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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