Key Takeaways:
Everpure joins the S&P 500 Sept. 21, forcing passive funds to buy shares after an AI rally lifted the stock nearly 50% this year.
"Everpure has entered breakout territory in its core enterprise market as the artificial-intelligence boom pushes customers to rethink how they manage data," Charlie Giancarlo, chief executive officer, said in the July-quarter release.
The flash-storage maker, formerly Pure Storage, reported revenue up 38% to $1.2 billion and non-GAAP net income up 63% to 70 cents a share. It raised fiscal 2027 revenue guidance to $5.03 billion to $5.07 billion from a prior $4.41 billion to $4.51 billion, and remaining performance obligations climbed 44% to more than $4.1 billion.
Index inclusion historically pays off. Of 171 companies added to the S&P 500 over the past decade, the average returned 16% in the following year as funds tracking the benchmark bought shares, according to data cited in the company's investor materials. Everpure holds its financial analyst meeting Sept. 23.
Everpure, which moves up from the S&P MidCap 400, replaces The Trade Desk in the benchmark. It joins Bloom Energy and Illumina, which replace Molson Coors Beverage and Builders FirstSource respectively, in the latest quarterly reshuffle. The additions trigger automatic buying from the trillions of dollars benchmarked to the S&P 500, giving Everpure a fresh source of demand just as its revenue growth accelerates for an eighth straight quarter.
The company builds enterprise storage arrays around its proprietary DirectFlash modules, which let its Purity software manage raw NAND flash directly rather than through the translation layers found in standard solid-state drives. Everpure says the design delivers two to three times better storage density while consuming 39 percent to 54 percent fewer watts per terabyte than rivals, a pitch that has won over two of the five largest hyperscalers. It expanded on a 2024 deal with Meta Platforms by signing a second top-five cloud customer, which TD Cowen analyst Krish Sankar believes is Oracle.
The AI buildout has been the engine. Everpure buys raw NAND flash from suppliers including Micron and Sandisk, and its Evergreen subscription model — which swaps in hardware and software without downtime — runs 30 percent to 40 percent cheaper than traditional buy-and-replace storage. Its consumption-based Evergreen//One service has passed $1 billion in annualized contract value, and management expects the hyperscale business to contribute more meaningfully in the second half of fiscal 2027.
The stock trades at about 43 times adjusted earnings, a multiple Wall Street considers reasonable given forecast earnings growth of 28 percent annually through the fiscal year ending January 2028. Among 21 analysts covering the stock, the median price target is $133, implying about 31 percent upside from its recent $101. Shares pulled back after the July-quarter report in late August as investors weighed near-term cash flow and product margins, which management said reflect deliberate choices to secure supply and prioritize growth ahead of the index move.
This article is for informational purposes only and does not constitute investment advice.
