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Pure Storage Inc
NYSE:PSTG

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Pure Storage Inc
NYSE:PSTG
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Price: 35.87 USD -0.66% Market Closed
Updated: Nov 29, 2023
Section:
 

DCF Value

This DCF valuation model was created by Alpha Spread and was last updated on Nov 27, 2023.

Estimated DCF Value of one PSTG stock is 35.9 USD. Compared to the current market price of 35.87 USD, the stock is Fairly Valued.

PSTG DCF Value
Base Case
35.9 USD
Fairly Valued
DCF Value
Price
Worst Case
Base Case
Best Case
35.9
DCF Value
Worst Case
Base Case
Best Case
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DCF Value: 35.9 USD
Pure Storage Inc Competitors:
DCF Valuation
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Valuation Analysis

DCF Financials
Financials used in DCF Calculation

Revenue
3.2B 5B
Operating Income
499m 912m
FCFF
681m 921m

Sensitivity Analysis
DCF Value Sensitivity Analysis

Revenue Growth Operating Margin Discount Rate

Present Value Calculation

The first step in the DCF calculation process is to estimate the company's future free cash flow. Once free cash flow is forecasted, it is discounted at a risk-appropriate discount rate. The resulting value is the present value of the company's free cash flow. You can change any model inputs below.

Available Valuation Models
1 valuation model available
Alpha Spread
Updated on Nov 27, 2023
Default Valuation
Create My Valuation Model
Other investors haven't shared any valuation models for Pure Storage Inc.
Model Settings
Operating Model
Worst Case Base Case Best Case
Discount Rate
8.85%
Forecast Period
5 Years
Terminal Growth
0%
Discount Rate
8.85%
Terminal Growth
0%
Growth Period
5 Years
Copy as My Model

DCF Model
Base Case Scenario

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DCF Model
Currency: USD
Millions
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To view the process of deriving the DCF Value of one share from the estimated Present Value, see the DCF Value Calculation block.

DCF Value Calculation

Depending on which type of operating model is chosen (equity or whole firm valuation model), the resulting value is either the value of equity or the value of the entire firm. In the case of the latter, to move from the value of the firm to the value of equity, liabilities are subtracted and assets are added.

Capital Structure
From Present Value to DCF Value

Present Value 10B USD
+ Cash & Equivalents 409m USD
+ Investments 820m USD
Firm Value 11.2B USD
- Debt 103m USD
Equity Value 11.1B USD
/ Shares Outstanding 310m
PSTG DCF Value 35.9 USD
Fairly Valued

To view the process of calculating the Present Value of Pure Storage Inc' future free cash flow, see the Present Value Calculation block.

See Also

Summary
PSTG intrinsic value, competitors valuation, and company profile.
DCF Valuation
PSTG stock valuation using Discount Cash Flow valuation method.
Relative Valuation
PSTG stock valuation using valuation multiples.
Wall Street Estimates
PSTG price targets and financial estimates made by Wall st analysts.
Profitability Analysis
Detailed analysis of the company's profitability.
Solvency Analysis
Analysis of the financial position and solvency of the company.
Financials
Income Statement, Balance Sheet, Cash Flow Statement.
Discount Rate
PSTG stock discount rate: cost of equity and WACC.
Summary
DCF Valuation
Relative Valuation
Wall Street Estimates
Profitability Analysis
Solvency Analysis
Financials
Discount Rate
Discover More
What is the DCF value of one PSTG stock?

Estimated DCF Value of one PSTG stock is 35.9 USD. Compared to the current market price of 35.87 USD, the stock is Fairly Valued.

The true DCF Value lies somewhere between the worst-case and best-case scenario values. This is because the future is not predetermined, and the stock's DCF Value is based almost entirely on the future of the company. Knowing the full range of possible stock DCF values gives a complete picture of the investment risks and opportunities.

How was the DCF Value calculated?

1. Present Value Calculation. Using the DCF Operating Model we project Pure Storage Inc's future free cash flow and discount it at a selected discount rate to calculate its Present Value (10B USD).

2. DCF Value Calculation. We use the company's capital structure to calculate the total Equity Value based on the previously computed Present Value of the free cash flow. Dividing the Equity Value by the number of shares outstanding gives us the DCF Value of 35.9 USD per one PSTG share.

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How is DCF value calculated?

Alpha Spread forecasts a company's future cash flow and estimates the appropriate discount rate to calculate the DCF value of a stock.

1. Free cash flow forecasting

You can view the operating model used to estimate free cash flow in the "DCF Operating Model" block. You can change model inputs forecasted by our algorithm (such as revenue growth, margins, etc.) if you are a professional analyst and have your own opinion about them.
Click here to read more about FCF forecasting.

2. Calculating present value

Once free cash flow is forecasted, it is discounted at a risk-appropriate discount rate (which you can also change in the DCF settings). The resulting value is the present value of the company's free cash flow.

DCF Operating Model
Capital Structure
3. Calculating the value of equity

Depending on which type of operating model for the company our algorithm has chosen (equity or whole firm valuation model), the resulting value is either the value of equity or the value of the entire firm. In the case of the latter, to move from the value of the firm to the value of equity, liabilities are subtracted and assets are added. You can see these and subsequent steps in the block "Capital structure".

4. Calculating the DCF value of one stock

In order to come from the value of equity to the DCF value of one share, we only need divide the equity value by the number of shares outstanding.

See Also:
What is DCF valuation? What are valuation scenarios?
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