Is Pure Storage, Inc. overvalued or undervalued?

As of 7 July 2025, the valuation grade for Pure Storage, Inc. has moved from fair to very expensive, indicating a significant shift in its valuation outlook. The company appears overvalued, with a P/E ratio of 142, a Price to Book Value of 14.54, and an EV to EBITDA of 74.42, all of which are considerably higher than its peers. For instance, Seagate Technology Holdings has a P/E of 26.40 and Western Digital Corp. boasts an EV to EBITDA of 10.54, highlighting the premium that Pure Storage commands relative to its industry competitors.
Despite its high valuation, Pure Storage has delivered impressive stock performance, with a 1-year return of 76.66% compared to the S&P 500's 17.14%, and a staggering 5-year return of 501.24% against the S&P 500's 96.61%. This strong performance may reflect investor optimism, but the elevated valuation ratios suggest that the stock may not be sustainable at these levels.