During the October 1 episode of Mad Money, Jim Cramer reviewed the previous quarter’s S&P 500 strongest performers and discussed Everpure, Inc. (NYSE:P). He said:
On the first day of a brand new quarter, October 1, you need a compass. You know what provides you the best compass? What can navigate you the best? Last quarter… We all use S&P 500 as our benchmark in this business. Now, the index finished up 2.03% for the third quarter. Not bad, not great… Everpure, up 66%. Turns out, Everpure is pure storage, a data storage company except for this quarter, it’s become a hyperscaler play. Meta chose Everpure to handle some of its storage. Others may choose it, too. The stock’s had a miraculous run. I wouldn’t be surprised if it’s got more upside.
It is worth noting that the company became a part of S&P 500 in September.
Another Hyperscaler Win And A Higher Growth Outlook
Everpure, Inc. has expanded its hyperscale business beyond the relationship highlighted by Cramer. On August 10, the company announced a design win with a second top-five hyperscaler for its DirectFlash technology. Its fiscal second-quarter 2027 results also showed remaining performance obligations rising 44% year-over-year to approximately $4.1 billion, while subscription annual recurring revenue increased 20% to approximately $2.1 billion.
Management provided a further update on September 23, maintaining its fiscal 2027 revenue forecast of $5.03 billion to $5.07 billion and introducing a preliminary fiscal 2028 outlook of $7 billion to $7.3 billion. The latter represents expected growth of 39% to 45%. Non-GAAP operating income is projected to reach $1.7 billion to $1.9 billion in fiscal 2028, compared with guidance of $940 million to $960 million for fiscal 2027. These are management forecasts, rather than contracted revenue. We recently discussed the price target revisions after the company’s analyst day.
Cash Outflows And a Premium to Storage Peers
The expansion has come along with weaker quarterly cash generation. Everpure, Inc. reported negative operating cash flow of approximately $136 million and negative free cash flow of approximately $238 million in its fiscal second quarter 2027. Its GAAP operating margin was 5.3%, compared with a non-GAAP margin of 19.4%. The company’s September 23 release identified uncertainties around component supply, NAND pricing, and the timing and size of large orders, including hyperscaler purchases.
The valuation also carries a substantial premium. The stock trades at a forward earnings multiple of approximately 45x for Everpure, compared with approximately 21.4x for storage competitor NetApp. The companies have different growth profiles, but the comparison places Everpure, Inc. well above an established storage peer on expected earnings.
More Funds Take Positions
Insider Monkey’s database tracking more than 1,000 hedge funds showed 51 funds holding Everpure, Inc. at the end of Q2, up from 47 in the preceding quarter. Renaissance Technologies was the company’s top hedge fund holder during the second quarter with. Short interest represented 2.88% of the public float as of mid-September.
Cramer’s optimism takes hyperscaler demand into consideration. Everpure has since documented a second major customer win and issued a higher long-term revenue outlook, while quarterly cash outflows and its valuation premium remain counterweights to that growth case.
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