Netlist (OTCMKTS:NLST) and Pure Storage (NYSE:PSTG) Financial Review

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Netlist	-33.07%	N/A	-110.40%
Pure Storage	3.93%	13.98%	4.91%

Earnings & Valuation

This table compares Netlist and Pure Storage”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Netlist	$147.10 million	1.27	-$53.87 million	($0.18)	-3.56
Pure Storage	$3.17 billion	5.62	$106.74 million	$0.37	147.29

Pure Storage has higher revenue and earnings than Netlist. Netlist is trading at a lower price-to-earnings ratio than Pure Storage, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Netlist has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500. Comparatively, Pure Storage has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Institutional & Insider Ownership

0.0% of Netlist shares are held by institutional investors. Comparatively, 83.4% of Pure Storage shares are held by institutional investors. 2.7% of Netlist shares are held by company insiders. Comparatively, 5.6% of Pure Storage shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Netlist and Pure Storage, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Netlist	0	0	1	0	3.00
Pure Storage	1	5	14	0	2.65

Netlist presently has a consensus price target of $2.00, suggesting a potential upside of 212.50%. Pure Storage has a consensus price target of $69.95, suggesting a potential upside of 28.35%. Given Netlist’s stronger consensus rating and higher possible upside, research analysts plainly believe Netlist is more favorable than Pure Storage.

Summary

Pure Storage beats Netlist on 12 of the 14 factors compared between the two stocks.

About Netlist

Netlist, Inc. designs, manufactures, and markets memory subsystems for the server, high-performance computing, and communications markets in the United States and internationally. The company portfolio of proprietary technologies and design techniques, includes efficient planar design, alternative packaging techniques, and custom semiconductor logic, to deliver memory subsystems; and sells specialty memory modules and flash-based products for use in data center and industrial applications. It resells component products, including solid state drive (SSD), NAND flash, and dual inline memory module (DIMM) to storage customers, appliance customers, system builders, and cloud and datacenter customers; and sells component inventory to distributors and other users of memory integrated circuits. The company markets and sells its products through a direct sales force and a network of independent sales representatives. Netlist, Inc. was incorporated in 2000 and is headquartered in Irvine, California.

About Pure Storage

Pure Storage, Inc. engages in the provision of data storage and management technologies, products, and services in the United States and internationally. Its Purity software is shared across its products and provides enterprise-class data services, such as always-on data reduction, data protection, and encryption, as well as storage protocols, including block, file, and object. The company also provides FlashArray integrated hardware systems, including FlashArray//X, FlashArray//C, FlashArray//XL, FlashArray//E, and FlashArray File Services for block-oriented storage, addressing databases, applications, virtual machines, and other traditional workloads; and FlashBlade integrated hardware systems comprising FlashBlade//S and FlashBlade//E for managing and processing unstructured data workloads of various types from real-time log analytics and commercial high-performance computing (HPC) to data protection and recovery. In addition, it offers cloud-native storage solutions, such as Portworx by Pure Storage, a cloud-native Kubernetes data management solution; and Portworx Data Services, a Database-as-a-Service platform for Kubernetes. Further, the company provides Pure Fusion, a Software-as-a-Service (SaaS) management plane, which enables storage administrators to unify storage arrays and optimize storage pools; Evergreen Architecture comprising Pure1, an AI-driven cloud-based management platform, as well as Evergreen//One and Evergreen//Flex data storage solutions; and Cloud Block Store, a virtual block storage array, that provides customers the flexibility to operate a hybrid cloud model with seamless data mobility across on-premises and public cloud environments. It sells its products and subscription services through direct sales force and channel partners. The company was formerly known as OS76, Inc. and changed its name to Pure Storage, Inc. in January 2010. Pure Storage, Inc. was incorporated in 2009 and is headquartered in Santa Clara, California.