Everpure, Inc (P.N): Second Hyperscaler Win Drives Upside; Upgrade to Buy $118 TP

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11 Aug 2026 06:32:07 ET │ 14 pages

Everpure, Inc (P.N)

Second Hyperscaler Win Drives Upside; Upgrade to Buy $118 TP

CITI'S TAKE

On Monday, Everpure announced its second design win with a top-five

hyperscaler, following Meta win late CY24 – helping solidify its technology

(economic/operational/performance efficiencies) among hyperscale

workload providers. Everpure expects win to become revenue-meaningful

beginning FY28. We note hyperscaler revenues contribute high-margin

given licensing nature of wins. We emphasize significance of

announcement, as we were previously Neutral on uncertain timing of

highly-anticipated second win (now further validating its technology with

hyperscaler community) – which now allays that concern. With eSSD EB

estimated at 500+ EB in 2028, we believe this opens significant company

TAM which should sustain robust operating income momentum ahead. Our

FY28 hyperscale EB assumptions increase from 15EB to 26EB (~5% share),

driving upside to sales/GM ests given higher hyperscale margins (75% 85%). Our FY28 OpInc/EPS ests rise ~13%. Applying 32x PE NTM (from 28x,

reflecting higher peer comps and higher TAM), producing $118 TP from $90

prior.

Outside of this win, we also note recent commentary (notably CDW, IBM) is

constructive to the enterprise hardware and infrastructure spending spaces. Our

industry checks suggests that the underlying enterprise storage demand remains

fundamentally healthy with continued share gains noted while the guide appears

conservative enough and baking in possibility of a tougher demand environment,

even as enterprise spending patterns and customer activity remain favorable. The

outlook also factors in potential price fatigue, whereby customers could postpone

purchases, slow capacity expansions, or wait for storage pricing to become more

stable before making investment decisions. That said, these concerns are largely

precautionary and do not appear to be supported by current demand trends.

Additionally, Evergreen One, the company's consumption-based offering, could

help offset any potential demand headwinds by giving customers a more flexible

alternative to traditional hardware purchases.

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