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Factors to Note Ahead of Pure Storage's (PSTG) Q1 Earnings

·5 min read

Pure Storage, Inc PSTG is scheduled to report first-quarter fiscal 2023 results on Jun 1.

For the fiscal first quarter, management anticipates total revenues of $520 million, indicating year-over-year growth of 26%. The Zacks Consensus Estimate for revenues is pegged at $522.7 million, suggesting an increase of 26.7% on a year-over-year basis.

The Zacks Consensus Estimate for the fiscal first-quarter earnings is pegged at 4 cents per share. The company reported breakeven earnings in the prior-year quarter.

The company beat estimates in all of the last four quarters. It has a trailing four-quarter earnings surprise of 99.2%, on average.

Shares of Pure Storage have surged 30% in the past year against the industry's decline of 8.6%.

Pure Storage, Inc. Price and EPS Surprise

 

Pure Storage, Inc. Price and EPS Surprise
Pure Storage, Inc. Price and EPS Surprise

Pure Storage, Inc. price-eps-surprise | Pure Storage, Inc. Quote

 

Factors to Note

The accelerated migration to private and hybrid cloud infrastructure and increasing usage of flash solutions in data centers are driving demand for Pure Storage’s solutions. The remote/hybrid work setup due to the COVID-19 crisis is likely to have driven the adoption of Pure Storage’s hybrid multi-cloud offerings and cloud data services.

Continued momentum in its subscription services, namely Pure as-a-Service subscription (includes Cloud Block Store), Portworx and Evergreen Storage, are likely to have boosted Pure Storage’s fiscal first-quarter performance.

Portworx specializes in Kubernetes data services and offers its customers extensive data protection. It also provides cloud mobility for containers running on hybrid clouds.

Incremental gains from the healthy uptake of FlashArray and FlashBlade — particularly the second-generation FlashArray//C (an all-QLC flash array) solutions — might have acted as a tailwind. FlashArray//C is a cost-effective storage array solution that offers enhanced performance capabilities and helps clients run complex cloud workloads on a single platform.

The company is likely to benefit from the strong adoption of its recently launched new products and services. Some recently-launched products/services include Purity upgrades for ransomware and disaster recovery, additions to FlashArray//C series, FlashStack as a service, Pure Fusion, Portworx Data Services and FlashArray//XL.

The new FlashArray//XL solution is primarily designed for vital enterprise applications like huge databases, cloud-native and containerized applications. The new FlashArray solution safeguards the stored data and enables easy recovery following any adverse situation. FlashArray//XL solution facilitates workload consolidation on lesser arrays, streamlines operations and lowers rack-space requirements. It also helps slash power consumption and cooling expenses.

A higher customer base (especially large enterprise clients) along with strength in commercial business bodes well. In the last reported quarter, Pure Storage added 470 new customers, ending the quarter with a customer count of more than 10,0000, including 50% of the Fortune 500 companies.

Higher expenses on product development amid stiff competition from other storage peers might have limited margin expansion in the to-be-reported quarter.

Pandemic-induced widespread supply chain disruptions, component shortages and related higher costs are likely to have exerted pressure on fiscal first-quarter margins.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Pure Storage has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks that you may consider as our model shows that these have the right combination of elements to beat on earnings this season.

Designer Brands DBI has an Earnings ESP of +4.35% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Designer Brands is set to release first-quarter fiscal 2022 results on Jun 2. The Zacks Consensus Estimate for earnings is pegged at 23 cents per share, suggesting an increase of 92% from the prior-year quarter’s reported figure. Shares of DBI have decreased 10.8% in the past year.

Veeva Systems VEEV has an Earnings ESP of +0.36% and a Zacks Rank of 2 at present.

Veeva Systems is scheduled to release first-quarter fiscal 2023 results on Jun 1. The Zacks Consensus Estimate for earnings is pegged at 92 cents per share, suggesting an increase of 1.1% from the prior-year quarter’s levels. Shares of VEEV have decreased 39.7% in the past year.

Casey General Stores CASY has an Earnings ESP of +0.38% and a Zacks Rank of 3.

Casey General Stores is scheduled to release fourth-quarter fiscal 2022 results on Jun 7. The Zacks Consensus Estimate for earnings is pegged at $1.54 per share, up 37.5% from the year-ago quarter’s levels. Shares of CASY have declined 3.6% in the past year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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