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What's in Store for Pure Storage (PSTG) in Q2 Earnings?
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Enterprise data storage firm Pure Storage, Inc. (PSTG - Free Report) is scheduled to report second-quarter fiscal 2017 (ended Jul 2016) results after the market closes on Aug 25. In the last reported quarter, earnings missed the Zacks Consensus Estimate by a penny. Over the trailing four quarters, the company missed earnings estimates twice with an average negative earnings surprise of 9.61%.
Let’s see how things are shaping up for this announcement.
Key Factors in the Second Quarter
Pure Storage enhanced its capabilities with the advancement of its new EvergreenStorage. The EvergreenStorage launched in early 2014, is a storage procurement and ownership model. The upgraded model will enable customers to acquire, run and non-disruptively improve storage using updated investment protection methods. Such enhancements in its existing products will help expand its customer base and augment its revenues.
During the quarter, the company was awarded the National Information Assurance Partnership (NIAP) Common Criteria Certification (Network Device Protection Profile) for its FlashArray//m and 400 series products, by the U.S. National Security Agency in collaboration with 25 other governments across the globe.
The company has also appointed Vik Nagjee as the company’s Vice President and Chief Technical Officerof its Global Healthcare Solutions. Pure Storage continues to focus on the development of products, solutions and business models, which is the key reason behind the appointment of Nagjee.
The data storage industry is touted as one of the hi-tech industries to watch out for in the coming years and is reportedly on the cusp of a revolutionary change. Storage systems, based entirely on flash chips similar to the ones used in smartphones, are expected to ultimately replace high-performance disk drive systems. With cutting-edge flash storage technology that is comparatively less expensive, Pure Storage is rapidly gaining traction and is likely to record healthy top and bottom-line growth in the to-be-reported quarter.
However, the company focuses on research and development, primarily upgrading its existing products, while also developing new ones. These upgradations and innovations come at a high cost. Such costs can be a drag on the company’s income in the to-be-reported quarter.
Our proven model does not conclusively show that Pure Storage will beat earnings estimates in this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. This is not the case here as you will see below:
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is pegged at 0.00%.
Zacks Rank: Pure Storage’s Zacks Rank #3, when combined with a 0.00% ESP, makes surprise prediction difficult.
Note that, we caution against stocks with Zacks Ranks #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat in the imminent future.
Dollar Tree, Inc. (DLTR - Free Report) , with an Earnings ESP of +4.11% and a Zacks Rank #2.
Sanderson Farms, Inc. , with an Earnings ESP of +4.96% and a Zacks Rank #1.
GameStop Corp. (GME - Free Report) , with an Earnings ESP of +3.85% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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What's in Store for Pure Storage (PSTG) in Q2 Earnings?
Enterprise data storage firm Pure Storage, Inc. (PSTG - Free Report) is scheduled to report second-quarter fiscal 2017 (ended Jul 2016) results after the market closes on Aug 25. In the last reported quarter, earnings missed the Zacks Consensus Estimate by a penny. Over the trailing four quarters, the company missed earnings estimates twice with an average negative earnings surprise of 9.61%.
Let’s see how things are shaping up for this announcement.
Key Factors in the Second Quarter
Pure Storage enhanced its capabilities with the advancement of its new EvergreenStorage. The EvergreenStorage launched in early 2014, is a storage procurement and ownership model. The upgraded model will enable customers to acquire, run and non-disruptively improve storage using updated investment protection methods. Such enhancements in its existing products will help expand its customer base and augment its revenues.
During the quarter, the company was awarded the National Information Assurance Partnership (NIAP) Common Criteria Certification (Network Device Protection Profile) for its FlashArray//m and 400 series products, by the U.S. National Security Agency in collaboration with 25 other governments across the globe.
The company has also appointed Vik Nagjee as the company’s Vice President and Chief Technical Officerof its Global Healthcare Solutions. Pure Storage continues to focus on the development of products, solutions and business models, which is the key reason behind the appointment of Nagjee.
The data storage industry is touted as one of the hi-tech industries to watch out for in the coming years and is reportedly on the cusp of a revolutionary change. Storage systems, based entirely on flash chips similar to the ones used in smartphones, are expected to ultimately replace high-performance disk drive systems. With cutting-edge flash storage technology that is comparatively less expensive, Pure Storage is rapidly gaining traction and is likely to record healthy top and bottom-line growth in the to-be-reported quarter.
However, the company focuses on research and development, primarily upgrading its existing products, while also developing new ones. These upgradations and innovations come at a high cost. Such costs can be a drag on the company’s income in the to-be-reported quarter.
PURE STORAGE Price and EPS Surprise
PURE STORAGE Price and EPS Surprise | PURE STORAGE Quote
Earnings Whispers
Our proven model does not conclusively show that Pure Storage will beat earnings estimates in this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. This is not the case here as you will see below:
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is pegged at 0.00%.
Zacks Rank: Pure Storage’s Zacks Rank #3, when combined with a 0.00% ESP, makes surprise prediction difficult.
Note that, we caution against stocks with Zacks Ranks #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat in the imminent future.
Dollar Tree, Inc. (DLTR - Free Report) , with an Earnings ESP of +4.11% and a Zacks Rank #2.
Sanderson Farms, Inc. , with an Earnings ESP of +4.96% and a Zacks Rank #1.
GameStop Corp. (GME - Free Report) , with an Earnings ESP of +3.85% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>