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Pure Storage (PSTG) Announces Upbeat Q3 Preliminary Results

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Pure Storage, Inc (PSTG - Free Report) recently reported preliminary data for third-quarter 2021 revenues. Management expects preliminary fiscal third quarter revenues to be $410 million.

Continued strength seen in uptake of Pure Storage’s subscription services is likely to have driven the top line in the third quarter. Subscription services comprise of revenue contribution from Evergreen subscription along with contribution from unified subscription services.  Unified subscription services are inclusive of Pure as-a-Service and Cloud Block Store.

The company is also likely to benefit from strength in FlashArray and FlashBlade businesses on the back of existing customers and new additions.

The upbeat preliminary results augur well for the upcoming earnings release, as it hints toward upward estimate revisions and plausible revenue beat. Markedly, Pure Storage is scheduled to report third-quarter fiscal 2021 results on Nov 24, 2020.

Currently, the Zacks Consensus Estimate for fiscal third quarter revenues is pegged at $404 million that indicates year-over-year decline of 5.7%.

Pure Storage also announced that Dominick Delfino was appointed as the company’s chief revenue officer (CRO) as well as Global Head of Sales. Also, the company noted that chief operating officer Paul Mountford was stepping down from position.

A Look at Previous Q3 Guidance Commentary

In second-quarter fiscal 2021 conference call, management did not provide any formal fiscal third-quarter guidance citing uncertainty in demand stemming from coronavirus crisis.

Nevertheless, management noted that it expects fiscal third-quarter revenues to remain flat on a quarter-over-quarter basis. In the fiscal second quarter of 2021, Pure Storage reported revenues of $403.7 million.

Momentum in Cloud Bodes Well

Pure Storage has significant growth opportunity considering that implementation of multi-cloud model and cloud-based storage solutions is gaining mainstream adoption. The utilization cloud and cloud-based storage solutions help enterprises to achieve improved scalability and better resource consumption.

The company’s cloud storage solutions, including Cloud Block Store, ObjectEngine Cloud, and CloudSnap are likely to benefit from this trend. Also, the buyout of Portworx will enhance Putre Storage’s presence in the cloud storage space and drive revenues in the long haul.

Per a Mordor Intelligence report, the cloud storage market is envisioned to reach $170.02 billion by 2025 at a CAGR of 24.74% between 2020 and 2025.

Zacks Rank & Key Picks

Currently, Pure Storage carries a Zacks Rank #3 (Hold).

Some better-ranked stocks worth considering in the broader sector are CDW Corporation (CDW - Free Report) , Corning (GLW - Free Report) , Avnet (AVT - Free Report) . All flaunt a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for CDW, Corning and Avnet is pegged at 13.1%, 2.8%, and 19%, respectively.

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