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Pure Storage (PSTG) Gains As Market Dips: What You Should Know

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In the latest trading session, Pure Storage (PSTG - Free Report) closed at $31.07, marking a +0.94% move from the previous day. This change outpaced the S&P 500's 0.89% loss on the day. At the same time, the Dow lost 0.63%, and the tech-heavy Nasdaq lost 0.26%.

Heading into today, shares of the data storage company had gained 17.03% over the past month, outpacing the Computer and Technology sector's gain of 10.6% and the S&P 500's gain of 11.42% in that time.

Wall Street will be looking for positivity from Pure Storage as it approaches its next earnings report date. This is expected to be November 30, 2022. On that day, Pure Storage is projected to report earnings of $0.26 per share, which would represent year-over-year growth of 18.18%. Our most recent consensus estimate is calling for quarterly revenue of $671.84 million, up 19.39% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.18 per share and revenue of $2.75 billion, which would represent changes of +63.89% and +26.17%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Pure Storage. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Pure Storage currently has a Zacks Rank of #2 (Buy).

Looking at its valuation, Pure Storage is holding a Forward P/E ratio of 26.05. This valuation marks a premium compared to its industry's average Forward P/E of 16.87.

Investors should also note that PSTG has a PEG ratio of 0.73 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer- Storage Devices was holding an average PEG ratio of 0.74 at yesterday's closing price.

The Computer- Storage Devices industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 40, which puts it in the top 16% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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