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Pure Storage (PSTG) to Report Q3 Earnings: What's in Store?

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Pure Storage, Inc (PSTG - Free Report) is scheduled to report third-quarter fiscal 2023 results on Nov 30.

For the fiscal third quarter, management anticipates total revenues of $670 million, indicating year-over-year growth of 19%. The Zacks Consensus Estimate for revenues is pegged at $671.8 million, suggesting an increase of 19.4% on a year-over-year basis.

The Zacks Consensus Estimate for the fiscal third-quarter earnings is pegged at 26 cents per share. The company reported earnings of 22 cents per share in the prior-year quarter.

The company beat estimates in each of the last four quarters. It has a trailing four-quarter earnings surprise of 171.8%, on average.

Shares of Pure Storage have lost 5.1% in the past year against the sub-industry's decline of 21.5%.

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Factors to Note

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

Recently, the company rolled out updates for its Portworx portfolio to help enterprises simplify and accelerate Kubernetes adoption. Also, the introduction of Evergreen//Flex to further expand Pure’s Evergreen technology bodes well. The healthy adoption of Pure Fusion is likely to have favored the top-line performance.

The company is well-positioned to gain from the ongoing data explosion. The company is witnessing growing clout in FlashArray, FlashArray//C and FlashBlade, owing to their portability, efficiency and reliability over traditional storage systems. This, in turn, is likely to have boosted the top line in the to-be-reported quarter. The said storage systems provide customers with higher performance capabilities and enable them to run complex cloud workloads on a single platform.

Pure Storage continues to invest heavily in research and development to launch new products as well as enhance existing product lines. Earlier this year, it launched the improved FlashBlade//S solution powered by the company’s all-QLC modular architecture that delivers high levels of performance and capacity optimization without the need for caching solutions.

An expanded customer base (especially large enterprise clients) along with strength in commercial business bodes well. In the last reported quarter, Pure Storage added 350 new customers. The company’s customer base includes 56% of the Fortune 500 companies.

Strengthening of the U.S. dollar, widespread supply-chain disruptions, component shortages and related higher costs are likely to have exerted pressure on the margin performance. Higher expenses on product development amid stiff competition from other storage peers are added concerns.

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.

Splunk (SPLK - Free Report) has an Earnings ESP of +9.43% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Splunk is set to release third-quarter fiscal 2023 results on Nov 30. The Zacks Consensus Estimate for earnings is pegged at 23 cents per share, suggesting an increase of 162.2% from the prior-year quarter’s reported figure. Shares of SPLK have declined 37.3% in the past year.

Dollar General (DG - Free Report) has an Earnings ESP of +1.58% and a Zacks Rank of 2 at present.

Dollar General is set to release third-quarter 2022 results on Dec 1. The Zacks Consensus Estimate for earnings is pegged at $2.55 per share, suggesting an increase of 22.6% from the prior-year quarter’s levels. Shares of DG have increased 14.2% in the past year.

Coupa Software Incorporated (COUP - Free Report) has an Earnings ESP of +71.17% and a Zacks Rank of 2.

Coupa Software is scheduled to release third-quarter fiscal 2023 results on Dec 12. The Zacks Consensus Estimate for earnings is pegged at 11 cents per share, suggesting decline of 64.5% from the prior-year quarter’s levels. Shares of COUP have decreased 69% in the past year.

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

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