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Pure Storage (PSTG) Declines More Than Market: Some Information for Investors

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Pure Storage (PSTG - Free Report) closed at $88.90 in the latest trading session, marking a -2.16% move from the prior day. The stock's performance was behind the S&P 500's daily loss of 0.53%. Elsewhere, the Dow saw a downswing of 0.71%, while the tech-heavy Nasdaq depreciated by 0.93%.

The data storage company's shares have seen an increase of 2.91% over the last month, surpassing the Computer and Technology sector's gain of 1.25% and the S&P 500's gain of 1.13%.

The investment community will be paying close attention to the earnings performance of Pure Storage in its upcoming release. The company is predicted to post an EPS of $0.59, indicating a 18% growth compared to the equivalent quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $956.49 million, up 15.09% from the prior-year quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $1.97 per share and revenue of $3.62 billion, indicating changes of +16.57% and +14.22%, respectively, compared to the previous year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Pure Storage. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, there's been a 0.78% rise in the Zacks Consensus EPS estimate. Pure Storage is currently a Zacks Rank #3 (Hold).

With respect to valuation, Pure Storage is currently being traded at a Forward P/E ratio of 46.12. For comparison, its industry has an average Forward P/E of 18.34, which means Pure Storage is trading at a premium to the group.

We can additionally observe that PSTG currently boasts a PEG ratio of 2.74. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Computer- Storage Devices industry was having an average PEG ratio of 2.09.

The Computer- Storage Devices industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 66, positioning it in the top 27% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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