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Pure Storage (PSTG) to Report Q1 Earnings: What's in Store?

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Pure Storage, Inc. (PSTG - Free Report) is set to report first-quarter fiscal 2021 results on May 28.

For the fiscal first quarter, the company expects revenues of approximately $365 million. The Zacks Consensus Estimate for revenues stands at $341.5 million, indicating an improvement of 4.5% from the prior-year quarter.

Meanwhile, the Zacks Consensus Estimate for the fiscal first-quarter bottom line is pegged at loss of 16 cents, compared with loss of 11 cents reported in the year-ago reported quarter. Markedly, the figure remained unchanged over the past 30 days.

Notably, the company beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters while missing the same once, the average beat being 34.12%.

Factors to Note

Pure Storage’s fiscal first-quarter performance is likely to have benefited from robust adoption of its FlashArray, FlashStack and FlashBlade offerings. Notably, in fourth-quarter fiscal 2020, the company added more than 500 customers, bringing the total count to more than 7,500 organizations.

Markedly, an expanding customer base has been instilling confidence in the stock. Shares of Pure Storage have returned 0.8% in the past year, against the industry’s decline of 8.4%.

Moreover, strength in its Pure1 META platform — which enables customers to forecast performance requirements to more accurately and timely provision of resources — might have driven fiscal first-quarter performance.

For the fiscal first quarter, the Zacks Consensus Estimate for Product revenues is pegged at $233 million compared with $376.5 million reported in the fiscal fourth quarter.

Further, Pure Storage, currently carrying a Zacks Rank #3 (Hold), is likely to have gained from solid traction of Pure as-a-Service, Cloud Block Store, and Evergreen subscription services in the quarter to be reported. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Additionally, incremental adoption of the company’s latest flash and cloud-based ObjectEngine solution might get reflected in the fiscal first-quarter revenues. Notably, ObjectEngine enables users to access required data in real time through a faster and secure medium.

Moreover, the coronavirus pandemic-induced work-from-home wave that has led to increasing adoption of cloud-based storage might have driven adoption of Pure Storage’s hybrid multi-cloud offerings and cloud data services. It is expected to have positively influenced fiscal first-quarter performance.

However, growing expenses on product development amid stiff competition from fellow storage peers including NetApp (NTAP - Free Report) might have limited margin expansion in the fiscal first quarter.

Also, broader weakness in macroeconomic environment triggered by coronavirus crisis has been compelling enterprises to trim capital expenditure, which is expected to have affected Pure Storage’s business in the to-be reported quarter.

Pure Storage, Inc. Price and EPS Surprise

Pure Storage, Inc. Price and EPS Surprise

Pure Storage, Inc. price-eps-surprise | Pure Storage, Inc. Quote

Key Developments in Q1

Pure Storage rolled out third-generation all-NVMe FlashArray//X to aid customers with higher performance capabilities and enable faster time-to-market.

During the fiscal first quarter, Pure Storage strengthened its Cloud Data Services portfolio to aid customers to deploy hybrid clouds effectively. The company expanded partnership with Alphabet’s (GOOGL - Free Report) cloud-computing arm, Google Cloud, and joined Google Cloud's Anthos Ready Storage Initiative.

Further, the company expanded its partnership with SAP (SAP - Free Report) to drive better business outcomes for customers through joint technical support and deeper technology integrations between the two companies. Markedly, Pure Storage's FlashArray product, which is certified for SAP HANA, will aid customers and service providers to deploy mission critical SAP workloads, and drive business value.

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