Pure Storage: Extra Upside Potential?


Pure Storage Inc. is an American expertise firm based in 2009, which engages in growing all-flash knowledge storage {hardware} and software program merchandise. Its expertise has changed conventional storage methods in the previous couple of many years, specifically mechanical disks, on the identical time optimizing end-to-end for solid-state reminiscence.

Fig.1: Reported Gross sales and EPS versus Analyst Forecast for Pure Storage. Supply: cash.cnn

The corporate is because of report its Q2 2022 earnings ends in simply over two weeks (25th Aug). However, on the whole it’s doing a formidable efficiency in comparison with the earlier 12 months, with complete gross sales hitting $2.2B in Q1, exceeding analyst forecast at $2.1B. Its gross sales jumped practically 30% in comparison with these in 2020. This has resulted in an EPS of $0.72, 3 times greater than in 2020.

Pure Storage didn’t disappoint within the first quarter of 2022. Reported gross sales had been $620.4M vs consensus estimates at $521.7M. EPS final stood at $0.25, far exceeding analyst forecast which had been $0.04. In response to the administration, its dedication to sustainability (drive out direct power utilization in knowledge storage methods by as much as 80%), market-leading portfolio innovation (Pure Fusion and Portworx Knowledge Companies that permit prospects to carry infrastructure and purposes nearer along with cloud-like automation and storage supply for conventional and cloud-native purposes; FlashBlade for Distributed Scale Out File Storage which is simple to make use of, constant efficiency at scale and constructive buyer expertise), and partnerships with a couple of corporations like Snowflake, Kyndryl and even Amazon (AWS) are the keys for Pure Storage to be a number one pioneer in IT sector.

For the upcoming earnings announcement, the administration has supplied an optimistic steerage, with income anticipated to hit approx. $635M, whereas Non-GAAP working revenue is predicted to rise to $75M. Market consensus is constructive too, with Gross sales anticipated to hit 636.2M, up 2.55% from the earlier quarter and up 28.06% from the identical interval final 12 months. EPS is predicted to hit $0.22, barely down from the earlier quarter’s $0.25, however up 57.14% from the identical interval final 12 months. In response to Zacks Consensus Estimates, Pure Storage “boasts a median earnings shock of 205.4%”. Maybe Zacks’ findings similar to strong earnings fundamentals, good VGM and momentum rating, and a wholesome monetary situation along with components listed within the earlier paragraph are what makes Pure Storage an fascinating candidate to test upon for the long run.

Technical Evaluation:

#Purestorage stays traded above $29.21, or FR 50.0% which prolonged from the March excessive ($36.70) to Might low ($21.72). $29.00 is the low estimate of analysts. The inventory worth has been on its positive factors for 5 consecutive weeks. If bullish momentum persists, the closest resistance to look at is $31.00, adopted by $33.50 and $36.70. Alternatively, if worth breaks beneath present ranges, the 100-day SMA shall be challenged, adopted by $27.45, $25.25 and $21.72.

Click on right here to entry our Financial Calendar

Larince Zhang

Market Analyst – HF Instructional Workplace

Disclaimer: This materials is supplied as a common advertising communication for info functions solely and doesn’t represent an impartial funding analysis. Nothing on this communication comprises, or needs to be thought of as containing, an funding recommendation or an funding advice or a solicitation for the aim of shopping for or promoting of any monetary instrument. All info supplied is gathered from respected sources and any info containing a sign of previous efficiency isn’t a assure or dependable indicator of future efficiency. Customers acknowledge that any funding in Leveraged Merchandise is characterised by a sure diploma of uncertainty and that any funding of this nature entails a excessive degree of danger for which the customers are solely accountable and liable. We assume no legal responsibility for any loss arising from any funding made based mostly on the knowledge supplied on this communication. This communication should not be reproduced or additional distributed with out our prior written permission.


Please enter your comment!
Please enter your name here