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Pure Storage (PSTG) to Post Q4 Earnings: What's in Store?

Pure Storage, Inc. PSTG is scheduled to report fourth-quarter fiscal 2021 results on Feb 24.

The company refrained from providing formal fiscal fourth-quarter guidance citing uncertainty in demand due to COVID-19-related business impact. Nevertheless, management anticipates that total revenues to decline 2% on a year-over-year basis to approximately $480 million.

The Zacks Consensus Estimate for fiscal fourth-quarter revenues stands at $480.5 million, suggesting a decline of 2.3% on a year-over-year basis.

Pure Storage, Inc. Price and EPS Surprise

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

Meanwhile, the Zacks Consensus Estimate for the fiscal fourth-quarter earnings is unchanged over the past 30 days at 9 cents, indicating a decline of 60.9% on a year-over-year basis.

Factors to Note

Pure Storage’s fiscal fourth-quarter results are likely to reflect the impact of coronavirus crisis induced broader macroeconomic weakness, which has been compelling enterprises to trim IT spend.

Nevertheless, gains from solid uptake of cloud storage solutions, including Cloud Block Store, ObjectEngine Cloud, and CloudSnap may have favored the to-be-reported quarter’s performance.

Further, adoption of new remote install options for FlashArray and FlashBlade, which enable the installation of systems with limited personnel amid ongoing coronavirus crisis-induced social distancing norms, might have contributed to the to-be-reported quarter’s performance.

During the fiscal fourth quarter, Pure Storage expanded its Pure as-a-Service suite of offerings, in a bid to improve transparency of service selections and boost adoption. The company also announced the availability of Pure as-a-Service in AWS (or Amazon Web Services) Marketplace in order to aid enterprises to simplify storage deployment.

Markedly, the company stated that Portworx by Pure Storage received the AWS Outposts Ready designation after displaying successful integration with AWS Outposts deployments’ service.

Moreover, gains from incremental adoption of its second generation FlashArray//C — a cost effective storage array solution to provide customers with higher performance capabilities and enable them to run complex cloud workloads onto a single platform — in a bid to capitalize on growing clout of flash-based offerings is likely to have acted as a tailwind.

Besides, improvements to its VMWare’s VMW cloud portfolio for offerings including vSphere Virtual Volumes with VMware Cloud Foundation, Cloud Native Storage for Kubernetes on VMware, VMware Site Recovery Manager and NVMe over Fabric, are expected to have accelerated the deployment of its hybrid cloud offerings.

Also, synergies from Portworx acquisition in a bid to expand its cloud-services solutions for Kubernetes technology may have contributed to the fiscal fourth-quarter performance.

Furthermore, Pure Storage might have gained from solid traction of latest subscription-based Evergreen and Modern Data Experience solutions in the quarter to be reported. The robust adoption of latest subscription services is anticipated to have driven profitability in the quarter to be reported.

Likewise, strength in its Pure1 META platform — that enables customers to forecast performance requirements to more accurately and timely provision of resources — might get reflected in the fiscal fourth-quarter results.

Additionally, the coronavirus pandemic-induced work-from-home, online learning and tele-healthcare 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 the fiscal fourth-quarter performance.

Notably, in third-quarter fiscal 2021, the company added more than 315 customers, bringing the total count to more than 8,400 organizations. The momentum is likely to have continued and contributed to revenues in the fiscal fourth quarter.

Pure Storage currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In fact, Halifax Health is leveraging its solutions to streamline clinical workflows and drive better patient outcomes.

However, growing expenses on product development and acquisitions amid stiff competition from storage peers including NetApp NTAP and Dell Technologies DELL might have limited margin expansion in the fiscal fourth quarter.

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