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Factors Setting the Tone for Pure Storage (PSTG) Q3 Earnings

Pure Storage, Inc. PSTG is set to report third-quarter fiscal 2020 results on Nov 21.

For the fiscal third quarter, Pure Storage expects revenues in the range of $434-$446 million. The Zacks Consensus Estimate for revenues is pegged at $440.6 million, indicating an improvement of 18.2% from the prior-year quarter.

Meanwhile, the Zacks Consensus Estimate for the fiscal third quarter earnings is pegged at 8 cents, suggesting a decline of 38.5% year over year.

Notably, the company beat the Zacks Consensus Estimate for earnings in two of the trailing four quarters and lagged the same in the remaining two, the average beat being 27.43%.

In the fiscal second quarter, the company's reported non-GAAP earnings of 1 cent per share against the Zacks Consensus Estimate of a loss of 4 cents. Total revenues of $396.3 million surpassed the Zacks Consensus Estimate by 17.3%.

Factors Likely to Influence Q3 Results

Pure Storage’s fiscal third-quarter performance is likely to have benefited from robust adoption of its FlashArray, FlashStack and FlashBlade offerings. Notably, in the fiscal second quarter, the company’s total customer base reached more than 6,600 organizations.

Moreover, incremental adoption of the company’s latest flash and cloud-based ObjectEngine solution is likely to have driven the fiscal third-quarter top line. Notably, ObjectEngine enables users to access required data in real time through a faster and secure medium.

During the fiscal third quarter, Pure Storage strengthened its Cloud Data Services portfolio to aid customers to deploy hybrid clouds effectively. The new offerings facilitate deployment of applications on Amazon’s cloud computing platform, Amazon Web Services (AWS) in a cost-effective manner.

Additionally, strength in its Pure1 META platform — which enables customers to forecast performance requirements to more accurately and timely provision of resources — is likely to have driven fiscal third-quarter revenues.

Pure Storage, Inc. Price and EPS Surprise


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

However, growing expenses on product development amid stiff competition from fellow storage peers including NetApp, is likely to have limited margin expansion in the fiscal third quarter.

What Our Model Says

According to the Zacks model, a company has a good chance of beating estimates if it has a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Although Pure Storage has a Zacks Rank #3, an Earnings ESP of 0.00% makes surprise prediction difficult. 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 you may consider, as our proven model shows that these have the right mix of elements to beat estimates this time:

Hewlett Packard Enterprise Company HPE has an Earnings ESP of +8.70% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Burlington Stores, Inc. BURL has an Earnings ESP of +2.75% and a Zacks Rank of 2.

Adobe Systems Incorporated ADBE has an Earnings ESP of +0.12% and a Zacks Rank of 2.

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