Pure Storage Stock Falls Despite Beat-And-Raise Earnings Report

Enterprise data storage company Pure Storage (PSTG) topped analyst estimates for its fiscal second quarter and provided a sales outlook above views for the current period. But PSTG stock fell on Thursday.


The Santa Clara, Calif.-based company late Wednesday said it earned an adjusted 34 cents a share on sales of $688.7 million for the quarter ended Aug. 6. Analysts polled by FactSet had expected Pure Storage earnings of 28 cents a share on sales of $682 million. Year over year, Pure Storage earnings and sales both advanced 6%.

For the current quarter, Pure Storage predicted sales of $760 million, up 12% from the same period last year. Wall Street had called for sales of $757 million in the fiscal third quarter.

For the full fiscal year, Pure Storage forecast sales growth in the mid- to high-single-digit percentages. Analysts were looking for sales growth of 7% to $2.95 billion.

PSTG Stock Gets Price-Target Hikes

In morning trades on the stock market today, PSTG stock dropped 4.1% to 34.97. During the regular session Wednesday, PSTG stock rose 0.4% to close at 36.48. Pure Storage notched its all-time high of 39.19 on July 19.

At least seven Wall Street firms raised their price targets on PSTG stock after the company’s earnings report.

Susquehanna Financial Group analyst Mehdi Hosseini reiterated his positive rating on PSTG stock and upped his price target to 45 from 44.

Pure Storage is “well positioned to ride out the weak IT spend environment” through 2023 and into 2024, he said in a note to clients.

Also, Pure Storage has an opportunity to take market share from legacy data storage technologies as enterprises upgrade their systems to handle artificial intelligence applications, Hosseini said.

Pure Storage Is No. 1 In Industry Group

“Customers have responded enthusiastically to Pure’s new ability to satisfy all of their data storage needs on a single, consistent, flash data-storage and management platform,” Chief Executive Charles Giancarlo said in a news release.

Chief Financial Officer Kevan Krysler highlighted record sales across the company’s FlashBlade portfolio. Also, Pure Storage doubled subscription sales year over year for its Evergreen//One offering, he said in the release.

Pure Storage ranks first out of 10 stocks in IBD’s Computer-Data Storage industry group, according to IBD Stock Checkup. Shares have an IBD Composite Rating of 91 out of 99.

Further, PSTG stock is on the IBD Tech Leaders list.

Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.


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