Enterprise data storage firm Pure Storage, Inc.PSTG is scheduled to report first-quarter fiscal 2017 results after the market closes on May 25. The company matched earnings estimates in the last reported quarter after woefully missing its debut earnings in the quarter before it. Let's see how things are shaping up for this announcement.
Key Factors in the First Quarter
Pure Storage has expanded its capabilities with OpenStack, a free and open-source software platform for cloud computing, enabling customers to benefit from faster deployment of cloud services and increased efficiency at lower costs. The company has developed ideal plug-in system for customers, who utilize high-performance applications, to unlock high storage bandwidth. Such innovative products expand its customer base and augment its revenues.
Pure Storage is widely recognized for its industry-leading management capabilities with Pure1, a global cloud-based storage management platform. Pure1 is fully integrated with telemetrics tracked at the individual system that facilitates round-the-clock predictive support for its clients.
Exhibiting continued channel momentum, the company recorded a significant increase in channel partner sales adoption of Pure Storage. The all-flash storage feature of Pure Storage is expected to further accelerate client businesses and have immediate impact on the customers. With improved performance, increased operational efficiency and superior application development, Pure Storage is likely to report solid earnings in the impending quarter.
The data storage industry is touted as one of the hi-tech industries to watch out for in the coming years and is reportedly on the cusp of a revolutionary change. Storage systems, based entirely on flash chips - similar to the ones used in smartphones, are expected to ultimately replace high-performance disk drive systems. With cutting-edge flash storage technology that is comparatively less expensive, Pure Storage is rapidly gaining traction and is likely to record healthy top and bottom line growth in the soon-to-be-reported quarter.
Our proven model does not conclusively show that Pure Storage will beat earnings estimate in this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. This is not the case here as you will see below:
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is pegged at 0.00%.
Zacks Rank: Pure Storage's Zacks Rank #3, when combined with a 0.00% ESP, makes surprise prediction difficult. Note that, we caution against stocks with Zacks Ranks #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat in the imminent future.
Nordson Corporation NDSN , earnings ESP of +2.15% and a Zacks Rank #3.
Worthington Industries, Inc. WOR , earnings ESP of +6.35% and a Zacks Rank #3.
Dave & Buster's Entertainment, Inc. PLAY , earnings ESP of +3.39% and a Zacks Rank #1.
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