Why Pure Storage (PSTG) Outpaced the Stock Market Today

Pure Storage (PSTG) closed the most recent trading day at $61.05, moving +1.73% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.7%. Meanwhile, the Dow experienced a rise of 0.01%, and the technology-dominated Nasdaq saw an increase of 1.1%.

Shares of the data storage company have appreciated by 14.92% over the course of the past month, outperforming the Computer and Technology sector's gain of 8.26% and the S&P 500's gain of 4.03%.

Analysts and investors alike will be keeping a close eye on the performance of Pure Storage in its upcoming earnings disclosure. The company's earnings report is set to go public on May 29, 2024. In that report, analysts expect Pure Storage to post earnings of $0.22 per share. This would mark year-over-year growth of 175%. Alongside, our most recent consensus estimate is anticipating revenue of $681.37 million, indicating a 15.62% upward movement from the same quarter last year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.59 per share and a revenue of $3.13 billion, indicating changes of +11.97% and +10.5%, respectively, from the former year.

Investors might also notice recent changes to analyst estimates for Pure Storage. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. At present, Pure Storage boasts a Zacks Rank of #3 (Hold).

Digging into valuation, Pure Storage currently has a Forward P/E ratio of 37.8. Its industry sports an average Forward P/E of 26.6, so one might conclude that Pure Storage is trading at a premium comparatively.

One should further note that PSTG currently holds a PEG ratio of 1.94. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Computer- Storage Devices industry currently had an average PEG ratio of 1.57 as of yesterday's close.

The Computer- Storage Devices industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 29, putting it in the top 12% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow PSTG in the coming trading sessions, be sure to utilize Zacks.com.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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