Pure Storage (PSTG) Up 10% as Guidance Comes Ahead of Expectations, Analysts Bulled-up

Shares of Pure Storage (NYSE: PSTG) are up nearly 10% in premarket trading Thursday after the company published an FY revenue guidance that topped analyst estimates.

PSTG reported Q1 adjusted EPS of 25c, compared to $0 in the year-ago period and above the analyst consensus of 4.2c per share. Revenue came in at $620.4 million, up 50% YOY and beating the consensus projection of $522 million.

Looking ahead, the technology company expects Q2 revenue of roughly $635 million, while analysts were looking for $604.4 million. Pure Storage estimates Q2 adjusted operating income to be around $75 million, also above the consensus estimates of $57.4 million. The Q2 adjusted operating margin is expected to be around 11.8%, while analysts were estimating 9.57%.

For the full fiscal year of 2023, Pure Storage expects around $2.66 billion in revenue, up from the previous forecast of $2.6 billion, and above the analyst expectations of $2.61 billion. The company expects FY adjusted operating income of about $320 million, up from $300 million, and compared to the analyst consensus of $300.8 million.

The Mountain View, California-based company expects FY adjusted operating margin to be around 12%, compared to the previous forecast of 11.5%, which is also what analysts expected.

Goldman analyst Rod Hall maintained a Buy rating and a $50.00 price target after a “solid” quarter.

“Pure reported a solid quarter with a 19% revenue beat vs consensus and strong margins.. We also see ongoing strong results as an indication that Pure's products are gaining an increasing following among enterprise and service provider customers. We reiterate our Buy rating and would expect the stock to trade up on these results,” Hall said.

Stifel analyst Matthew Sheerin also maintained a Buy rating following yet another beat-and-raise quarter.

“Pure continues to gain share among large enterprise customers, and is now engaged with 54% of F500 customers. Management believes customers' increasing focus on sustainability, lower power consumption and reducing waste is a key reason it is gaining share, given Pure's best-in-class hardware and software solutions,” Sheerin wrote in a note.

By Senad Karaahmetovic

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