Agilent to Report Q4 Earnings: What's in the Cards for the Stock?

Over the past two years, artificial intelligence (AI) stocks have continued to attract investors' attention - but not all of them have delivered staggering returns to shareholders. The "Magnificent 7" have led the charge, with Nvidia posting an impressive 857% gain since late 2022. However, other companies are rapidly establishing their presence in the AI realm, positioning themselves to potentially become trillion-dollar giants.

Among these emerging contenders, Pure Storage is a data storage firm that's starting to gain attention for its AI-driven innovations and strategic partnerships. Recently, the company has attracted bullish commentary from analysts at Oppenheimer, with the firm saying it expects Pure Storage to snag market share from industry giants like HP Enterprise and Dell over the longer term.

For investors in search of growth opportunities in the still-booming AI industry, here's a closer look at PSTG stock.

About Pure Storage Stock

Based in California, Pure Storage is a leading advanced data storage platform provider that stores, manages, and protects data at any scale. Specializing in all-flash data storage solutions, the company has positioned itself at the forefront of the AI revolution. Its flash-based technology delivers faster data processing, scalability, and reliability, which is critical for managing the massive, data-intensive workloads required by AI and machine learning applications.

As AI technologies continue to evolve and generate vast volumes of data, Pure Storage's all-flash storage array solutions provide the high-speed, reliable infrastructure businesses need to accelerate their AI initiatives, solidifying their role as key players in the data storage landscape.

With a market cap of $16.3 billion, shares of PSTG have rallied 44.6% YTD, outperforming the broader S&P 500 Index's 24.7% rise in the same period. However, PSTG stock has pulled back 26% from its June high, allowing investors to buy the dip at current levels.

In terms of valuation, Pure Storage is priced for growth, at 26.6 times forward adjusted earnings estimates for fiscal 2026, and 4.63 times forward sales.

Pure Storage Smashed Expectations in Q2

Pure Storage fell after its most recent earnings report, despite crushing expectations. In its fiscal Q2 earnings report, the company posted revenue of $763.7 million, marking an 11% year-over-year increase, with its subscription segment growing 25% to $361.2 million.

Subscription annual recurring revenue (ARR) increased 24% to $1.5 billion, while remaining performance obligations (RPO) rose 24% to $2.3 billion. Q2 operating cash flow reached $226.6 million, and free cash flow arrived at $166.6 million. PSTG ended the quarter with total cash, cash equivalents, and marketable securities of $1.8 billion.

While revenue beat Wall Street's expectations, and so did adjusted earnings per share (EPS) of $0.44, investors sent the stock lower after guidance came up short.

Management guided for fiscal Q3 adjusted operating income of $140 million, missing the consensus of $148 million, and the forecast for adjusted operating margin of 17.2% missed the average estimate of 18.2%. And for the full fiscal year ending in January 2025, PSTG guided for revenue of $3.1 billion, just barely short of Wall Street's $3.14 billion forecast.

Fiscal Q3 earnings from Pure Storage are expected on Dec. 3.

Pure Storage Partners with CoreWeave

Since then, Pure Storage announced a cybersecurity partnership with Rubrik in September, and last week, Pure Storage revealed a strategic investment in CoreWeave. PSTG's partnership with the AI hyperscaler will integrate the Pure Storage platform into CoreWeave Cloud, enhancing their ability to accelerate the development and deployment of AI solutions.

"Our strategic collaboration with CoreWeave reflects a shared commitment to delivering AI innovation at scale and marks a major milestone in delivering the flexibility and scalability that AI-driven organizations need to thrive," said Chief Technology Officer Rob Lee.

What Do Analysts Expect For PSTG Stock?

On Nov. 13, Oppenheimer analysts initiated coverage of PSTG with an "Outperform" rating and a price target of $70. The firm stated that the data storage provider is well-positioned to benefit from the growing demand for unstructured data storage required for AI applications.

"Since AI requires data to be stored and accessed on highly performing infrastructure, it is best served by all-flash arrays. This, in turn, provides a long tail of growth for the industry," wrote analyst Param Singh in a note to clients.

Singh believes the all-flash array (AFA) market will grow at an 8.5% CAGR through 2028, reaching $17 billion, and that a market shift toward AFAs should benefit Pure Storage - allowing it to gain an edge over giants like DELL and HPE.

On the other hand, Citi recently lowered its price target on PSTG to $63 from $67, as the firm has yet to see a significant increase in demand for external storage. However, like most analysts, Citi rates the AI stock a “Buy.”

The average price target for PSTG is $66.16, more than 28% higher than Thursday's close.

On the date of publication, Nauman Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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Copart, Inc. (CPRT) came out with quarterly earnings of $0.37 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.34 per share a year ago. These figures are adjusted for non-recurring items.

A quarter ago, it was expected that this company would post earnings of $0.37 per share when it actually produced earnings of $0.33, delivering a surprise of -10.81%.

Over the last four quarters, the company has surpassed consensus EPS estimates just once.

Copart, which belongs to the Zacks Auction and Valuation Services industry, posted revenues of $1.15 billion for the quarter ended October 2024, surpassing the Zacks Consensus Estimate by 3.60%. This compares to year-ago revenues of $1.02 billion. The company has topped consensus revenue estimates three times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Copart shares have added about 13.1% since the beginning of the year versus the S&P 500's gain of 24.1%.

What's Next for Copart?

While Copart has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Copart: favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.37 on $1.12 billion in revenues for the coming quarter and $1.54 on $4.6 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Auction and Valuation Services is currently in the top 1% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Braze, Inc. (BRZE), another stock in the broader Zacks Business Services sector, has yet to report results for the quarter ended October 2024. The results are expected to be released on December 9.

This company is expected to post quarterly loss of $0.01 per share in its upcoming report, which represents a year-over-year change of +80%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Braze, Inc.'s revenues are expected to be $148.21 million, up 19.6% from the year-ago quarter.

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Workday, Inc. WDAY is set to release third-quarter fiscal 2025 results on Nov. 26, after the closing bell. In the trailing four quarters, the company delivered an earnings surprise of 9.13%, while in the last reported quarter, it delivered an earnings surprise of 7.36%.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Based in Pleasanton, CA, WDAY is expected to have recorded higher revenues on the back of solid demand for its human capital management and financial management solutions across different end markets.

Factors at Play

During the quarter, Workday introduced cutting-edge global HR and payroll solutions in collaboration with Strada, aimed at providing organizations with a unified view of their payroll data to enhance business growth and success. The company also collaborated with Axonify to develop an advanced set of tools that address the distinct requirements of frontline workers.

Workday also formed a partnership with Equifax to accelerate and streamline the employment and income verification process by leveraging complementary capabilities. These initiatives are expected to have had a favorable impact on third-quarter earnings.

In the quarter under review, the University of Arkansas System has deployed the Workday Student Management system across seven campuses. Workday is also witnessing healthy traction in the U.S. public sector market. These factors are likely to have had a positive impact on Workday’s fiscal third-quarter performance.

WDAY’s Key Developments in Q3

In the to-be-reported quarter, the company inked a definitive agreement to acquire the leading AI-based Document Intelligence Platform Evisort for an undisclosed amount. With this buyout, WDAY is aiming to integrate Evisort’s AI-native solution across its finance and human resource solution suite. This will enhance information accessibility and speed up the process of data extraction, enabling WDAY clients to transfer accurate financial or operational details to the Workday platform directly in a matter of seconds.

Organizations are looking for a solution that can help manage the exponential growth of data that is overwhelming the processing capabilities. By incorporating Evisort AI native document intelligence technology, WDAY is set to capitalize on this evolving market trend.

Overall Expectations From Workday

Our estimate for Subscription Services revenues is pegged at $1.95 billion, suggesting 15.6% year-over-year growth. Our estimate for Professional Services revenues is pegged at $175 million.

For the October quarter, the Zacks Consensus Estimate for revenues is pegged at $2.13 billion, suggesting an increase from the year-ago quarter’s reported figure of $1.87 billion. The consensus estimate for adjusted earnings per share is pegged at $1.72, indicating an increase from $1.53 reported in the prior year.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Workday for the fiscal third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $1.72. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Workday, Inc. Price and EPS Surprise

Workday, Inc. price-eps-surprise | Workday, Inc. Quote

WDAY’s Zacks Rank: Workday currently carries a Zacks Rank #2.

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Pure Storage Inc. PSTG is set to release quarterly numbers on Dec. 03. It has an Earnings ESP of +2.98% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Manchester United PLC MANU is scheduled to report quarterly numbers on Nov. 26. It has an Earnings ESP of +29.83% and carries a Zacks Rank of 3.

The Earnings ESP for Abercrombie & Fitch Co. ANF is +4.59% and it has a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Nov. 26.

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