Press Release: Pure Storage Announces Date And Conference Call Information For Third Quarter Fiscal 2025 Financial Results

Pure Storage (PSTG) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

Shares of this data storage company have returned -3.1% over the past month versus the Zacks S&P 500 composite's -0.5% change. The Zacks Computer- Storage Devices industry, to which Pure Storage belongs, has lost 11.8% over this period. Now the key question is: Where could the stock be headed in the near term?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Earnings Estimate Revisions

Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For the current quarter, Pure Storage is expected to post earnings of $0.43 per share, indicating a change of -14% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

For the current fiscal year, the consensus earnings estimate of $1.66 points to a change of +16.9% from the prior year. Over the last 30 days, this estimate has remained unchanged.

For the next fiscal year, the consensus earnings estimate of $1.91 indicates a change of +15.1% from what Pure Storage is expected to report a year ago. Over the past month, the estimate has remained unchanged.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Pure Storage is rated Zacks Rank #4 (Sell).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Revenue Growth Forecast

Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

In the case of Pure Storage, the consensus sales estimate of $814.63 million for the current quarter points to a year-over-year change of +6.8%. The $3.13 billion and $3.52 billion estimates for the current and next fiscal years indicate changes of +10.5% and +12.4%, respectively.

Last Reported Results and Surprise History

Pure Storage reported revenues of $763.77 million in the last reported quarter, representing a year-over-year change of +10.9%. EPS of $0.44 for the same period compares with $0.34 a year ago.

Compared to the Zacks Consensus Estimate of $756.59 million, the reported revenues represent a surprise of +0.95%. The EPS surprise was +15.79%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.

Valuation

Without considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.

The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Pure Storage is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom Line

The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Pure Storage. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.

Zacks Investment Research

Teradata (TDC) came out with quarterly earnings of $0.69 per share, beating the Zacks Consensus Estimate of $0.56 per share. This compares to earnings of $0.42 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 23.21%. A quarter ago, it was expected that this data management company would post earnings of $0.48 per share when it actually produced earnings of $0.64, delivering a surprise of 33.33%.

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

Teradata, which belongs to the Zacks Computer- Storage Devices industry, posted revenues of $440 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 5.02%. This compares to year-ago revenues of $438 million. 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.

Teradata shares have lost about 23.6% since the beginning of the year versus the S&P 500's gain of 20.1%.

What's Next for Teradata?

While Teradata 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 Teradata: mixed. 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 #3 (Hold) for the stock. So, the shares are expected to perform in line with 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 $0.46 on $431.6 million in revenues for the coming quarter and $2.24 on $1.75 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, Computer- Storage Devices is currently in the top 16% 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.

One other stock from the same industry, Pure Storage (PSTG), is yet to report results for the quarter ended October 2024.

This data storage company is expected to post quarterly earnings of $0.43 per share in its upcoming report, which represents a year-over-year change of -14%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Pure Storage's revenues are expected to be $814.63 million, up 6.8% from the year-ago quarter.

Zacks Investment Research

Pure Storage (PSTG) ended the recent trading session at $50.95, demonstrating a +1.8% swing from the preceding day's closing price. The stock exceeded the S&P 500, which registered a gain of 0.41% for the day. Meanwhile, the Dow experienced a rise of 0.69%, and the technology-dominated Nasdaq saw an increase of 0.8%.

The data storage company's shares have seen an increase of 0.58% over the last month, surpassing the Computer and Technology sector's loss of 0.01% and the S&P 500's loss of 0.97%.

Analysts and investors alike will be keeping a close eye on the performance of Pure Storage in its upcoming earnings disclosure. In that report, analysts expect Pure Storage to post earnings of $0.43 per share. This would mark a year-over-year decline of 14%. Our most recent consensus estimate is calling for quarterly revenue of $814.63 million, up 6.79% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.66 per share and a revenue of $3.13 billion, representing changes of +16.9% and +10.45%, respectively, from the prior year.

Investors should also pay attention to any latest changes in analyst estimates for Pure Storage. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Right now, Pure Storage possesses a Zacks Rank of #4 (Sell).

Looking at valuation, Pure Storage is presently trading at a Forward P/E ratio of 30.24. For comparison, its industry has an average Forward P/E of 14.4, which means Pure Storage is trading at a premium to the group.

One should further note that PSTG currently holds a PEG ratio of 2.03. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. By the end of yesterday's trading, the Computer- Storage Devices industry had an average PEG ratio of 2.03.

The Computer- Storage Devices industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 39, positioning it in the top 16% of all 250+ industries.

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

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

Zacks Investment Research

Super Micro Computer, Inc. SMCI is scheduled to report first-quarter fiscal 2025 results on Nov. 5.

For the fiscal first quarter, the company expects revenues between $6 billion and $7 billion. The Zacks Consensus Estimate is pegged at $6.52 billion, indicating growth of 207.5% from the year-ago quarter’s reported value.

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

Super Micro Computer expects non-GAAP earnings per share between 67 cents and 83 cents. The Zacks Consensus Estimate for earnings is pegged at 75 cents per share, suggesting a rise of 120.6% from the year-ago reported figure. The figure has been unchanged over the past 60 days.

SMCI has an impressive earnings surprise history. Its earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same on one occasion, the average surprise being 0.6%.

Super Micro Computer, Inc. Price and EPS Surprise

Super Micro Computer, Inc. price-eps-surprise | Super Micro Computer, Inc. Quote

Earnings Whispers for Super Micro Computer

Our proven model does not conclusively predict an earnings beat for Super Micro Computer this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Though SMCI carries a Zacks Rank #2, it has an Earnings ESP of -0.11% at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Factors Likely to Influence SMCI’s Quarterly Performance

Super Micro Computer has been capitalizing on the current artificial intelligence (AI) boom due to the robust demand for its server and storage solutions. Growing original equipment manufacturer (OEM) component orders have been leading to a spike in the uptake of its AI servers. This is expected to have been a tailwind for the company in the quarter under review.

SMCI’s strong investments in high-quality, optimized Direct Liquid Cooling solutions for high-end applications are anticipated to have benefited the quarterly performance. The company’s strengthening manufacturing capabilities to support the growth of AI and enterprise rack-scale liquid-cooled solutions and capitalize on the rising demand for liquid-cooled data centers are likely to have been upsides.

Super Micro Computer’s solid traction across top-tier data centers, emerging cloud service providers, enterprise/channel and edge/IoT/telco customers due to its robust next-generation AI and CPU platforms are expected to have been upsides. SMCI’s robust building block architecture and operation/production automation systems, offering optimized rack-scale solutions with time-to-market and quality advantages to its customers, are expected to have been other tailwinds.

These factors are expected to have aided the performance of Super Micro Computer’s Server & Storage Systems segment. Also, the company’s robust portfolio of infrastructure solutions for 5G and telecom workloads on the back of its continuing partnership with NVIDIA Corporation NVDA is likely to have contributed well to the segment’s top-line growth in the fiscal first quarter.

Strong momentum across its H100-based systems and AI inferencing systems is likely to have boosted the performance of the Subsystems & Accessories segment in the fiscal first quarter.

SMCI’s Price Performance & Valuation

Super Micro Computer shares have increased 2.4% on a year-to-date basis, underperforming the Zacks Computer – Storage Devices industry, the Zacks Computer & Technology sector and the S&P 500 index’s rise of 19.7%, 23.2% and 20%, respectively.

The company has also underperformed the 24.7% and 40.4% rise of its peers Western Digital WDC and Pure Storage PSTG, respectively, in the year-to-date period.

YTD Price Return Performance