Tag Archives: pstg

Two Techs In Hyper-Growth Mode Positioned For Solid Earnings

Splunk ( SPLK ) and Pure Storage ( PSTG ) are positioned to deliver solid earnings this week, despite a challenging environment for spending on information technology, analysts say. Pacific Crest Securities analyst Brent Bracelin said in a research note Monday that Splunk remains the firm’s “highest-conviction growth idea that continues to deliver solid results.” And he said Pure Storage has emerged as the largest and fastest-growing provider of flash-based storage technology “that we believe remains well positioned to grow 60%-plus this year, driven by share gains in a shrinking storage market.” IBD Take: Splunk ranks No. 4 in its group. Learn why at IBD Stock Checkup . Splunk provides software for machine-to-machine data analytics that companies use to attain real-time intelligence. The consensus on Splunk is for revenue of $174.1 million for its fiscal Q1 ended on or near April 30, according to a poll by Thomson Reuters. That would be an increase of 38.5% year over year, maintaining its double-digit growth rate going back more than four years. Analysts expect a 2-cent loss per share minus items, vs. a 1-cent loss in the year-earlier quarter and an 11-cent profit in the previous quarter. Splunk is set to report after the market close Thursday. “We remain bullish on the prospects for Splunk to grow into a $1 billion-plus revenue franchise based on a differentiated software,” Bracelin wrote of the company that posted revenue of $668 million for fiscal 2016 ended Jan. 31. RBC Capital Markets analyst Matthew Hedberg has an outperform rating on Splunk stock and a price target of 60. Splunk shares were near 54, up 2%, in afternoon trading in the stock market today . The stock is 81% higher since hitting a low of 29.85 on Feb. 12. Pure Storage, meanwhile, is set to report earnings after the market close Wednesday for its fiscal Q1 ended April 30. The Wall Street consensus estimate on revenue is $138 million, up 86% year over year, following 12 quarters in a row of triple-digit gains. The bottom-line consensus is for a per-share loss minus items of 23 cents, vs. a 26-cent loss in the year-earlier quarter. Pure Storage received an upbeat review ahead of its Q1 report, with an analyst saying the flash storage market appears to be growing faster than expected. Pure Storage stock was trading near 14.75, up 1.5%, Monday afternoon. It came public in October 2015 with shares priced at 17. Other tech companies reporting this week include  Hewlett Packard Enterprise ( HPE ) and HP Inc. ( HPQ ) Hewlett Packard Enterprise, which provides business enterprise services and cloud-enabled technologies, is projected to report revenue of $12.3 billion and EPS minus items of 42 cents. It reports after the close Tuesday. Hewlett-Packard Enterprise was trading near 16, up 1.5%. HP, which sells personal computers and printers, reports its fiscal second quarter after the close Wednesday. The consensus on revenue is $11.7 billion, with views for EPS minus items of 38 cents. HP stock was near 11.70, up a fraction.

Pure Storage Continues Path To Disrupt IBM, EMC, NetApp In Storage

Pure Storage ( PSTG ) received an upbeat review ahead of its first-quarter earnings report next week, with an analyst saying the flash storage market appears to be growing faster than expected. Pacific Crest Securities analyst Brent Bracelin said Pure Storage appears to be gaining market share at the expense of legacy storage vendors including IBM ( IBM ), NetApp ( NTAP ) and EMC, which Dell is acquiring. “Reseller and partner feedback during March and April suggests demand for flash remains strong, particularly for Pure Storage,” Bracelin wrote in a research note. Pure Storage makes storage products based on flash chips, designed for the business enterprise market. Flash-based storage arrays are much faster than disk-drive storage systems but generally come at a higher price. Flash is seen as the future of storage, with that transition well underway but still in the early stages. The vast majority of the storage spend is still with the largest incumbents, including NetApp, IBM and EMC. Pure Storage is growing fast, but it’s still incurring large losses. Pure Storage continues to invest heavily to support a business model that is on pace to quickly scale to a $1 billion run-rate within five years after shipping its first product, Bracelin wrote. The company has $604 million in cash and no debt, and it remains on track to reach positive cash flow by the end of 2018, he said. “We estimate Pure’s revenue could grow by 60%-plus this year, driven by flash share gains,” Bracelin wrote. Pure Storage is set to report earnings after the market close Wednesday, for its fiscal Q1 ended April 30. The Wall Street consensus estimate on revenue is $138 million, up 86% year over year. The bottom-line consensus, as polled by Thomson Reuters, is for a per-share loss minus items of 23 cents, vs. a 26-cent loss in the year-earlier quarter. Pacific Crest continues to rate Pure Storage stock overweight, or buy, “based on the promising potential to build a next-generation storage franchise, strong balance sheet with over $600 million in cash, and the longer-term profit potential,” Bracelin wrote. Bracelin has a price target on Pure Storage stock of 24. The company came public in October 2015, raising $425 million with an initial public offering that priced 25 million shares at 17. Pure Storage stock was near 14.50, up 1%, in afternoon trading in the stock market today .

IBM Joining Amazon, Microsoft, Google In Cloud’s Top 4, Says UBS

Make room for IBM ( IBM ) as well as the usual suspects — Amazon Web Services, Microsoft ( MSFT ) and Alphabet’s Google —  in the cloud computing market hierarchy, UBS says in a research report. While AWS, part of Amazon.com ( AMZN ), and Google ( GOOGL ) are strongest in infrastructure-as-a-service (IaaS), Microsoft’s Azure service and IBM are formidable in platform-as-a-service (PaaS), according to the UBS survey of corporate information technology executives. In the IaaS market, customers rent computers and data storage via the Internet. In PaaS, companies sell applications and software, including business management and database services, that run on cloud infrastructure. “Cloud is not a winner-take-all market,” said UBS. “We believe the ‘big will get bigger,’ … AWS, Microsoft, and Google are going to be winners, with IBM holding its own. “The likely losers, based on UBS estimates of revenue exposure, include Rackspace ( RAX ), Nimble ( NMBL ), Pure Storage ( PSTG ), Brocade ( BRCD ), Hewlett Packard Enterprise ( HPE ), and NetApp ( NTAP ).” Rackspace, which is set to report Q1 earnings after the close Monday, is transitioning to a services model, providing support for AWS and Azure. IBM acquired IaaS provider Softlayer in 2013. To be stronger in PaaS, IBM has layered software on Softlayer’s infrastructure and made other cloud acquisitions, says UBS. One surprise in the UBS survey is that IT executives expect pricing for cloud computing to moderate. Some analysts predict Google will be more aggressive in cutting prices.