Investing

Earnings Previews: Pure Storage, Salesforce, Snowflake, Splunk

Monday evening’s and Tuesday morning’s earnings announcements from Best Buy, Medtronic, Palo Alto Networks and Pinduoduo all beat expectations. An expected announcement from Chinese tutoring firm New Oriental Education did not materialize.

After markets close Tuesday, we will hear from three firms: Nordstrom, Intuit and Heico, and before the markets open on Wednesday, Dick’s Sporting Goods and Express are scheduled to report quarterly results.

Here’s a look at four notable reports due after markets close on Wednesday.

Pure Storage

Storage technology firm Pure Storage Inc. (NYSE: PSTG) has seen its share price plunge, then soar, then drop again since the beginning of 2020. Shares are up about 19% over the past 18 months and 24% over the past 12 months, but down nearly 10% since the beginning of 2021. Signaling Pure Storage’s troubles, Cathie Wood’s ARK Invest exchange-traded funds held 15.25 million shares of the company’s stock on June 30. Today, the ARK Genomic Innovation ETF holds just 257,067 shares, the only position the firm has left in Pure Storage.

Analysts see a different picture. Of 20 brokerages covering the firm, 16 rate the stock a Buy or Strong Buy, and the other four have shares at Hold. At a recent price of around $20.40, the potential upside based on a median price target of $30 is 47%. At the high price target of $33, the upside potential is nearly 62%.

Pure Storage is expected to report second-quarter 2022 revenue of $471.56 million, which would be up 14.3% sequentially and nearly 17% year over year. Adjusted earnings per share of $0.05 are better than the prior quarter’s break-even finish and down a penny from the year-ago quarter. For the full year, current estimates call for EPS of $0.33, up 83%, and sales of $1.96 billion, or 16.4% higher.

The stock trades at 61.8 times expected 2022 EPS, 39.3 times estimated 2023 earnings times and 32.1 times estimated 2024 earnings. The stock’s 52-week range is $13.91 to $29.53, and Pure Storage does not pay a dividend.

Salesforce

Dow Jones industrial average component Salesforce.com Inc. (NYSE: CRM) saw its share price rise 25% on August 26 of last year following a blowout quarterly report. By early March, the company had given back all of that gain. So far in 2021, the stock is up about 17%, following a couple of stumbles. The company completed its $27.7 billion acquisition of Slack last month, and investors likely will be keen to hear how that will improve Salesforce’s stock price going forward.

Analysts remain bullish on the stock, with 39 of 49 brokerages rating the shares a Buy or Strong Buy. The other 10 have rated the stock at Hold. At a share price of around $260.50, the stock’s upside potential based on a median price target of $287 is about 10.2%. At the high target of $335, the implied gain is 25.6%.

Second-quarter 2022 revenue is forecast at $6.25 billion, up 4.7% sequentially and more than 21% year over year. Adjusted EPS are forecast at $0.93, down 23.3% sequentially, and down 35.4% year over year. For the full fiscal year, analysts are currently looking for EPS of $3.85, down nearly 22%, and revenue of $26.02 billion, up 22.4%.

The stock trades at 71.1 times expected 2022 EPS, 63.2 times estimated 2023 earnings and 52.3 times estimated 2024 earnings. The stock’s 52-week range is $201.51 to $284.50 and Salesforce.com does not pay a dividend.