#PureStorage reported the results of its fiscal Q2 last week. The results were a convincing snap-back from the relatively muted results of Q1. The company achieved stronger than expected revenues, gross margins, and EPS, and came close to cash flow break-even. The company is seeing excellent early results for its newest product family and is starting to achieve material success with offerings as part of its Cisco partnership. The company appointed a new CEO, Charles Giancarlo, who has a wealth of experience at a prominent venture capital firm and at Cisco. Pure - Just how good was that quarter Late last week, Pure Storage (PSTG) reported the results of its fiscal Q2. The results were significantly above the company's prior forecast, and the company raised guidance as well. One veteran analyst wrote a curious note to the effect that investors should take a fresh look at the company. The problem, at least for this observer, is that his research note kept a hold rating on the shares with a $15 price target - why take a fresh look when the shares closed at $14.25? Hard to understand that type of logic. The company now has a new CEO who has enjoyed a long and successful career with stints at Cisco (NASDAQ:CSCO) and at Silver Lake Partners, a well-respected VC firm. Pure has been one of the leaders in flash for some time now, and its results simply affirm that it is achieving consistent success in the space. The quarter also contained positive news with regards to the market penetration of FlashBlade, a key product initiative. I too think investors who have not done so might do well to take a look at the shares of Pure. The only difference between me and the analyst at Barclays is that I believe investors should take a look at Pure with a view toward owning the shares. Even in the wake of the share price spike last Friday, the company's valuation remains attractive, and more so in that, the increase in guidance was actually greater than the increase in share price. The headline results were as follows: The company had quarterly revenues of $225 million, 3% higher than the mid-point of prior guidance. The sequential growth in revenues was 23%. The company had GAAP gross margins of 66% compared to 65% the prior quarter. The company's quarterly GAAP operating margin was (29%), a 600-basis point improvement compared to the prior quarter and an 800 point improvement compared to the prior year. The company is forecasting sequential revenue growth of 20% this quarter and a further sequential revenue growth 21% in its fiscal Q4. If the forecast is realized, Q4 revenues will be up 44% from those reported in the prior year's comparable quarter. That might suggest to many that the current First Call consensus forecast that shows growth of 30% in the next fiscal year is significantly understated. The company had 350 new name accounts last quarter up from 300 in fiscal Q1 and comparable to the number of new name accounts closed in the prior year. Pure's go-to market strategy is very much land and expand, and the number of new name accounts is a key indicator in forecasting the company's forward growth. A large cohort of revenues comes from users who buy more from Pure after their initial installation is successfully deployed.
https://seekingalpha.com/article/4102967-pure-storage-still-far-getting-respect-deserves
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