I will be attending Pure Storage conference next week. I will not be able to go everyday and planning to attend one day and have some time scheduled to meet with product development. If you have any questions related to product let me know. Please note, I have only 2 30 minute slots, so limit questions.
18 Likes
Kingran,
They may talk about this Monday afternoon in the quarterly conference call anyway, but I’d like to know to what extent they’ve seen a pickup in demand lately, through their recent partnerships and just in general.
Thanks,
Bear
If you could try to get a feel for how excited they seem to be about the AIRI that was recently announced, that would be useful (for NVDA a bit as well, but especially so for Pure). I’d imagine they’ll talk about it Monday as well.
The numbers look pretty decent at a glance, no blowout, but chugging along pretty nicely. Real blow-out could come in Q3 or maybe more likely Q4, I would guess. Q1 is their lowest quarter seasonally.
Earnings Slides for Q1 2018 (ending March 31, 2018)
https://s21.q4cdn.com/687136699/files/doc_presentations/2018…
volfan84
long PSTG
1 Like
Seems the initial drop might be quite overdone to me.
The numbers look pretty decent at a glance, no blowout, but chugging along pretty nicely. Real blow-out could come in Q3 or maybe more likely Q4, I would guess. Q1 is their lowest quarter seasonally.
Earnings Release:
https://s21.q4cdn.com/687136699/files/doc_news/2018/Q1fy19-E…
Looks like they should be FCF positive for the rest of the year, with this quarter at only -$3.7M (improvement of $23.4M from the year ago quarter). If subsequent quarters exhibited the same $24M FCF improvement, that would put the FCF for the year at around (-4M + 6M +37M + 62M) $101M (which would be quite decent).
Revenue guided at $1.32-$1.37 billion for the year.
Current net cash position is at about $670M ($1.1B cash and equivalents - $430M LT debt). Market cap is at about $3.9B, so EV of about $3.2B.
So, EV/S ratio (using full year 2018 guidance) is currently at about 2.5 (using $3.2B and $1.3B)…yeah, I’ll quickly call this sell-off as being overdone here.
volfan84
long PSTG
6 Likes
Damm look at you Volfan
You are on it! You sound like a pro.
Thanks
No pro yet…but getting faster at looking at some things.
A clarification for a thing I think I misstated previously:
The quarter just announced was ended on April 30, 2018 rather than March 31, 2018.
Also, an added observation…there is a pretty big delta between the GAAP number and cash flow number due to stock based compensation of about $44 million. The year-over-year share count has increased by right about 18 million shares (205.8 million to 223.8 million), which is an increase of a bit less than 10%.
volfan84
5 Likes
That’s a lot of shares added.
Real blow-out could come in Q3 or maybe more likely Q4, I would guess. Q1 is their lowest quarter seasonally.
That’s kind of what I was thinking. Each quarter in the year appears to accelerate so I’m expecting bigger things as the year goes on.
Y/Y Growh
YearQ1 Q2 Q3 Q4
2017 30.7% 37.4% 41.1% 48.2%
2018 39.9%
1 Like
And their guidance was for a top end of $304 million which would give them Y/Y growth of 36%. Seems like they should knock that out of the park in Q2.
Y/Y Growth
(guidance in bold)
Year Q1 Q2 Q3 Q4
2017 30.7% 37.4% 41.1% 48.2%
2018 39.9% **35.7%**
-AJ
Couple things I have noted so far from the earnings call transcript:
Pure Storage’s (PSTG) CEO Charlie Giancarlo on Q1 2019 Results - Earnings Call Transcript https://seekingalpha.com/article/4176023?source=ansh $PSTG
"Win rates continue to be strong across all the competitors and we believe that our innovation GAAP (gap…silly transcriptionist) is widening. There is a bunch of announcements that we’ll share later this week that we feel just continues to expand the mode. "
Charlie Giancarlo
“Yes, I’ve done the road with Jim McHugh from Nvidia who is the GM for the DGX business as well as Jayshree Ullal, CEO of Arista and we went across the country. I have to say the number of Fortune 500 logos and the titles within those logos was really almost unprecedented for us, so very high level interest and a very high level of interest in AI.”
volfan84
Long PSTG
11 Likes
Could be an opportunity to add. High growth maintained or increasing, going free cash flow positive for the year and profitability in sight for next year. One thing I need to check is any material impact on the growth numbers etc from the accounting standards change over this Q.
A
2 Likes
https://seekingalpha.com/article/4176071-pure-storage
Ok I agree with this. It is still a very clear beautiful story. Very high conviction here on this one. Tailwinds and smart business model choices make this one of my most comfortable hardware holdings.
Ant
4 Likes
Seems the initial drop might be quite overdone to me.
Current net cash position is at about $670M ($1.1B cash and equivalents - $430M LT debt). Market cap is at about $3.9B, so EV of about $3.2B.
So, EV/S ratio (using full year 2018 guidance) is currently at about 2.5 (using $3.2B and $1.3B)…yeah, I’ll quickly call this sell-off as being overdone here.
Seems that my instinct was correct…should have acted on it and gotten some shares for under $22 last night. They’re back to being over $23 again this morning with the market open (scratch that, now back under $23).
Looks like the market cap I cited last night was not adjusted for the overdone sell-off, as it is listed at $3.8B now rather than the $3.9 that was listed last night…so that EV/S ratio was probably closer to 2.4 as of the after-hours prices yesterday that I was seeing.
volfan84
Looks like the market cap I cited last night was not adjusted for the overdone sell-off, as it is listed at $3.8B now rather than the $3.9 that was listed last night…so that EV/S ratio was probably closer to 2.4 as of the after-hours prices yesterday that I was seeing.
volfan84,
Sometimes when you are sure the fish are there, but they ain’t biting, you gotta set out a trot line.
Cheers
Qazulight
1 Like
Looks like I may have spoken a bit too soon this morning too. Now back to about $22/share.
Yeah, not really sure why you’d feel the need to rush in and buy more PSTG on a day like today when the CEO is going to be on tv off and on discussing the future outlook.
Discretion is the better part of valor and all that.
I like how he explains enterprise value in the SeekingAlpha article.
Market cap
- their cash
+debt = E/V
Thanks Volfan for getting me to start looking at enterprise value
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No problem, MusiCali.
EV seems much more appropriate to me for valuation ratios.
Looks like Pure is almost being drawn right to the $22/share level for the past few hours.
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Lots of price target raises by analysts, according to IBD. Weird it’s staying down. This seems to happen a lot lately. Good report. Stocks goes down and stays down the next day. Then the very next day, climbs back up.
Peace,
Dana
2 Likes