Pure Storage stock fell Thursday despite the enterprise data storage company posting "better-than-feared" fiscal first-quarter results, according to one analyst. The company's stock may have taken a hit from the announced departure of its CFO.
Santa Clara, Calif.-based Pure Storage said late Wednesday that it earned an adjusted 29 cents per share on sales of $778.5 million for the May 4-ended quarter. Analysts polled by FactSet were projecting adjusted earnings of 25 cents per share on sales of $770 million. Adjusted earnings decreased 9% while sales increased 12% year over year.
Pure Storage offers flash-based data storage hardware, as well as software tools to manage data storage.
Meanwhile, Pure Storage guided for sales of $845 million for the current quarter. Analysts were expecting $841 million in sales for the July-ending quarter, according to FactSet. Pure Storage's guidance for operating income of $125 million was slightly below estimates of $132 million, however.
The company also announced that CFO Kevan Krysler is leaving the company after five years. Krysler will remain at the company until a successor is named, according to the firm's press release.
On the stock market today, Pure Storage stock fell 2.7% to close at 53.64. Shares recovered from steeper losses earlier in the day and found support above the stock's 21-day moving average. Shares fell below Pure Storage's 200-day line, however.
Wall Street Pure Storage Earnings Reaction
Pure Storage stock soared 78% in 2024. The rally was capped off by Pure Storage's fiscal Q3 earnings report in December. Pure Storage's earnings beat expectations and the company announced a first-ever design win for its flash data storage technology to work with a top-four cloud hyperscaler.
But Pure Storage stock took a big hit following its most recent earnings results, which missed expectations for product margins. The stock slumped more than 35% from February through March but has bounced back with a slight gain in April and more than 20% rally so far in May. Overall, the stock is down 14% year to date, including Thursday's trading.
Guggenheim analyst Howard Ma said in a client note Pure Storage's Q1 results were "better than we feared" based on concerns about tariffs and the broader economic environment heading into the report.
"Pure Storage exceeded (fiscal q1) top- and bottom-line expectations despite macro uncertainty and guided (fiscal Q2) revenue above/EBIT below the Street, while maintaining fiscal year 2026 guidance for 11% growth/17% non-GAAP EBIT (earnings before interest and taxes) margin," Ma wrote. He reiterated a buy call and price target of 93 for Pure Storage stock.
Wedbush analyst Matt Bryson wrote that Krysler's departure was a "lone red flag in a field of green" in a note to clients Thursday. He reiterated a positive outperform rating.
"While management kept their FY'26 outlook steady, we see this decision as prudent given the uncertain impact of macro conditions and U.S. government policy, particularly on conditions in the second half of 2025," Bryson wrote. "Really the only negative in our view is (Krysler's departure). And with Kevan sticking around until a successor is named, we view his exit as an unfortunate loss of talent vs. a concerning datapoint."
UBS analyst David Vogt, however, stuck by a sell call following the report. The company's growth could see a fiscal 2027 "inflection" Vogt said, but he added that storage demand is still muted. Meanwhile, "Pure's core Product business faces headwinds from revitalized all-flash offerings from Dell Technologies and NetApp in fiscal 2026."
Pure Storage Stock
Coming into the report, Pure Storage stock had an IBD Composite Rating of 66 out a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
