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Nutanix (NTNX) to Report Q1 Earnings: What's in the Cards?

Nutanix NTNX is slated to report first-quarter fiscal 2022 results on Nov 23.

The Zacks Consensus Estimate for revenues is pegged at $368.3 million, suggesting growth of 17.8% from the year-ago reported figure.

The Zacks Consensus Estimate for the bottom line stands at a loss of 34 cents per share, which indicates a significant improvement from the year-ago quarter’s loss of 44 cents per share.

For the quarter under review, Nutanix anticipates ACV billings between $172 million and $177 million. It expects non-GAAP gross margin to be 81.5% approximately. Non-GAAP operating expenses are expected in the range of $365 million to $370 million.

The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 24.1%.

Nutanix Price and EPS Surprise

Nutanix price-eps-surprise | Nutanix Quote

Factors to Note

Nutanix’s first-quarter results are likely to reflect benefits from increased demand for its hyper-converged solutions and automation services. The ongoing shift to cloud solutions due to the pandemic-induced remote-working wave might have acted as a key catalyst.

Rise in the work-from-home trend, driven by the social-distancing norms related to the coronavirus pandemic, has been spurring demand for virtual desktop infrastructure and Desktop as a Service (“Daas”) solutions. This is likely to have favored the to-be-reported quarter’s performance.

Besides, Nutanix’s partnership with Red Hat bodes well. The company has been enabling a solution for building, scaling and managing cloud-native applications on premises and in hybrid clouds. This collaboration allows installation, interoperability and management of Red Hat OpenShift and Red Hat Enterprise Linux with Nutanix Cloud Platform, including Nutanix AOS and AHV (“Acropolis Hypervisor Virtualization”). Expansion in the company’s customer base as a consequence of this strategic partnership is likely to have contributed to the company’s first-quarter performance.

Additionally, it expanded partnership with Hewlett Packard Enterprise HPE under which its Era multi-database operations and management solution bundled with HPE ProLiant servers, as a service through HPE GreenLake, along with its core cloud platform which is already a part of the Greenlake solution.

Nutanix continues to witness strong adoption of its products. This trend is likely to have aided its quarterly performance. An increasing AHV adoption rate might get reflected in the to-be-reported quarter’s top line.

The company has been managing expenses with several cost-reduction methods. This may have contributed to margins.

Nutanix’s continued focus on enhancing its go-to-market productivity levels through efficient digital marketing spending, optimizing headcounts and leveraging its channel partners might have positively impacted the to-be-reported quarter’s performance. The company has decreased its global workforce by 2.5%, particularly from the sales and marketing department. The move is anticipated to yield approximately $50 million in annual savings.

Nonetheless, the ongoing transition to a subscription-based business model might have weighed on the first-quarter top-line performance.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Nutanix this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Nutanix currently has a Zacks Rank #3 and an Earnings ESP of 0.00%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combinations

Per our model, Snowflake SNOW and Lululemon Athletica LULU have the right combination of elements to post an earnings beat in their upcoming releases.

Snowflake has a Zacks Rank #3 and an Earnings ESP of +1.82%. The company is scheduled to report third-quarter fiscal 2021 results on Dec 1. Its earnings have surpassed the Zacks Consensus Estimate in one of the trailing four quarters and missed thrice, the average surprise being 2.5%.

The Zacks Consensus Estimate for Snowflake’s third-quarter bottom line is pegged at a loss of 6 cents per share, suggesting year-over-year growth of 78.6%. The consensus mark for revenues stands at $304 million, indicating year-over-year improvement of 90.4%.

Lululemon is slated to report third-quarter fiscal 2021 results on Dec 9. The stock has a Zacks Rank #2 and an Earnings ESP of +1.44%. Lululemon’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 25.2%.

The Zacks Consensus Estimate for quarterly earnings is pegged at $1.39 per share, suggesting year-over-year improvement of 19.8%. Its quarterly revenues are estimated to increase 28.1% year over year to $1.43 billion.

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

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lululemon athletica inc. (LULU): Free Stock Analysis Report
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Hewlett Packard Enterprise Company (HPE): Free Stock Analysis Report
Nutanix (NTNX): Free Stock Analysis Report
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