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What's in the Offing for Nutanix (NTNX) This Earnings Season?

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Nutanix (NTNX - Free Report) is slated to report second-quarter fiscal 2022 results on Mar 2.

The company expects revenues to be $400-$410 million. The Zacks Consensus Estimate for Nutanix’s second-quarter revenues is pegged at $407.9 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 21 cents per share, which indicates a significant improvement from the year-ago quarter’s loss of 37 cents per share.

The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 27.2%.

Nutanix Price and EPS Surprise Nutanix Price and EPS Surprise

Nutanix price-eps-surprise | Nutanix Quote

Factors to Note

Nutanix’s fiscal second-quarter performance is likely to have benefited from robust growth in its hyper-converged solutions and automation services. The ongoing shift to cloud solutions due to the remote-working trend might have acted as a key catalyst in the quarter to be reported.

Nutanix anticipates Annual Contract Value (“ACV”) billings between $195 million and $200 million in the fiscal second quarter, suggesting year-over-year growth of 23-26%. The company is likely to have witnessed significant sequential growth in emerging products ACV bookings in the to-be-reported quarter.

The company expects the average contract term length to have risen in the quarter under review primarily due to lower federal business. Note that the average contract term length declined to 3.1 year in the previous quarter from the year-ago quarter’s figure of 3.5 year.

Nutanix expects non-GAAP gross margin to be approximately 82-82.5%. The company manages expenses with several cost-reduction methods. This may have contributed to margins.

Non-GAAP operating expenses are projected in the range of $360 million to $365 million.

In its last reported quarterly conference call, Nutanix management stated that they would implement a revised incentive program in the fiscal second quarter to expand opportunities across all the solution portfolios. This is likely to have driven sales in the to-be-reported quarter.

Expansion in the company’s customer base as a consequence of the strategic partnership with Red Hat is likely to have contributed to the company’s second-quarter performance. Specifically, an increase in Acropolis Hypervisor Virtualization (“AHV”) adoption rate might get reflected in the to-be-reported quarter’s top line.

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.

In the quarter under review, Nutanix estimates utilization of free cash flow worth approximately $25 million.

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

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.

Nutanix currently has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combinations

Per our model, Pangaea Logistics Solutions (PANL - Free Report) , Oxford Industries (OXM - Free Report) and Designer Brands (DBI - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.

Pangaea Logistics has a Zacks Rank #1 and an Earnings ESP of +13.25%. The company is scheduled to report fourth-quarter 2021 results on Mar 21. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 31.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for the fourth-quarter earnings of Pangaea Logistics is pegged at 42 cents per share, suggesting year-over-year growth of 200%. The consensus mark for revenues stands at $189.8 million, indicating a surge of 68.2% year over year.

Oxford is slated to report fourth-quarter fiscal 2022 results on Mar 24. The stock has a Zacks Rank #2 and an Earnings ESP of +1.10%. Its earnings beat the Zacks Consensus Estimate in three of the preceding four quarters and missed once, the average surprise being 96.7%.

The Zacks Consensus Estimate for Oxford’s quarterly earnings stands at $1.37 per share, suggesting year-over-year growth of 953.9%. Its quarterly revenues are estimated to increase 33.5% year over year to $295.6 million.

Designer Brands has a Zacks Rank #2 and an Earnings ESP of +12.28%. The company is scheduled to report fourth-quarter fiscal 2022 results on Mar 15. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 116%.

The Zacks Consensus Estimate for Designer Brands’ fourth-quarter earnings is pegged at 14 cents per share, suggesting year-over-year growth of 126.4%. The consensus mark for revenues stands at $842.9 million, indicating a year-over-year improvement of 38.3%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.