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Strength Seen in Nutanix (NTNX): Can Its 24.6% Jump Turn into More Strength?

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Nutanix (NTNX - Free Report) shares soared 24.6% in the last trading session to close at $26.35. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 10.8% loss over the past four weeks.

The upswing in Nutanix stock came after the Wall Street Journal reported that the company is exploring a sale after receiving a takeover interest. The company is benefiting from the solid adoption of its Hybrid cloud solutions and an expanding clientele.

Moreover, adoption rate of the company’s AHV hypervisor has been strong as customers continue to opt for it as a low-cost alternative to other vendor offerings. Further, a healthy pipeline of big deals is a tailwind. It is expected to benefit from the growth prospects of the hyper-converged infrastructure (HCI) market, over the long term.

This enterprise cloud platform services provider is expected to post quarterly loss of $0.12 per share in its upcoming report, which represents a year-over-year change of +45.5%. Revenues are expected to be $413.01 million, up 9.1% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Nutanix, the consensus EPS estimate for the quarter has been revised 3.8% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on NTNX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Nutanix is a member of the Zacks Computers - IT Services industry. One other stock in the same industry, Roper Technologies (ROP - Free Report) , finished the last trading session 2% lower at $363.18. ROP has returned -3.5% over the past month.

For Roper Technologies, the consensus EPS estimate for the upcoming report has changed -0.1% over the past month to $3.45. This represents a change of -11.8% from what the company reported a year ago. Roper Technologies currently has a Zacks Rank of #3 (Hold).

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