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Nutanix (NTNX) Falls More Steeply Than Broader Market: What Investors Need to Know

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In the latest close session, Nutanix (NTNX - Free Report) was down 5.94% at $69.94. This change lagged the S&P 500's daily loss of 0.38%. Meanwhile, the Dow experienced a drop of 0.2%, and the technology-dominated Nasdaq saw a decrease of 0.67%.

The enterprise cloud platform services provider's stock has dropped by 0.83% in the past month, falling short of the Computer and Technology sector's gain of 7.44% and the S&P 500's gain of 4.06%.

Investors will be eagerly watching for the performance of Nutanix in its upcoming earnings disclosure. In that report, analysts expect Nutanix to post earnings of $0.41 per share. This would mark a year-over-year decline of 2.38%. Meanwhile, our latest consensus estimate is calling for revenue of $677.02 million, up 14.56% from the prior-year quarter.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $1.9 per share and a revenue of $2.92 billion, signifying shifts of +17.28% and +15.17%, respectively, from the last year.

Investors should also note any recent changes to analyst estimates for Nutanix. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Nutanix is currently sporting a Zacks Rank of #3 (Hold).

With respect to valuation, Nutanix is currently being traded at a Forward P/E ratio of 39.2. This expresses a premium compared to the average Forward P/E of 17.47 of its industry.

Investors should also note that NTNX has a PEG ratio of 2.81 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The average PEG ratio for the Computers - IT Services industry stood at 1.83 at the close of the market yesterday.

The Computers - IT Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 56, which puts it in the top 23% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow NTNX in the coming trading sessions, be sure to utilize Zacks.com.


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