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Nutanix (NTNX) Registers a Bigger Fall Than the Market: Important Facts to Note

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In the latest close session, Nutanix (NTNX - Free Report) was down 1.39% at $67.94. The stock trailed the S&P 500, which registered a daily loss of 0.16%. On the other hand, the Dow registered a gain of 0.44%, and the technology-centric Nasdaq decreased by 0.76%.

The enterprise cloud platform services provider's shares have seen a decrease of 11.9% over the last month, not keeping up with the Computer and Technology sector's gain of 3.34% and the S&P 500's gain of 1.14%.

Analysts and investors alike will be keeping a close eye on the performance of Nutanix in its upcoming earnings disclosure. The company is forecasted to report an EPS of $0.41, showcasing a 2.38% downward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $677.02 million, up 14.56% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $1.9 per share and revenue of $2.92 billion. These totals would mark changes of +17.28% and +15.17%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Nutanix. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. At present, Nutanix boasts a Zacks Rank of #3 (Hold).

Looking at valuation, Nutanix is presently trading at a Forward P/E ratio of 36.32. This denotes a premium relative to the industry average Forward P/E of 16.45.

One should further note that NTNX currently holds a PEG ratio of 2.6. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Computers - IT Services industry had an average PEG ratio of 1.72 as trading concluded yesterday.

The Computers - IT Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 43, putting it in the top 18% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within 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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