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Nutanix (NTNX) to Report Q2 Earnings: What's in the Cards?

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Nutanix Inc. (NTNX - Free Report) is scheduled to report second-quarter fiscal 2018 earnings on Mar 1. The question lingering on investors’ minds is if this provider of enterprise cloud platform will be able to deliver a positive surprise.

We expect the results to benefit from an enriched product portfolio, which is expanding the company's client base. Notably, the company beat the Zacks Consensus Estimate for earnings in the trailing four quarters, with an average positive surprise of 18.5%. In the previous quarter, the company delivered a positive earnings surprise of 38.5%.

Its top-line performance has also been consistent. The company beat the Zacks Consensus Estimate for revenues in each of the trailing four quarters.

Nutanix expects second-quarter fiscal 2018 revenues in the range of $280-$285 million. Non-GAAP gross margins are projected to be in the range of 62.5% to 63.5%. Nutanix forecasts non-GAAP net loss between 20 cents and 22 cents for the quarter.

What the Zacks Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Nutanix has a Zacks Rank #3 and an Earnings ESP of +3.51%. This indicates that the company is likely to beat estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Zacks Consensus Estimate for second-quarter is pegged at a loss of 21 cents per share, much narrower than the year-ago quarter’s loss. Revenues are estimated to be around $282.95 million, portraying a 55.3% increase on a year-over-year basis.

Let’s see the reasons behind this overwhelming expectation.

Factors to Consider

Nutanix has been gaining from a growing customer base. Nutanix added 760 customers taking the total end-customer count to 7,813 at the end of the first-quarter of fiscal 2018. The number of deals worth more than $1 million jumped 36% year over year to 49.

Notably, the company added a few prominent names to its clientele during the second quarter including the likes of Subaru Canada, Chicago Bears and Zain Bahrain. The operational efficiency of these companies is expected to be optimized with the deployment of Nutanix’s solutions.

During the soon-to-be reported quarter, the company announced the addition of “developer-oriented services” to its “Enterprise Cloud OS software.” This is expected to meet multi-cloud related information technology (IT) needs. The enriched solutions suite is anticipated to be a top-line booster.

Other Stocks with a Favorable Combination

Here are some companies you may also want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Vmware has an Earnings ESP of +0.28% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stratasys (SSYS - Free Report) has an Earnings ESP of +7.21% and a Zacks Rank #3.

salesforce.com (CRM - Free Report) has an Earnings ESP of +0.25% and a Zacks Rank #3.

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