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Nutanix (NTNX) to Report Q4 Earnings: What's in the Cards?

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Nutanix Inc. (NTNX - Free Report) is scheduled to report fourth-quarter fiscal 2018 earnings on Aug 30.

Notably, the company beat the Zacks Consensus Estimate for earnings thrice in the trailing four quarters and missed it once, delivering an average positive surprise of 19.99%.

In the last reported quarter, the company posted loss of 21 cents per share, a penny wider than the Zacks Consensus Estimate but significantly narrower than the year-ago quarter’s loss of 32 cents.

Revenues surged 40.7% from the year-ago quarter to $289.4 million. Product revenues climbed 38.1% year over year to $160.1 million, while support & other services revenues jumped 49.8% to $45.6 million.

For the fourth quarter of fiscal 2018, revenues are projected between $295 million and $300 million. Nutanix forecasts non-GAAP net loss between 20 cents and 22 cents for the quarter.

The Zacks Consensus Estimate for the quarter is pegged at a loss of 21 cents, narrower than the year-ago quarter’s loss of 33 cents. The Zacks Consensus Estimate for revenues of $298 million indicates around 31.8% growth from the prior-year quarter.

Nutanix Inc. Price and EPS Surprise

Nutanix Inc. Price and EPS Surprise | Nutanix Inc. Quote

Let’s take a look at how things are shaping up for the upcoming announcement.

Factors to Consider

Nutanix is considered a pioneer in the hyper converged infrastructure (HCI) market. Its built-in hypervisor has been gaining significant traction, as customers continue to select it as a low-cost alternative to other vendor offerings.

A growing customer base with the addition of prominent names is expected to drive Nutanix’s growth. The company added 820 customers taking the total end-customer count to 9,690 at the end of the last reported quarter. Increasing AHV adoption rate, particularly among public sector entities, has been a major growth factor.

However, management anticipates operating expense to rise.  The company’s increased level of investments is expected to keep margins under pressure.

Moreover, intense competition from the likes of Cisco (CSCO - Free Report) , Hewlett Packard Enterprise (HPE - Free Report) and NetApp (NTAP - Free Report) remains a concern.

What our 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. Zacks Rank #4 (Sell) or #5 (Strong Sell) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Nutanix has an Earnings ESP of -2.98% and carries a Zacks Rank #4.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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