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What's in Store for Pivotal Software (PVTL) Q3 Earnings?

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Pivotal Software (PVTL - Free Report) is set to release third-quarter fiscal 2019 results on Dec 11.

In the last reported quarter, Pivotal Software reported a loss of 6 cents per share that was narrower than the Zacks Consensus Estimate of a loss of 9 cents and year-ago quarter’s loss of 13 cents.

Revenues of $164.4 million beat the consensus mark of $158 million and surged 30.5% on a year-over-year basis.

For third-quarter fiscal 2019, revenues are expected between $163 million and $165 million. Non-GAAP net loss is anticipated between 9 cents and 8 cents per share.

The Zacks Consensus Estimate for revenues is pegged at $163.6 million. The consensus mark for the bottom line is pegged at a loss of 9 cents.
 

 

Factors to Watch Out

Strong growth in Pivotal Software’s subscription revenues is expected to drive results in the to-be-reported quarter. In the last reported quarter, subscription revenues jumped 51% year over year, while subscription customers increased 19% to 354. The company added 15 new customers, including Pepsico and Autozone, among others, in the federal, supply-chain management, medical equipment, office supply, and telecom sectors.

Pivotal Software’s expanding portfolio is a key catalyst. During the last quarter, the company announced updates to the Pivotal Cloud Foundry (PCF) platform. The updates were aimed at making operator experience simple. It also included expanded multi-cloud support as well as greater support for the .NET Framework.

Furthermore, the company’s partnerships with Dell Technologies, VMware (VMW - Free Report) , Microsoft and HCL are major growth drivers. Dell, through vxRail, offers Pivotal Ready Architecture, which is a hyper-converged system built ready for the PCF platform. It is gaining traction among new private cloud customers.

However, management expects short-term and total deferred revenues to be flat to slightly down sequentially in the to-be-reported quarter.

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. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided.

Pivotal Software has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks with Favorable Combination

Here are couple of stocks you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.

Costco Wholesale (COST - Free Report) has an Earnings ESP of +1.17% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nike (NKE - Free Report) has an Earnings ESP of +0.34% and a Zacks Rank #3.

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