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Nutanix (NTNX) Down 2.3% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Nutanix (NTNX - Free Report) . Shares have lost about 2.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Nutanix due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Nutanix Q2 Earnings Top Estimates, Revenues Rise Y/Y
Nutanix reported non-GAAP second-quarter fiscal 2024 earnings of 46 cents per share, surpassing the Zacks Consensus Estimate by 58.62%. The company had delivered an adjusted earnings per share of 12 cents in the year-ago quarter.
Nutanix’s revenues climbed 16% year over year to $565.2 million, beating the Zacks Consensus Estimate by 2.43% and the guided range of $545-$555 million.
The top line was primarily driven by growth in NTNX’s core hyper-converged infrastructure software and the solid adoption of its new capabilities. Nutanix continues to witness a strong adoption of its hybrid multi-cloud solutions across Fortune 100 and Global 2000 companies.
NTNX noted that the average contract term length declined to 2.8 years from three years in the year-ago quarter, primarily due to higher federal businesses that usually have shorter contract term lengths.
During the fiscal first quarter, Nutanix’s Annual Contract Value (ACV) billings jumped 23% to $329.5 million.
Top-Line Details
Product revenues (53% of revenues) increased 19.6% year over year to $299.6 million. Support, entitlements & other services revenues (47% of revenues) rose 12.6% to $265.6 million.
Subscription revenues (94.1% of revenues) climbed 17.9% from the year-ago quarter’s figure to $531.9 million. However, professional services revenues (4.4% of revenues) improved 6.7% to $25 million.
Billings were up 16.5% year over year to $616.5 million. Annual recurring revenues climbed 26.1% to $1.74 billion.
During the fiscal second quarter, Nutanix added 440 customers, taking the total number of clients to 25,370.
Operating Details
During the fiscal second quarter, Nutanix’s non-GAAP gross margin expanded 250 basis points year over year to 87.3%.
Non-GAAP operating expenses increased 8% year over year to $369.4 million.
Non-GAAP operating income came in at $123.9 million compared with $70 million reported in the year-ago quarter.
Balance Sheet & Cash Flow
As of Jan 31, 2024, cash and cash equivalents plus short-term investments were $1.64 billion, up from $1.57 billion at the end of the first quarter of fiscal 2024.
During the second quarter of fiscal 2024, cash generated through operating activities was $186.4 million and free cash flow was $162.6 million.
Outlook
For the third quarter of fiscal 2024, Nutanix expects ACV billings between $265 million and $275 million. Revenues are estimated between $510 million and $520 million.
Non-GAAP gross margin is estimated to be approximately 85%. Non-GAAP operating margin is expected in the band of 7.5-8.5%.
For fiscal 2024, NTNX expects ACV billings between $1.09 billion and $1.11 billion. Revenues are estimated in the range of $2.12-$2.15 billion.
Non-GAAP gross margin is estimated between 85% and 86% for fiscal 2024. Non-GAAP operating margin is projected in the range of 12.5-13.5%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 6.49% due to these changes.
VGM Scores
Currently, Nutanix has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Nutanix has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Nutanix belongs to the Zacks Computers - IT Services industry. Another stock from the same industry, CoStar Group (CSGP - Free Report) , has gained 11% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
CoStar reported revenues of $640.1 million in the last reported quarter, representing a year-over-year change of +11.6%. EPS of $0.33 for the same period compares with $0.38 a year ago.
CoStar is expected to post earnings of $0.12 per share for the current quarter, representing a year-over-year change of -58.6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for CoStar. Also, the stock has a VGM Score of D.
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Nutanix (NTNX) Down 2.3% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Nutanix (NTNX - Free Report) . Shares have lost about 2.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Nutanix due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Nutanix Q2 Earnings Top Estimates, Revenues Rise Y/Y
Nutanix reported non-GAAP second-quarter fiscal 2024 earnings of 46 cents per share, surpassing the Zacks Consensus Estimate by 58.62%. The company had delivered an adjusted earnings per share of 12 cents in the year-ago quarter.
Nutanix’s revenues climbed 16% year over year to $565.2 million, beating the Zacks Consensus Estimate by 2.43% and the guided range of $545-$555 million.
The top line was primarily driven by growth in NTNX’s core hyper-converged infrastructure software and the solid adoption of its new capabilities. Nutanix continues to witness a strong adoption of its hybrid multi-cloud solutions across Fortune 100 and Global 2000 companies.
NTNX noted that the average contract term length declined to 2.8 years from three years in the year-ago quarter, primarily due to higher federal businesses that usually have shorter contract term lengths.
During the fiscal first quarter, Nutanix’s Annual Contract Value (ACV) billings jumped 23% to $329.5 million.
Top-Line Details
Product revenues (53% of revenues) increased 19.6% year over year to $299.6 million. Support, entitlements & other services revenues (47% of revenues) rose 12.6% to $265.6 million.
Subscription revenues (94.1% of revenues) climbed 17.9% from the year-ago quarter’s figure to $531.9 million. However, professional services revenues (4.4% of revenues) improved 6.7% to $25 million.
Billings were up 16.5% year over year to $616.5 million. Annual recurring revenues climbed 26.1% to $1.74 billion.
During the fiscal second quarter, Nutanix added 440 customers, taking the total number of clients to 25,370.
Operating Details
During the fiscal second quarter, Nutanix’s non-GAAP gross margin expanded 250 basis points year over year to 87.3%.
Non-GAAP operating expenses increased 8% year over year to $369.4 million.
Non-GAAP operating income came in at $123.9 million compared with $70 million reported in the year-ago quarter.
Balance Sheet & Cash Flow
As of Jan 31, 2024, cash and cash equivalents plus short-term investments were $1.64 billion, up from $1.57 billion at the end of the first quarter of fiscal 2024.
During the second quarter of fiscal 2024, cash generated through operating activities was $186.4 million and free cash flow was $162.6 million.
Outlook
For the third quarter of fiscal 2024, Nutanix expects ACV billings between $265 million and $275 million. Revenues are estimated between $510 million and $520 million.
Non-GAAP gross margin is estimated to be approximately 85%. Non-GAAP operating margin is expected in the band of 7.5-8.5%.
For fiscal 2024, NTNX expects ACV billings between $1.09 billion and $1.11 billion. Revenues are estimated in the range of $2.12-$2.15 billion.
Non-GAAP gross margin is estimated between 85% and 86% for fiscal 2024. Non-GAAP operating margin is projected in the range of 12.5-13.5%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 6.49% due to these changes.
VGM Scores
Currently, Nutanix has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Nutanix has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Nutanix belongs to the Zacks Computers - IT Services industry. Another stock from the same industry, CoStar Group (CSGP - Free Report) , has gained 11% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
CoStar reported revenues of $640.1 million in the last reported quarter, representing a year-over-year change of +11.6%. EPS of $0.33 for the same period compares with $0.38 a year ago.
CoStar is expected to post earnings of $0.12 per share for the current quarter, representing a year-over-year change of -58.6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for CoStar. Also, the stock has a VGM Score of D.