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The upgrade can be attributed to positive estimate revision. We note that the Zacks Consensus Estimate for fiscal 2018 is currently pegged at a loss of 95 cents per share, better than $1.35 over the last 30 days. The Zacks Consensus Estimate for fiscal 2019 has also narrowed to a loss of 56 cents per share from 98 cents over the same time frame.
The positive estimate revision can be attributed to Nutanix’s consistent performance. The company has beaten the Zacks Consensus Estimate in the trailing four-quarters with an average positive earnings surprise of 12.85%. The outperformance was primarily driven by robust top-line growth.
In the last quarter, Nutanix reported revenues of $226.1 million, which surged 62% from the year-ago quarter. Billings grew 40% to $289.2 million. Moreover, fiscal 2017 total revenue were $766.9 million, up a massive 72% over fiscal 2016.
Most importantly, customer count continued to remain strong. Nutanix added 875 new end-customers in the last quarter bringing fiscal 2017 count to 7051 end-customers. Moreover, number of customers of more than $1 million deal increased 39% year over year to 43%.
Growth Catalysts
Nutanix has been benefiting from bright prospects of the hyperconverged integrated systems (HCIS) market. Per market research firm Gartner, HCIS will be the fastest-growing segment of the overall market for integrated systems, reaching almost $5 billion by 2019.
In the last quarter, the company’s AHV built-in hypervisor saw 75% year-over-year growth in adoption (based on a four-quarter rolling average of nodes using AHV, as a percentage of total nodes sold).
Moreover, the company launched Xi Cloud Services in strategic partnership with Alphabet (GOOGL - Free Report) division, Google.
Management expects revenue mix shift towards software to help the company achieve long-term gross margin target of 63-65% as compared with 59% in fiscal 2016. Improving cost structure will help Nutanix achieve non-GAAP operating margin target of 15-18% in the long haul.
We believe that Nutanix’s expanding product portfolio through the launch of Nutanix Cloud and Xi cloud services along with networking and security will continue to boost its clientele. Moreover, collaboration with International Business Machines Corporation (IBM - Free Report) is also positive. This will improve its competitive position against the likes of Cisco Systems Inc (CSCO - Free Report) in the long haul.
Can Hackers Put Money INTO Your Portfolio?
Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Image: Bigstock
Nutanix Upgraded to Strong Buy on Positive Estimate Revision
On Oct 4, Nutanix Inc (NTNX - Free Report) was upgraded to a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The upgrade can be attributed to positive estimate revision. We note that the Zacks Consensus Estimate for fiscal 2018 is currently pegged at a loss of 95 cents per share, better than $1.35 over the last 30 days. The Zacks Consensus Estimate for fiscal 2019 has also narrowed to a loss of 56 cents per share from 98 cents over the same time frame.
The positive estimate revision can be attributed to Nutanix’s consistent performance. The company has beaten the Zacks Consensus Estimate in the trailing four-quarters with an average positive earnings surprise of 12.85%. The outperformance was primarily driven by robust top-line growth.
In the last quarter, Nutanix reported revenues of $226.1 million, which surged 62% from the year-ago quarter. Billings grew 40% to $289.2 million. Moreover, fiscal 2017 total revenue were $766.9 million, up a massive 72% over fiscal 2016.
Nutanix Inc. Price and Consensus
Nutanix Inc. Price and Consensus | Nutanix Inc. Quote
Most importantly, customer count continued to remain strong. Nutanix added 875 new end-customers in the last quarter bringing fiscal 2017 count to 7051 end-customers. Moreover, number of customers of more than $1 million deal increased 39% year over year to 43%.
Growth Catalysts
Nutanix has been benefiting from bright prospects of the hyperconverged integrated systems (HCIS) market. Per market research firm Gartner, HCIS will be the fastest-growing segment of the overall market for integrated systems, reaching almost $5 billion by 2019.
In the last quarter, the company’s AHV built-in hypervisor saw 75% year-over-year growth in adoption (based on a four-quarter rolling average of nodes using AHV, as a percentage of total nodes sold).
Moreover, the company launched Xi Cloud Services in strategic partnership with Alphabet (GOOGL - Free Report) division, Google.
Management expects revenue mix shift towards software to help the company achieve long-term gross margin target of 63-65% as compared with 59% in fiscal 2016. Improving cost structure will help Nutanix achieve non-GAAP operating margin target of 15-18% in the long haul.
We believe that Nutanix’s expanding product portfolio through the launch of Nutanix Cloud and Xi cloud services along with networking and security will continue to boost its clientele. Moreover, collaboration with International Business Machines Corporation (IBM - Free Report) is also positive. This will improve its competitive position against the likes of Cisco Systems Inc (CSCO - Free Report) in the long haul.
Can Hackers Put Money INTO Your Portfolio?
Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Download the new report now>>