Things to know ahead of Nutanix Q4 earnings results

When cloud computing software company Nutanix (NASDAQ: NTNX) last reported quarterly results, it missed its own top-line projection, as well as that of analysts’. This came out as a double-whammy, as the management’s projection range was already criticized as weak.

The weak third-quarter results were accompanied by another set of disappointing guidance, which sent the stock plunging 15%.

The hybrid cloud infrastructure company will next report quarterly results on Wednesday, August 28, after the regular trading hours. For the fourth quarter, analysts expect a wider loss of 64 cents per share on revenues of $293.86 million, down 3% year-over-year.

In the past two months, the bottom-line estimate has been widened by two cents from the prior estimate of 62 cents per share loss. This bottom-line revision gives a dismal picture of the upcoming earnings, as it suggests increasing pessimism approaching the announcement date.

However, it may be noted that the company has surpassed earnings estimates in all four trailing quarters.

In the past 12 months, NTNX stock has declined 64% and is trading near a multi-year low. During the same period, iShares Expanded Tech-Software (IGV) has gained 10%. The company will be hoping to see a reversal in the trend post Q4 earnings announcement.

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Last month, the stock got a breather following months of decline, after Jason Ader of William Blair said in a research note that he believes the stock could be on the verge of an upswing.

“According to multiple VARs (value-added resellers), the pipeline expansion has been supported by aggressive sales hiring at Nutanix and increasing sales coverage,” he said, adding their July business saw a higher number of seven-figure deals.

Though the company is expected to benefit from numerous deal wins and a healthy pipeline, the company’s failure to deliver with regards to sales hiring issues and marketing spend will act as dampeners. Tightening competition is also an area of concern.

On Thursday, rival VMware (NYSE: VMW) reported second-quarter earnings and revenue surpassed both analysts estimates and the company’s projection for the quarter. The company also announced that it will acquire Pivotal Software and Carbon Black for a total value of $4.8 billion.

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