Expect A Strong Debut Quarter From Nutanix

BTIG expects better-than-expected numbers from Nutanix Inc (NASDAQ: NTNX), which will report its first quarterly numbers as a public company on Tuesday.

Analyst's Expectations

Analyst Edward Parker sees a loss of $0.40 a share and revenue of $149 million for the first quarter, while Street expects a loss of $0.44 a share and revenue of $152.25 million.

“We’re expecting a strong debut quarter from Nutanix as healthy underlying demand for hyper-converged solutions and continued go-to-market momentum should drive upside to consensus forecasts,” Parker wrote in a note.

Parker expects revenue and billings upside after his positive checks on the HCI trend and conservative sell-side assumptions. The analyst estimates 69 percent growth in billings to $217 million versus consensus forecast $213 million.

Looking Even More Ahead

That said, longer-term concerns about growth and margin sustainability keeps the analyst on the sidelines and rate the stock Neutral.

Parker believes the company needs to focus more on the high-margin software services portfolio, and the company too has added initial networking and security services.

“However, we don’t think software is hauling the mail yet. We look to software mix and gross margin as a way to gauge progress,” Parker continued.

Shares of Nutanix closed Friday’s trading at $34 and the analyst is looking for lock-up expiration (3/29/17) as potential opportunity to buy the stock at more compelling risk/reward.