All You Need To Know To Prepare For Nutanix Q2 Results

RBC Capital expects Nutanix Inc NTNX to report a solid quarter with upside to consensus expectations and to increase guidance when they report its second quarter results on March 2.

Analyst Matthew Hedberg, who maintained his Outperform rating and $38 price target, expects EPS of $(0.36) on revenue of $177.5 million versus consensus estimates of $(0.35)/ $178.4 million.

“Similar to Q1/17, we'd expect the focus to revolve around upside to estimates/guidance, software/hardware mix, margin improvement, an updated view on the competitive environment following HPE's acquisition of SimpliVity,” Hedberg wrote in a note.

Further, the analyst expects continued momentum with a focus on new features, including app mobility.

Related Link: Nutanix Is Upending The IT Infrastructure Playbook

Hedberg noted any margin upside is a positive catalyst and expects the billings to revenue ratio to return to the trends they saw 4-6 quarters ago, which would imply a ratio closer to about 1.27x.

Hedberg also pointed out that HPE's acquisition of SimpliVity would not significantly change the competitive landscape and believes Nutanix win-rates should remain elevated. The analyst estimates robust global 2,000 customer additions versus 65 quarter-over-quarter and 29 year-over-year.

“[W]e feel Nutanix should continue to disrupt a multi-billion dollar hybrid cloud infrastructure market,” Hedberg added.

Shares of Nutanix closed Wednesday at $30.73.