Please ensure Javascript is enabled for purposes of website accessibility

Why Nutanix Inc. Stock Jumped Friday

By Daniel Sparks - Dec 1, 2017 at 11:30AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Better-than-expected results and a shift in its business model have investors looking up. Here are the details.

What happened

Enterprise cloud computing company Nutanix (NTNX 3.34%) saw its stock rise as much as 16.7% on Friday, following the company's first-quarter results for fiscal 2018. The stock is up 6.8% at the time of this writing.

The stock's rise is likely due to better-than-expected revenue and earnings per share, as well as confirmation from management about its plans to shift toward a software-centric business model.

A chart showing a stock price moving up

Image source: Getty Images.

So what

Nutanix reported revenue of $276 million, up 46% year over year. On average, analysts were expecting revenue of about $267 million. Nutanix's non-GAAP loss per share was $0.16 -- narrower than a consensus analyst estimate for a loss of $0.26.

Now what

Nutanix CFO Duston Williams said the company "will be focusing even more intently on selling software going forward." Williams went on to note that Nutanix would have registered about $800 million in pure software and support billings, as well as non-GAAP gross profit margins above 80%, over the past 12 months if it had not billed "pass-through hardware-related transactions."

Looking to Q2, Nutanix expects revenue to be between $280 and $285 million, including the elimination of about $12 million in pass-through hardware sales.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Nutanix Stock Quote
Nutanix
NTNX
$15.48 (3.34%) $0.50

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.