Cloud computing company Nutanix Inc (NASDAQ:NTNX) is scheduled to report its fiscal fourth-quarter results after the markets close on Wednesday.

The company is likely to report broadly in-line results, with revenue growth being driven by Nutanix Cloud Infrastructure software, according to Rosenblatt Securities.

The Nutanix Analyst: Analyst Blair Abernethy reiterated a Buy rating, while raising the price target from $60 to $75.

The Nutanix Thesis: For the fiscal third quarter, the company had reported strong bookings and had outperformed guidance, "reflecting strong demand for Nutanix solutions," Abernethy said in the note.

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Nutanix also added more than 700 new logos and reported a net retention rate of 106%, he added.

Expectations For Q4: The analyst noted that the company is likely to report the following for the fiscal fourth quarter:

  • Total revenue of $735.5 million, up 13% year-on-year, versus consensus of $738 million.
  • Product revenue $374 million, up 10% year-on-year, driven by Nutanix Cloud Infrastructure software.
  • Support and other services revenue of $362 million, up 15% year-on-year.
  • Non-GAAP operating margin of 22%, in-line with consensus.
  • Non-GAAP earnings of 48 cents per share, versus consensus of 49 cents per share.
  • Non-GAAP operating income of $162 million.
  • Adjusted net income of $138.5 million.

"We continue to see Nutanix as a leading modern platform provider that powers hyperconverged IT infrastructure ("HCI")—integrated compute, storage, and networking for data centers, with a substantial and growing large enterprise customer footprint and market share gainer," Abernethy wrote.

Nutanix had reported an ARR (annual recurring revenue) of $2.4 billion and is likely to announce ARR in the range of $2.5 billion, up 15% year-on-year, the analyst said. The company is likely to generate low teens ARR growth next year "as tight hardware supply conditions likely persist most of the year," he added.

NTNX Price Action: Nutanix shares were down 0.36% at $66.44 at the time of publication on Tuesday, according to Benzinga Pro data.

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