Nutanix (NTNX)

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Rakers is basing his Nutanix bull thesis on four factors, he said:

• The deepening of the company's leadership position in HCI.
• Large-deal momentum.
• The company's strategic vision and execution.
• Attractive relative valuation.

The valuation will become even more compelling as Nutanix executes on an expanding software-only delivery model, with ASC 606 revenue recognition, Rakers said. Wells Fargo is positive on Nutanix' addressable market opportunity. The firm IDC estimates the HCI market will grow from $2.32 billion in 2016 to $7.64 billion by 2021. "This reflects an increase from 3 percent of on-premise spend on x86 servers and external storage in 2016 to approximately 10 percent [at the end of] 2021," Rakers said.

See also: Who's Impressed With Nutanix Following NEXT Conference?

Nutanix's top-25 customer repeat purchase multiple versus initial purchases has consistently expanded from 14.1x a year ago to 19.4x in July 2017, according to Wells Fargo. The firm views Nutanix' increasing software-only contributions as a positive, averaging 17 percent of total bookings for the rolling four-month quarters ending with the fourth quarter of fiscal 2017. Wells Fargo projects a revenue contribution from software in the mid-to-high 20 percent range in the third quarter of 2017 after the ASC 606 accounting standard is initiated. Microsoft Corporation (NASDAQ: MSFT)'s Azure stack and VMware, Inc. (NYSE: VMW)'s Cloud for AWS should be viewed as Nutanix' "important long-term competitors," Rakers said. .

Wells Fargo: Nutanix Valuation Could Become 'Even More Compelling'

Shares of Nutanix Inc. NTNX, +2.86% ran up 5.2% in morning trade Monday, putting it on track to close at an eight-month high, after Raymond James analyst Simon Leopold turned bullish on the enterprise-computing company for the first time, citing favorable checks that suggest continued sales momentum and competitive position. Leopold raised his rating to outperform, after being at market perform since he started covering the company in October 2016, about a month after the IPO. He initiated a stock price target of $32, which is 11% above current levels. Leopold said recent checks into its current business were "favorable," and said the company appears to benefit from a "conflicting pitch" by competitors. "Dell, EMC and VMware do not present a unified pitch, and customers are gravitating to Nutanix (iroincally, often promoted by Dell)," Leopold wrote in a note to clients. He expects Nutanix to beat revenue expectations when it reports fiscal first-quarter results on Nov. 28.

Nutanix's stock jumps after Raymond James turns bullish, citing competitive positioning - MarketWatch

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According to the IDC report, systems running Nutanix's hyperconverged software represented $497.7 million in total second quarter 2018 vendor revenue, or 34.2% market share. . VMware challenged Nutanix for the lead with 34.1% market share. Nutanix and VMware also face competition from Dell, Cisco, and HPE, with each owning around 5% market share. However, Nutanix and VMware have taken market share  over the last year. The HCI market is enjoying 78% growth and  gross margins over 80%, which will certainly attract competition, but Nutanix's new software focus puts the company in position to continue meeting the growing demand and maintain its position as a top dog in a growing industry.

Here's What the Market is Missing About Nutanix

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Taking quite a hit at Q2 2019..

Nutanix analyst commentary at BTIG  Nutanix price target lowered to $50 from $60 at BTIG. BTIG analyst Edward Parker lowered his price target on Nutanix to $50, saying the company's Q2 results were "strong" but the outlook for Q3 was "terrible". The analyst attributes the "fumble" to sales execution issues, lower than expected sales rep growth, and under-investment in demand generation activity in the past year. Parker is keeping his Buy rating on Nutanix however, saying the company remains the "standard bearer" in the "hyperconverged movement" in spite of its "alarming" revenue expectations reset and negative leverage on margins.

Breaking News: NTNX latest news. - The Fly

Nutanix analyst commentary at Maxim  Nutanix price target lowered to $62 from $72 at Maxim. Maxim analyst Nehal Chokshi lowered his price target on Nutanix to $62 after its Q2 earnings miss, saying that while the quarter's large deal metrics were solid, the weak billings growth suggests the company is "underspending on lead generation". The analyst also keeps his Buy rating on the shares and believes that sales productivity will recovery by mid-FY20.

Breaking News: NTNX latest news. - The Fly

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Nutanix downgraded to Perform after guidance reset at Oppenheimer. As previously reported, Oppenheimer analyst Ittai Kidron downgraded Nutanix to Perform from Outperform, stating that its guidance reset "reflects an emptied pipeline and a shortfall in sales headcount additions." Stating that Nutanix has tried to do too much with too little for too long, Kidron sees a probability that its upcoming analyst day will reset the growth and margin bar lower, he tells investors.

Breaking News: NTNX latest news. - The Fly

Nutanix rating change at Wells Fargo  Wells Fargo downgrades Nutanix to Market Perform, cuts target to $45. Wells Fargo analyst Aaron Rakers downgraded Nutanix to Market Perform from Outperform and lowered his price target for the shares to $45 from $70. After the company's guidance came in well below expectations, the analyst says Nutanix has transitioned from a "momentum to prove-it story." Rakers is cautious on near term sales execution as the company looks to reaccelerate pipeline growth and transition to a subscription-based model in a "continually competitive market."

Breaking News: NTNX latest news. - The Fly

Nutanix downgraded to Hold from Buy at Stifel. Stifel analyst Brad Reback downgraded Nutanix to Hold and lowered his price target for the shares to $39 from $55. While the company's fiscal Q2 results were largely in-line with Street forecasts, its Q3 outlook guidance fell "woefully short" of expectations as software and support revenue is targeted to grow in the high teens, Reback tells investors in a research note. He believes Nutanix's newer solutions have yet to reach the necessary scale to drive overall revenue growth rates.

Breaking News: NTNX latest news. - The Fly

Nutanix analyst commentary at Jefferies  Nutanix price target lowered to $42 from $48 at Jefferies. Jefferies analyst John DiFucci lowered his price target for Nutanix to $42 following the company's fiscal Q2 results and keeps a Hold rating on the shares. While the transition to a recurring revenue model is moving faster than expected, management lowered next quarter's revenue guidance by over $50M below the street, due to restrictive lead generation spending that impacted the sales pipeline, DiFucci tells investors in a post-earnings research note.

Breaking News: NTNX latest news. - The Fly

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Jefferies upgrades Nutanix (NASDAQ:NTNX) from Hold to Buy on an improved risk-reward balance after the over 30% pullback following last month's earnings report. Analyst John DiFucci highlights the company's "extremely sticky" core products. The analyst notes that some risks including macro competition remain but expects NTNX to continue expanding its footprint with existing customers while growing into new products.

Jefferies ups Nutanix on improved valuation - Nutanix, Inc. (NASDAQ:NTNX) | Seeking Alpha

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Nutanix analyst commentary at Morgan Stanley  Despite some positive signs, Nutanix has 'more work to do,' says Morgan Stanley. Morgan Stanley analyst Katy Huberty said Nutanix management highlighted early positive signs of rebuilding the deal pipeline during the company's analyst day meeting, though investments in lead generation will take time to have an impact and the April quarter "will still be tough," she tells investors. Though she acknowledges execution remains a risk, Huberty looks to sales growth re-accelerating in the first half of 2020 and maintains an Overweight rating on Nutanix shares with a $53 price target following the analyst event.

Breaking News: NTNX latest news. - The Fly

Nutanix analyst commentary at JMP Securities  JMP says Nutanix plans to improve sales execution should help ease concerns. After attending Nutanix's analyst day, JMP Securities analyst Erik Suppiger attributes management having noted some initial signs of success in re-accelerating the company's lead generation as the primary driver for yesterday's strength in the stock during the event. However, management tried to temper near-term investor enthusiasm with its subsequent comments, he noted. Management laid out plans to improve sales execution in response to the company's disappointing Q2 report, which Suppiger thinks will help to ease investor concerns. The analyst, who thinks Nutanix's expanding product line and upcoming refresh cycle should help it achieve its $3B billings goal in 2021, keeps an Outperform rating and $52 price target on the shares.

Breaking News: NTNX latest news. - The Fly

Nutanix analyst commentary at Jefferies  Nutanix price target raised to $49 from $42 at Jefferies. Jefferies analyst John DiFucci raised his price target for Nutanix to $49 from $42 saying he left yesterday's investor day more encouraged that the company's "technology foundation" will carry it through the "go-to-market issues of late." Nutanix shares can be "purchased here for the long haul," DiFucci tells investors in a research note. He points out Nutanix provided modified long-term guidance, updating the timing on its $3B in total software and support billings to calendar 2021 from fiscal 2021. This implies a two quarter delay from prior guidance and represents annual growth of 33% from 2018 billings, the analyst says.

Breaking News: NTNX latest news. - The Fly