Nutanix Shares Rally As Goldman Adds To 'Conviction Buy' List

Goldman Sachs analyst Simona Jankowski sees a lot to like about Nutanix Inc (NASDAQ: NTNX); she added the Buy-rated stock to Goldman's Conviction List and eyes a 53 percent return.

“We view Nutanix, the leader in hyperconverged infrastructure, as a once-in-a-decade tech infrastructure story that should benefit from a long runway of double-digit growth, high gross margins, and significant operating leverage,” she said. “We also view it as a scarce asset that could be a candidate for M&A.”

3 Growth Catalysts To Watch For

• 1. IT spending intentions are reaching record highs, and 18 percent of CIO’s are expected to move to hyperconverged appliances in the next two years (penetration is currently only at 3 percent).
  2. According to Jankowski, July VAR survey showed hyper converged infrastructure as the strong category of spend.
  3. The adoption of Nutanix’s FASB 2014-09 Topic 606 in August should improve the company’s revenue growth and profitability.

Overall, Janikowski believes the company could be worth as much as $36 per share if it were just a software company, but she set a $31 price target. Based on the 12 best performing analysts at Tipranks, the average price target is $30.63.

Nutanix was trading up 9.82 percent at $22.26, during Friday's pre-market session. To read the latest news and coverage on Nutanix check out the Benzinga Pro news feed.

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