Market Overview

A Nutanix Bull Explains What The Street May Be Misunderstanding

A Nutanix Bull Explains What The Street May Be Misunderstanding

Nutanix Inc (NASDAQ: NTNX), a provider of an operating system that converges silos of servers, virtualization and storage into an integrated solution, saw its stock soar more than 100 percent during its first day of trading in 2016 and closed the day at $37. The stock hasn't traded near this level since then, which prompted at least one analyst to claim the company is being misunderstood. 

The Analyst

Needham's Jack Andrews initiated coverage of Nutanix's stock with a Buy rating and $45 price target.

The Thesis

Nutanix is uniquely positioned to deliver a "disruptive product that solves customer pain points," Andrews said in the iWednesday note. (See Andrews' track record here.)

The company was founded in 2009 with the objective of providing all enterprises with "Google-like (or web scale) data centers" without the "headaches involved" in scaling and maintaining the data center, Andrew said. Nutanix's 68 percent revenue growth rate in fiscal 2017 shows the company should be able to at the very least sustain a growth rate that is "well above" its peers for the foreseeable future, the analyst said. 

Perhaps more important to the case for owning Nutanix's stock is recognizing where the bears are wrong, the analyst asaid.

Nutanix bears are saying the company is a "commodity hardware player" instead of Andrews' preferred description: "a next generation data center operating systems company."

Nutanix has "significant longer term upside" if investors view Nutanix as a pure-play software name, Andrews said, "which we believe is likely given the true value proposition of its product portfolio and vision."

Price Action

Shares of Nutanix were trading higher by more than 6 percent Wednesday morning but still down more than 12 percent since its IPO.

Related Links:

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

Analyst: 4 Reasons Why Nutanix Market Trends Are Stable

Latest Ratings for NTNX

Nov 2019MaintainsMarket Perform
Nov 2019MaintainsHold
Nov 2019MaintainsEqual-Weight

View More Analyst Ratings for NTNX
View the Latest Analyst Ratings

Posted-In: Data Center Jack Andrews NeedhamAnalyst Color Price Target Initiation Top Stories Analyst Ratings Best of Benzinga


Related Articles (NTNX)

View Comments and Join the Discussion!

Latest Ratings

KSURaymond JamesReiterates188.0
WTRB of A SecuritiesDowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at