Market Overview

Jefferies Downgrades Nutanix, Says Cloud Company Is Trading At Fair Value

Jefferies Downgrades Nutanix, Says Cloud Company Is Trading At Fair Value

Nutanix Inc (NASDAQ: NTNX) shares have soared 155 percent in the past year, prompting Jefferies to downgrade the cloud stock. 

The company is scheduled to release fiscal fourth-quarter results after the market close Aug. 30.

The Analyst

Analyst John DiFucci downgraded Nutanix from Buy to Hold with a $60 price target.

The Thesis

The success achieved by Nutanix over the past year is adequately reflected in shares, although more success is likely to come, DiFucci said in a Friday note. (See the analyst's track record here.) 

Jefferies updated its estimates to reflect Nutanix's upwardly revised operating expenses guidance. 

Notwithstanding the guidance revision, Nutanix said it would maintain its rule of 40 expectations for software revenue growth and the free cash flow margin.

Nutanix is in the process of transitioning its business toward a pure software model, eliminating the sales of pass-through hardware, DiFucci said. 

"We have always viewed Nutanix as a software business and believe that the transition will ultimately benefit the company," the analyst said. 

"However, like all transition stories, the model has become more difficult to forecast."

The Price Action

Nutanix shares were sliding 5.75 percent to $52.46 at the time of publication Friday.

Related Links:

Nutanix Shares Whipsaw On Poor Earnings, Positive Analysts

Nutanix Shares Under Pressure Following Public Cloud Delay

Latest Ratings for NTNX

Sep 2019UpgradesNegativePositive
Aug 2019MaintainsOutperform
Aug 2019MaintainsEqual-Weight

View More Analyst Ratings for NTNX
View the Latest Analyst Ratings

Posted-In: Jefferies John DiFucciAnalyst Color Downgrades Analyst Ratings Best of Benzinga


Related Articles (NTNX)

View Comments and Join the Discussion!

Latest Ratings

ELMDDougherty & Co.Initiates Coverage On12.0
MRNSCantor FitzgeraldAssumes7.0
MNRLCapital One FinancialInitiates Coverage On23.0
SONVertical GroupUpgrades
UNPMorgan StanleyMaintains136.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
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.
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

Mid-Morning Market Update: Markets Open Lower; Deere Profit Misses Views

10 Biggest Price Target Changes For Friday