Nutanix (NTNX) PT Lowered to $65 at JPMorgan

JPMorgan analyst Mark Murphy lowered the price target on Nutanix (NASDAQ: NTNX) to $65.00 (from $80.00) while maintaining a Overweight rating.

The analyst comments "While we think the setup for the July quarter looks achievable, we are tactically cautious going into the print, especially with respect to the FY25 (July) guidance. Due to several factors (explained below), some of which are more cosmetic in nature and are positive for the company longer term, we think the company will likely continue to maintain a conservative posture with respect to its first blush full-year guidance, likely landing closer to the lower end of the FY25 milestones shared in its 2023 investor day, for both revenue and ARR. While Nutanix shares have outperformed the software index YTD (NTNX +10% vs. IGV +6%), shares have lagged the market from the highs in late May prior to FQ3 (NTNX -28% since 5/21/2024 vs. IGV +2%), potentially already partially pricing in some of the uncertainty around guidance. For context, this muted outlook would still represent high teens growth for ARR at an over $2B scale, while generating low 20s% FCF margin. We continue to like the story with a medium-term view, and we will be buyers of Nutanix in case of any weakness in the shares post print. We continue to think that Nutanix is in a position of strength today to prosecute a growing opportunity ahead, whether it be from a product-portfolio point of view, or from a financial model point of view, or from a market position point-of-view, with execution risk as the primary risk to the story at this point."

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