7 Reasons to Buy Nutanix (NTNX) Today, PT Raised to $46 at BofA Securities
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(Updated - June 18, 2021 7:46 AM EDT)
BofA Securities analyst Wamsi Mohan raised the price target on Nutanix (NASDAQ: NTNX) to $46.00 (from $39.00) ahead of several positive factors likely to impact results:
1) We expect a material financial update focused on driving more predictable and profitable growth
2) New metrics including New and Renewal ACV mix and associated costs
3) Trajectory to positive FCF (buyside likely at F25 and company could surprise positively)
4) Leader in Hybrid cloud and HCI (see our survey results note)
5) Increased potential to upsell Enterprise and Essential suite of products
6) Realize the benefits of moving to a subscription model
7) Increased traction from OEM partnerships (Lenovo, HPE, DELL)
8) Increased focus on Hyperscalers and go to market with Global System Integrators.
The analyst reiterated a Buy rating, stating "With the transition to subscription largely behind, we expect Nutanix revenues to become increasingly predictable and profitability to inflect higher with a growing percentage of renewals that should come at a much lower incremental cost. We expect renewals as a % of revenues to reach double digits in F23 and move materially higher by 2025 as prior tranches of 3 and 5 year deals approach end of term. Nutanix will quantify incremental cost for renewals that should drive increasingly favorable LTV/CAC ratios."
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