Nutanix (NTNX) Stock is Rallying Following Q3 Earnings, Analyst Says Shares Still Looks Undervalued

November 24, 2021 8:59 AM EST
Get Alerts NTNX Hot Sheet
Price: $32.60 +1.05%

Rating Summary:
    18 Buy, 7 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 25 | Down: 13 | New: 72
Trade Now! 
Join SI Premium – FREE

Get inside Wall Street with StreetInsider Premium. Claim your 1-week free trial here.

Shares of Nutanix (NASDAQ: NTNX) are up more than 5% in pre-open Wednesday after the company reported better-than-expected Q3 results.

Nutanix reported Q1 EPS of ($0.22) to easily top the analyst estimate of ($0.34). Revenue for the quarter came in at $378.5 million versus the consensus estimate of $367.04 million.

“Our first quarter was a good start to our fiscal year, demonstrating strong year-over-year top and bottom-line improvement,” said Rajiv Ramaswami, President and CEO of Nutanix. “We continued to execute towards our targets of free cash flow break-even in the second half of calendar 2022 and a 25 percent-plus ACV billings CAGR through fiscal 2025.”

For this quarter, NTNX is calling for sales between $400 million and $410 million while the analyst consensus was $399.94 million. On a full-year basis, Nutanix is seeking revenue between $1.615 and $1.63 billion, versus the consensus of $1.6 billion.

JMP analyst Erik Suppiger reiterated a Market Outperform rating and a $48.00 per share price target on positive earnings and guidance.

“We continue to believe NTNX is undervalued at 3.2x our EV/CY23E revenue as the underlying momentum in the business reflects some numbers achieving the first high watermark in two years, such as ACV billings growth, and this momentum is broad-based across the entire hybrid multi-cloud portfolio for both core and emerging products. We believe these developments will foster durable growth, especially in the context of the low-cost subscription renewals, which will increase leverage in the model, in addition to the company’s increasing focus on technology partnerships with other best-of-breed providers for virtualized applications and multi-cloud environments,” Suppiger said in a report to clients.

Wells Fargo analyst Aaron Rakers lowered the price target to $40.00 per share from the prior $42.00 on the Equal Weight-rated Nutanix stock.

“With increased predictability from subscription renewals (focus on acceleration in F4Q22) and consequent opex leverage, as well as solid FCF execution/tracking toward positive FCF in 2H C2022, we believe shares are justifiably trading higher as NTNX provided investors with increased confidence in the company's path to profitability,” Rakers wrote in a note.

Nutanix shares closed at $32.58 yesterday.



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Analyst Comments, Analyst PT Change, Earnings, Guidance, Hot Comments, Hot Earnings

Related Entities

Earnings, Wells Fargo, Pre Market Movers