Nutanix (NTNX) Gains as Results and Outlook Come Ahead of Expectations, Analyst Raises PT on Rising Confidence
Shares of Nutanix (NASDAQ: NTNX) are trading around 7% higher in pre-open Thursday after the company delivered better-than-expected FQ4 results and guidance.
Nutanix reported an FQ4 EPS loss of $0.26 to easily exceed the analyst estimate of $0.42. Revenue for the quarter came in at $390.72 million versus the consensus estimate of $362.88 million.
“Our fourth quarter was a strong end to an excellent fiscal year, which was marked by consistent execution and solid progress across both financial and strategic objectives,” said Rajiv Ramaswami, President and CEO of Nutanix. “We have entered our fiscal 2022 with good momentum and a solid plan for growth, executing on the model we laid out at Investor Day and delivering on our vision of making clouds invisible.”
On the guidance front, NTNX said it expects ACV billings between $172 million and $177 million in FQ1.
CFO Duston Williams said he expects FY2022 to be marked by the “growing base of low-cost renewals [that] will drive further improvements in top and bottom line performance.”
Needham analyst Jack Andrews raised the price target to $64.00 per share from the prior $61.00 as renewal stream should drive further gains.
“NTNX reported strong 4QFY21 results as multiple metrics (ACV billings, total billings, emerging
product billings, million-dollar deals) all reached record levels. Our key takeaway is that NTNX appears to be progressing favorably against its analyst day targets (06/21) that call for a 25% ACV and a 20% revenue CAGR through FY25. We believe the company continues to benefit from its ACV-based transition as sales productivity remains elevated and new ACV grew meaningfully. Moreover, NTNX has yet to realize the full benefits of its burgeoning renewal stream, which is expected to grow from 13% to 25% in FY23 and drive leverage even further. We believe NTNX remains well-positioned to manage the growing quantity of hybrid and multi-cloud workloads and has a more transparent path towards higher growth and expanding margins,” Andrews said in a note on the Buy-rated NTNX.
Oppenheimer analyst Ittai Kidron maintained an Outperform rating and a $44.00 per share price target on NTNX on rising confidence ahead of the key renewal cycle.
“Nutanix delivered better than expected results for F4Q21, with almost all metrics above consensus. Positives include strong emerging product ACV (up over 100% YoY), multiple product adoption (41% of deals involving 1-plus emerging products), and solid new- (+16%) and large-customer gains (>$10M lifetime bookings +42%). Looking ahead, we see potential growth levers (product bundling, price optimization, partnerships) and execution priorities (portfolio simplification, accelerate subscription adoption, improve sales/GTM/investment efficiency) as drivers for future performance. A robust renewal activity starting in 4Q will be critical in the company's ability to deliver to its cash flow and profitability targets. As management shows it can deliver the consistency investors expect, we believe upside and multiple expansion will follow. Adjusting estimates given results/outlook,” Kidron wrote in a note sent to clients.
Shares of the company are up 18%.