“While we expect some will debate if lead metrics were only driven by the large deal signed last quarter, underneath it would suggest execution drove FQ4 results, and management commentary will be viewed as incrementally better Q/Q,” said Piper Sandler analysts James Fish and Quinton Gabrielli, in an investor note.
As a result, Piper Sandler rates Nutanix Overweight, and as a ‘top-pick,’ and slightly increased its price target to $77 from $76.
“Management still sees strong renewal activity going on, in addition to the various new business opportunities in-front of Nutanix, particularly around the partnerships, Cisco (CSCO) and Dell (DELL), and VMware replacements,” they added.
Nutanix has taken advantage of competitor VMware’s acquisition by Broadcom (NASDAQ:AVGO) as the transaction created some uncertainty among customers.
“A lot of the big customers at the very top of the pyramid were very sensitive and aware,” said Nutanix CEO Rajiv Ramaswami, on Wednesday night’s earnings call during the question and answer session. “As soon as the Broadcom deal was announced, they started thinking about what they were going to do.”
Morgan Stanley maintained its Equal-weight rating on the stock, but increased the price target to $71 from $62.
“We think NTNX has a strong value proposition and share gain opportunity; our hesitancy has been on timing of that opportunity along with valuation,” said Morgan Stanley analysts Meta Marshall and Mary Lenox. “We walk away encouraged that channel incentives could help bridge to a more attractive VMware share gain opportunity.”
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