Nutanix Inc (NASDAQ:NTNX) shares are down slightly Thursday, but analysts at Bank of America are bullish on the cloud computing company going forward.
The firm upgraded Nutanix stock to Buy with a price target of $50 (up from $39). The company’s shares traded 0.2% lower Thursday afternoon at $33.67.
“We see fundamentals improving over the next few years including [average contract value] billings, revenue, and operating margin,” the analysts wrote. “We see renewals driving a higher portion of ACV billings growth post F24, which can lead to more stable revenues, and expect operating leverage through lower cost of renewals.”
BofA pointed to the company’s "GPT-in-a-Box" offering and its recent partnership with Cisco as both potential growth drivers.
“NTNX recently launched ‘GPT-in-a-Box,’ a full stack, software-defined platform that provides AI-ready infrastructure which customers can use to run generative pre-trained transformers,” analysts wrote.
“NTNX recently announced a partnership with Cisco which combines the Nutanix cloud platform with Cisco's UCS compute, cloud management, networking and security. NTNX will benefit from Cisco's extensive go-to-market reach as it sells NTNX's hybrid multi-cloud software.”
Nutanix investors will also be watching the upcoming acquisition of VMware by Broadcom.
“If Broadcom chooses to limit its focus to VMware's largest customers, we see the opportunity for NTNX to gain share at other customers,” the analysts added.
Looking ahead, Nutanix plans to hold an investor day on September 26.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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