Strong End-Customer Demand And Industry-Leading Billings Growth Seen At Nutanix

Pacific Crest Securities initiated coverage on Nutanix Inc (NASDAQ: NTNX) with an Outperform rating and a price target of $37, implying an upside potential of more than 25 percent from the current levels. The firm cited strong demand for end-customer for hyperconverged solutions and other positives, like best-in-class billings growth, as reasons for the bullish outlook.

Analysts Alex Kurtz and Steve Enders believe Nutanix has an expanding software business with enough room for margin outlook in the long term, thus boosting investor confidence. These favorable points support the premium valuation of the stock.

The brokerage pointed out that Nutanix QoS software differentiated itself from the rest with its standout features and scalability. As a result, IT firms could replicate the automation with the help of storage, virtualization and networking in a single appliance.

Related Link: What's So Special About Nutanix?

"In many customer use cases, this lowers data center operating expenses by 20 percent to 50 percent. Nutanix has quickly scaled to approximately 3,800 customers from 800 two years ago on key capabilities within its Distributed Storage Fabric (DSF; high availability) and App Mobility
Fabric (AMF; support across multiple hypervisors)," Pacific Crest said in a research note to clients.

At last check, the stock fell 2.19 percent to $29.12.

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