Nutanix, Inc. (NTNX), a hybrid multi-cloud computing company, delivered better-than-expected fourth-quarter results with record annual contract value (ACV) billings of $176.25 million and quarter-end annual recurring revenue (ARR) of $878.73 million. Shares popped 4.2% on the news in the extended trading session on September 1.
Nutanix reported a fourth-quarter loss of $0.26 per share, much better than analysts’ estimated loss of $0.42 per share. In the year-ago period, Nutanix posted a loss of $0.39 per share.
Additionally, revenue climbed 19% to $390.72 million compared to the prior-year period and significantly surpassed the Street’s estimate of $362.88 million. (See Nutanix stock charts on TipRanks)
For the full year 2021, Nutanix’s annual revenue increased 7% to $1.39 billion and the loss per share stood at $1.48, better than the prior year’s loss of $2.39 per share.
Rajiv Ramaswami, President and CEO of the company, said, “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.”
Impressed by the company’s solid results, Needham analyst Jack Andrews assigned a Buy rating to the stock and lifted the price target to $64 (73.2% upside potential) from $61.
Andrews said, “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.”
Furthermore, the analyst believes Nutanix is 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.
The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 6 Buys and 5 Holds. The average Nutanix price target of $48.11 implies 30.2% upside potential to current levels. Shares have gained 34.6% over the past year.
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