Two Bulls Sound Off on Why Nutanix Inc (NTNX) Is a Valuable Buy

William Blair likes NTNX's value-added reseller buzz on demand; Jefferies spotlights software advantage.


Nutanix Inc (NASDAQ:NTNX) has gotten two back-to-back bullish votes in its favor between value-added reseller (VAR) whispers pointing to compelling demand and adoption as well as corporate enthusiasm making a case for why the company’s “hypervisor technology” has the upper edge. With two research notes trumpeting the enterprise infrastructure equipment maker yesterday, investors sent shares on a 12% climb, clearly hanging on the upbeat calls from two analysts.

In one positive corner stands William Blair analyst Jason Ader, who finds his “conviction is rising to new levels” on the heels of VAR discussions from merchants who have business dealings selling Nutanix’s hardware and software products.

In reaction, the analyst maintains an Outperform rating on NTNX stock without listing a price target. (To watch Ader’s track record, click here)

Adler writes, “the demand pendulum appears to be swinging toward emerging, best-of-breed vendors with more modern approaches and away from traditional, one-stop shop vendors that are often viewed to be out-of-step with the latest trends,” elaborating: “Recent VAR discussions point to broad adoption of Nutanix products (including Dell XC-branded appliances running Fiscal Year End: July Nutanix software) in the October quarter, across both the midmarket and large enterprise.”

After what looks to be “a very strong quarter for large deals, including multiple deals in the high seven-figure range (several of these in the federal vertical),” Ader has become all the more confident on Nutanix’s opportunity in the tech industry.

Jefferies analyst James Kisner cheers from another corner, eager on Nutanix’s leverage in the playing field on back of a conference call hosted by Nutanix’s head of product marketing Greg M. Smith along with head of engineering Greg A. Smith. The verdict of the Smiths? The current share price “doesn’t properly reflect the value of Nutanix’s software business.”

Therefore, the analyst reiterates a Buy rating on the stock without suggesting a price target. (To watch Kisner’s track record, click here)

Kisner highlights the most important takeaways of this meeting that have left him continuing to root for the tech player: “Nutanix believes a key differentiated capability of the inclusion of AHV in its software stack is the ability to balance storage hotspots. Nutanix can observe SSD utilization within a particular node and migrate virtual machines to make use of unused capacity in other nodes. Having an in-house hypervisor also allows Nutanix to able to do rapid prototyping and deploy new features because they aren’t relying on a third party’s hypervisor for updates and bug fixes. For example, NTNX is developing a new storage I/O path that leverages some of the unique properties of NTNX’s storage controller to create ‘vast improvements’ in performance and efficiency. Nutanix is planning to offer a variety of new virtualization features over the next couple years. Nutanix can also more rapidly leverage new hardware innovation as well; the company pointed to being able to leverage offload capabilities on NICs as an example.”

These analysts are not the only fans of the tech company on Wall Street, as TipRanks analytics exhibit NTNX as a Strong Buy. Based on 14 analysts polled by TipRanks in the last 3 months, 11 rate a Buy on Nutanix stock while 3 maintain a Hold. The 12-month average price target stands at $31.09, marking a 21% upside from where the stock is currently trading.  NTNX analyst ratings chart