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It Is Time to Buy Nutanix (NTNX) Stock on Weakness, Says Top Analyst


Nutanix (NTNX) investors got cold feet this week, sending shares tumbling nearly 11%. The reason? A story published on Monday by an American blog called The Information claimed that Google is trialing on-premise devices that combine server, storage and networking in a few large customers’ private-cloud data centers. However, a spokesperson for Google told CRN, “We can confirm that we are not building customized appliances for external sale.”

RBC’s top analyst Matthew Hedberg commented, “Our view is that similar to AWS and Azure, we’re not surprised to see GCP show interest in private-cloud infrastructure (announced a version of Kubernetes that runs on premise in July), but believe partnering with vendors such as Nutanix (where there is an existing relationship) could make it easier. Furthermore, any talk of additional hybrid-cloud infrastructure further highlights the size of the market and we believe additional investments in product, distribution and service would be needed by GCP.”

“Overall our views on Nutanix and the opportunity remain unchanged as we find valuation attractive at 5.4x 2019 EV/S and 4.3x 2020 EV/S and are buyers on weakness. We look forward to the Google Cloud Summit in New York on Thursday and any additional details on their hybrid-cloud strategy,” the analyst added

As such, Hedberg reiterates an Outperform rating on Nutanix shares, with a price target of $70, which represents a potential upside of 50% from where the stock is currently trading.

Matthew Hedberg has a very good TipRanks score with a 84% success rate and a high ranking of #6 out of 4,876 analysts. Hedberg garners 34.6% in his yearly returns. When recommending NTNX, the analyst gains 45.7% in average profits on the stock.

Net net, this top analyst echoes the predominant bullish vote from the Street on the hyper-converged system maker, considering TipRanks analytics reveal NTNX as a Strong Buy. Out of 11 analysts polled in the last 3 months, 10 are bullish on Nutanix stock, while only one remains sidelined. With a return potential of 45%, the stock’s consensus target price stands at $67.70. (See NTNX’s price targets and analyst ratings on TipRanks)