Nutanix stock falls on fears of sales miss, but one analyst says his data shows otherwise
Nutanix Inc. shares fell Thursday on concerns that the hyperconverged-infrastructure company would report below-expectation sales in less than two weeks, but one analyst challenged that assessment.
Nutanix NTNX, -7.57% shares dropped as much as 9% to an intraday low of $32.55 at last check. Even with the drop, shares are up 57% over the past 12 months, compared with a 30% gain in the S&P 500 index SPX, +0.13%. The decline would be the largest since shares dove 9.2% in February after poor earnings guidance.
On Thursday, research firm OTR Global reportedly downgraded Nutanix to a “mixed” rating from “positive,” citing checks that indicated that fourth-quarter sales would come in below expectations as customers are taking longer to make purchase decisions. Analysts surveyed by FactSet expect a fourth-quarter loss of 42 cents a share on revenue of $362.9 million, or an 11% increase from the year-ago period.
Piper Sandler analyst James Fish, however, said that his checks into the HCI sector were “quite strong” overall. HCI, or hyperconverged infrastructure, essentially combines computer storage and servers in a hybrid-cloud product, allowing businesses to access on-site computing power as well as public-cloud assets.
Fish, who has an overweight rating on Nutanix, called the pullback “a strong opportunity” to buy the stock before the company’s fiscal fourth-quarter report scheduled for Sept. 1.
“Our checks of 32 respondents for Nutanix, which includes some of the largest global channel partners, were the most positive in 7 quarters and suggest 3% upside in FQ4,” Fish said.
Fish also said that shares were down “following a competitors’ report about FQ4 results coming in below plan, albeit the FQ1 pipeline being stronger.”
Fish did not name names, but the only Nutanix competitor that reported its fiscal fourth-quarter results recently was Cisco Systems Inc. CSCO, +3.84% late Wednesday. Cisco’s fourth-quarter results, however, were slightly above its own and Wall Street’s estimates.
Published: Aug. 19, 2021 at 3:13 p.m. ET
By Wallace Witkowski