Nutanix Hits Its Stride In Q4, But Is The Stock Fully Valued Now?

Shares of Nutanix Inc NTNX opened higher by more than 7 percent Friday after the company's earnings report impressed many investors. However, it didn't win over BTIG's Edward Parker.

Parker maintains a Neutral rating on Nutanix's stock with a $22 price target as the earnings report does show that recent poor executions in prior quarters amount to a "hiccup." Of particular note, the company benefited from strong momentum in big deals and a steady expansion of its software merely adds "credibility to the narrative" (see Parker's track record here).

The problem is that Nutanix still suffers from a reputation that is just a provider of collapsed storage and compute, the analyst continued. Moreover, the extent to which the company is able to improve on its image and successfully re-platform its entire enterprise infrastructure stack and become a "de-facto enterprise OS" play is a "tall order and still very much an open question."

With that said, the long-term concerns surrounding Nutanix's growth and margin sustainability offset the otherwise constructive view that the company presented in its earnings report, Parker added. Meanwhile, the stock is trading at 3.3x fiscal 2018 EV/revenue estimates which are already at the high-end of its comparable peers.

At time of publication, shares of Nutanix were up 3.86 percent at $22.85.

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