Pacific Crest maintains its Overweight rating on Nutanix Inc NTNX despite shares are in the negative territory on the company’s bookings commentary.
On the call, Nutanix noted that large deals are usually 45 percent of bookings with second quarter down from that level.
Analyst Commentary
“At first glance, these changes and impacts appear consistent with historical changes we have seen across the peer group,” analyst Alex Kurtz wrote in a note.
That said, Nutanix’ customer additions hit a record at 909, helping drive a modest revenue beat, with a gross-margin headwind from elevated component costs.
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Kurtz noted that the core issue for the remainder of F 2017 is enhancements to the North American sales organization that are temporarily depressing large-deal flow and execution.
“Our longer-term thesis is intact, but execution risk rises, at least through October,” Kurtz added.
As such, the analyst cut his target price to $34 from $38.
At last check, shares of Nutanix plunged 20 percent to $24.82.
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