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Nutanix, Inc. (NTNX)

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15.48+0.50 (+3.34%)
At close: 04:00PM EDT
15.35 -0.13 (-0.84%)
After hours: 07:58PM EDT
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  • V
    Veeru
    All, last week some of the top management converted their options to shares and the sold part of these. I guess these options are part of their compensation package. I am wondering the reason behind selling shares by the top management at such a lower price. Can someone please throw more light in it? Is it a common practice to sell some shares when options are converted to shares to manage the tax liabilities?
  • R
    Raymond
    JP Morgan is out with a note on Thursday. They're predicting the S&P will reach 4,800 by year end, up around 25% from the current level: "We do not see a recession as a base case over the next 12 months. In fact, we see global growth accelerating from 1.3% in the first half of the year to 3.1% in the second half. This backdrop combined with near record low investor positioning offers an increasingly attractive risk reward outlook going into the second half of the year."

    Keep in mind that NTNX is a stock that JP Morgan likes. They bought 65,000 shares in Q1, and owned a total of 365,000 shares on March 31.
  • M
    Mark
    Hold your shares. All evidence is pointing to a sale and to MSFT.
    The last year the board and management have been positioning the company for this.
    MSFT did 18 billion in cloud sales. It wants more.
    Azure manages the services.
    NTNX would fill the hole underneath the management layer.
    It would make a powerful 1 2 punch for their web services.
    MSFT has 168 billion in cash and stock 246 a share.

    The only part left is the price of what the shareholders will take.

    Just saying.
  • R
    Raymond
    Patrick Palfrey at Credit Suisse is out with a note on Friday: "People are calling for a decline in earnings but we're not seeing it. The selloff this year in the stock market is being seen as a foreshadowing of an economic and corporate profit crisis, but we're not seeing it in the fundamental data."

    Sounds like Credit Suisse is probably adding to their position in NTNX. They bought 16,000 shares in Q1, and owned a total of 210,000 shares as of March 31.
  • R
    Raymond
    Nutanix, a leader in hybrid multi-cloud computing, has announced that it has assisted South African ISP CipherWave with an upgrade to the infrastructure of CipherWave’s private cloud environment.

    CipherWave is a South African Tier 1 ISP offering connectivity, cloud, voice and security services, with a network footprint that connects to all major FNO and WNO networks with coverage across the country.

    The company has core network POPs located at the CipherWave datacentre in Midrand, and the Teraco Johannesburg, Cape Town and Durban data centres. CipherWave’s Tier 1 voice network has direct interconnects with all the major Tier 1 voice value-added service and mobile network operators.

    CipherWave’s cloud offering is built inside its own Tier 2 data centre in Johannesburg, with dual dark fibre links to its disaster recovery site hosted in Teraco Isando, with direct interconnects into all major public clouds.

    The company’s security services include email, firewalls, endpoint and server protection and its clients extend across all vertical industries, ranging from small businesses looking for a private cloud through to multi-branch multinationals needing to connect multiple sites, offices, and facilities.

    “When we identify partners that are a good fit for our business, we always align to market-leading technologies and partners. It’s a methodology we apply right across our technology stack,” says Wayne D’sa, CEO at CipherWave.

    “Nutanix offered a modern approach to infrastructure, the managed services we needed, and the assurance that they could emulate and even better the success of our existing cloud at an uncontested cost.”

    According to CipherWave, the need to refresh the infrastructure supporting its private cloud was multifaceted; firstly, it wanted to modernise the environment for its own needs and answer the calls of its reseller partners for a private cloud or virtual datacentre environment they could self-manage and build solutions around to on-sell to their own customers.

    It also says the company has seen a growing need amongst customers for DRaaS services, hybrid cloud solutions, offsite backups and data replication services, and interest in its IaaS offerings – all of which Nutanix said it could support.

    “Nutanix just made sense,” adds D’sa. “They deliver on our partner’s need to have a cloud environment that supports a multi-cloud approach and directly interfaces with a private cloud like AWS or Azure and their SaaS products. It’s really a solution that integrates into any cloud, and it is one we can bolt our own services, for example, our extended security portfolio.”

    Another major factor supporting CipherWave’s move was its ability to maintain the flexible cloud pricing it offers clients, as the Nutanix environment doesn’t add any additional complexity to these structures.

    To date, CipherWave’s customers have migrated to the new environment without any disruption to their operations.

    D’sa says the data migration has been so seamless for clients that it’s been a case of moving houses without realising your furniture is already in your new home.

    “It has been an incredible journey we have walked with CipherWave. The company knows exactly what they are after in a partner and are always thinking about tomorrow – making the need for a scalable and reliable infrastructure a top priority. I am looking forward to the future this partnership will yield and the new markets that CipherWave is looking to grow its cloud into,” says Rowen Grierson, Sales Director Sub-Saharan Africa, Nutanix.
  • R
    Raymond
    Wells Fargo software analyst Michael Turrin was on Tech Check on CNBC on Tuesday and gave a positive outlook. He said the fundamentals of software are holding up quite strongly and the trend towards digitization isn't changing. Most software companies are reporting strong earnings with the report from Oracle yesterday just the latest example. With stock prices down a lot across nearly all companies, he said valuations are now compelling.

    NTNX is a stock that Wells likes. In Q1 they bought 37,000 shares, and they owned a total of 130,000 shares as of March 31. Based on Turrin's presentation it sounds like they're still buying now.
  • R
    Raymond
    Oracle has reported its results for the quarter ended May 31. The stock is up $9 in after hours trading Monday after the company posted strong results in hybrid cloud computing. This tends to indicate that things remain on track with NTNX. NTNX is down because of a bear market and a temporary problem with supply chain issues at hardware partners. The long term fundamentals of the business remain solid.
  • R
    Raymond
    Much of the decline in the stock price after the last earnings report was due to short selling. Short interest increased from 5.7m in mid-May to 8.2m at the end of May. These short sellers will have to buy to cover at some point.
  • R
    Raymond
    highlights from William Blair Growth Stock Conference
    New CFO has been at NTNX for 5 years in various roles, was at Goldman Sachs for 8 years before NTNX

    Focus now at NTNX is on profitable growth, getting to sustainable free cash flow generation and profitability

    They see a big opportunity ahead for NTNX

    Purchases of NTNX software are often made at the same time as hardware purchases, if there are supply chain issues with hardware partners this can impact NTNX. Q4 earnings call will be at the end of August. At that time they will provide an update on how the supply chain problems at their hardware partners are affecting their timeline for getting to profitability.

    Much of what enterprises are doing now requires the ability to move workloads seamlessly between on-prem and the cloud, something that NTNX is best equipped to enable - doesn't matter what cloud you're on or if you're on multiple clouds, NTNX products can handle it.

    You have startup companies now thinking that they want to run everything in the public cloud. But these companies come to realize that as they scale up, the public cloud becomes expensive, and they start thinking that the public cloud is not the right place for all workloads, and they need a more hybrid (NTNX) approach.

    About 80% of enterprises see hybrid cloud as the operating model they will be using.

    The retention rate with customers for NTNX is over 90%.

    They are gaining market share against VMWare.
  • R
    Raymond
    The CEO of Cisco was on Squawk on the Street on Thursday. He said Cisco is starting to see some positive signs in the supply chain situation. Any positive movement in this area should also be affecting NTNX hardware partners.

    NTNX Q4 earnings call will be at the end of August. At that time they will provide an update on how the supply chain problems at their hardware partners are affecting their timeline for getting to profitability. We should be seeing some continued improvement in the supply chain situation between now and then.
  • S
    Superboeren
    It goes without saying that the results of delayed purchases due to supply chain issues and sales force attrition were terrible, particularly the optics of it with DW leaving. It introduces risk to the middle long financial path as laid out on Investor Day. The big question of course is if the increase in backlog and delay of purchase is a matter of future pent-up demand that rights itself for the next few quarters or partially lost business, not as much to direct competitors but directly to the cloud. RR explained that the delayed purchases only happened in the last few weeks of the quarter (in April). This came across like a stretch, albeit may be true, as he stated in previous quarters that ntnx saw no impact, but he also did not mention the indirect exposure that ‘a good chunk’ of billings came from new hardware purchases of customers who then would buy (or already include) ntnx software. Of course we all knew this but disregarded the impact due to soothing comments. Apparently, this all changed suddenly at ntnx’s hardware partners Supermicro, HPE, Dell, Lenovo etc. Well, not Dell, as they reported a fine quarter for servers although they reported elevated backlog for the upcoming quarter. Lenovo also report decent results but did not comment specifically on servers. Supermicro seemed to have performed OK so far with no comment on imminent shortages. HPE reports this week. On the other hand, sentiment in the channel seemed favourable in the first quarter with no explicit mention of imminent supply issues for the company. VMW reported a shortfall of results but no detail due to the take-over so we don’t know what drove this. So it’s unsettling that ntnx saw such a drop-off in billings and for a company that has a history of glitches any credit for improvements in the past two years are punished now with a steep sell-off. If billings dropped off in the last three weeks then it’s prudent for management to extrapolate it out with a large safety margin. The ship is wobbling again and the fog is dense so there is great risk staying on course.

    It all leaves the taste of mismanagement and the feeling that it’s time to fold this company into a large customer base and established sales organization. The assets should be valuable to some organizations. We all know the potential acquirors by now, including chip producers that want to increase their software business alike VMW. That does not mean it’s going to happen but every single one of them should do an exercise of returns when monetizing ntnx assets. It’s front and center and everyone is watching. Offers are not made the next day and usually never disclosed unless accepted so we just have no insight. Bain will pay attention with their fully informed front-row seat because if there are no takers when the stock is this low then they may either swoop in with a last minute lowball or Bain would be worried about an exit strategy for ntnx if the standalone option fails. There was this rumor and I’m sure they have their range set but there is no benefit frontrunning an offer if the rumor has merit. At least, that’s how I think about it. If there is interest for several parties than it makes sense to include a go-shop provision with a set minimum bid increase (say $3-$5). The new CFO can run that perfectly with her background. I do have a sense that the time is now for ntnx to consider a bid, particularly because the public market seems like the wrong venue and we also don’t know what Broadcom will do with the vSan assets (doubledown-lower pricing-shed?) Yet, these M&A daydreams may very well be desperate dilutions to hang in there with misguided hope. Prudent investors (which is not me) will tell you that incurred losses do not matter for today’s investment decision to either stay invested or sell and move on. The latter is particularly attractive because there are so many well-managed companies traded at discounted values.
  • t
    time
    Bot 1000 at $15.00. Will sell at $20.50.
    Unless Bain takes em private higher.
  • R
    Raymond
    Ann Miletti from Allspring was on Squawk Box on CNBC on Monday. They believe we're approaching a bottom and have started buying. They especially like small caps right now, since these have gotten really hammered.

    On Dec 31, Allspring had a small position in NTNX, then they came in during Jan-Feb-March and bought close to a million shares. Milleti said today that they're looking out over the next 2-3 years, so they're probably continuing to buy NTNX, since the current supply chain issues will be resolved long before then. Allspring has around $70b under management, and they're in San Francisco, right in the backyard of NTNX. They probably know the company well.
  • S
    Superboeren
    Kudos for the Board of PSTG which threw out old management in time and put in Giancarlo a couple of years ago. Once again they blew revenue out of the water. Competence goes a long way.
  • R
    Raymond
    Kristen Bitterly from Citi was on Bloomberg-The Close on Wednesday. Her title is "Head of North American Investments". Cybersecurity is one of the sectors she's recommending to investors right now.

    In their most recent investor day presentation NTNX stated that they are adding new cybersecurity capabilities to their products. They consider data security a core strength. Their products can detect ransomware attacks and block them.

    NTNX is a stock that Citi likes. They bought 35,000 shares in Q1 and owned a total of 120,000 shares as of March 31.
  • R
    Raymond
    Sam Lynton-Brown, the strategist at BNP Paribas, is out with a note on Thursday: "We are positive on equities. Pricing is now too bearish, in our view. A recession could be avoided."

    BNP has been building a position in NTNX. They bought 33,000 shares in Q1, and owned a total of 86,000 shares as of March 31. Since they have a positive view on equities, I think it's likely that they're continuing to add to their position in Q2.
  • W
    William
    My god, how low will this go? we are back to 2017 levels when the company was highly unprofitable, had no clear future and was hemorrhaging cash. The company is worth so much more now, clear value proposition, on the precipice of profitability. I get that the market is correcting but this seems like cruel and unusual punishment. There was nothing to correct here...NTNX never benefitted from the Covid Market bump. I had cashed out a few months ago in the low 30's and made the mistake of buying back in when it hit $24 thinking that it would move back up. What a horrible mistake.
  • B
    Brian
    At the front of people's minds are supply chain issues and sales force attrition. Another angle to weigh the longer term risk/reward of continuing to hold NTNX is around the topic of hybrid-multi cloud as a strategic winner over the coming years. Is there anyone else out there that can offer a simple easy to use (aka invisible) "multi cloud" platform that can run apps seemlessly across public clouds (i.e. AWS, Azure and GCP) and an on-prem private cloud? Is there value in that solution long term?

    Naturally AWS, Azure and GCP are working on or already offering solutions that allow customers to move their apps across these service providers' respective private and public cloud stacks. But I don't imagine there's a push or momentum to facilitate running said apps across each competitor's platform.

    That's where NTNX seems unique. The question is - do customers really value this strategy ... or does being siloed with a single cloud (private/public) for a set of apps work well enough for them. If the former, then you'd think the market is going to come to NTNX over time. If the latter, then NTNX will be fighting headwinds.

    (I know Azure and GCP are still on the roadmap, with AWS the only public cloud currently GA'ed by NTNX. Azure and GCP are presume GA'ed in the future).
  • R
    Raymond
    Nutanix, a specialist in hybrid multicloud computing, has announced that BUPA is harnessing Nutanix solutions to address performance, scalability and management issues impacting its business-critical Citrix environment that supports more than 5,000 users.

    These issues were quickly resolved by migrating from a legacy infrastructure to the Nutanix Cloud platform and Nutanix Acropolis Hypervisor (AHV). Beyond this initial phase, BUPA has also begun using Nutanix Calm to fully automate management of its DaaS computing system and allow for rapid deployment of this and other workloads to any cloud in accord with long term multicloud strategy.

    With DaaS computing seen as a business-critical application by leading health insurance and healthcare provider BUPA, the company had invested heavily in a state-of-the-art Citrix solution tailored to meet its exacting requirements. The legacy infrastructure supporting that software, however, was approaching end of life and its replacement needed to address a number of long-standing issues.

    Scalability, in particular, had become a real headache requiring consensus across multiple stakeholders just to get approval for minor upgrades and changes. Even then, those changes could still take days or sometimes weeks, severely limiting BUPA’s ability to respond quickly to rapidly moving business demands. Added to which it was a very complex setup calling for expert skills across multiple disciplines just to keep the infrastructure lights on, let alone enhance or develop it further.

    The BUPA tech team decided that switching to the Nutanix Cloud Platform would be best for its Citrix DaaS solution. The configuration chosen called for Nutanix clusters for each of two sites, to support the 3,000 existing DaaS computing users whilst also allowing for future growth. These were quickly delivered then subsequently deployed across two sites to meet rapid failover and disaster recovery requirements.

    Users saw a marked improvement in desktop performance straight away and behind the scenes, Nutanix and Citrix worked to optimise the environment. More than that, the whole system was a lot simpler and easier to manage with on-demand scaling available at the press of a button and full end-to-end visibility from a single console. Support too has been streamlined with just one point of contact for all issues, whether hardware or software related, including the hypervisor. All can now be managed from the same console, eliminating the need for expert skills thereby freeing up staff to concentrate on other tasks, including plans to use Nutanix Calm to automate all aspects of the application lifecycle.

    Rick Jagger, technical services manager, BUPA, said: “By migrating our DaaS computing environment from a legacy 3-tier platform to Nutanix we’ve gained a lot more than just a more scalable, performant and agile infrastructure. We’ve kept operational costs down by using the AHV hypervisor and further lowered support overheads with Nutanix Calm which is enabling us to both automate day to day management tasks and move forward with confidence to a multicloud future.”

    Like most large enterprises BUPA expects the Cloud to play an increasing role in its IT strategy. It is already looking at using Calm to enable it to redeploy rather than upgrade applications in place. BUPA is also impressed by Calm’s ability to quickly deploy DaaS computing and other applications onto any cloud and, where possible, balance workloads across what could, eventually, become a global multicloud network supporting other parts of the BUPA business.
  • R
    Raymond
    Rick Rieder, one of the top people at Blackrock, was on Bloomberg-The Open on Friday. Rieder likes software stocks right now, where valuations have come down a lot. NTNX is a stock that Blackrock likes. They bought around 120,000 shares during Q1, and they owned a total of around 10m shares as of March 31.