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Nutanix, Inc. (NTNX)

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26.04+1.33 (+5.38%)
At close: 04:00PM EST
25.87 -0.17 (-0.65%)
After hours: 06:14PM EST
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  • R
    Raymond
    Kristen Bitterly from Citi was on Bloomberg-The Close on Friday. Her title is "Head of North American Investments". She's bullish and specifically mentioned that she likes cybersecurity stocks right now. As of the most recently reported data, Sept 30, Citi owned around 250,000 shares of NTNX, so they like the company, which is adding more cybersecurity features to its products all the time.

    NTNX had above average volume on Friday with some large blocks trading in the last 10 minutes, the time when institutions do most of their buying. Citi may have been one of the institutions in there buying Friday afternoon.
  • R
    Raymond
    Allspring Global Investments, which has $80b under management, has filed their 13F. They did not own any shares of NTNX on Sept 30, then they came in as a new investor in Q4 and bought 70,000 shares. Allspring is in San Francisco and probably knows NTNX well. They obviously feel that now is the time for this stock.
  • R
    Raymond
    Bill McDermott, the CEO of Servicenow, was on Squawk on the Street on CNBC on Thursday. Servicenow just reported a great quarter and the stock is up a lot today. McDermott said that digital transformation will be a $10.7T market between now and 2025. He said that this will be "the biggest opportunity of our lifetime". He said that rising interest rates will have no impact on his business. He said that a customer told him that technology isn't a priority for his business, it runs through all the business.

    NTNX reported a strong quarter last August, they reported another strong quarter last November, and everything that I'm seeing indicates that there is going to be another strong report next month. As far as I can tell the stock price is down because investors are panicking over higher interest rates. But Bill McDermott said that rising interest rates will have no impact on his business, and I don't think they're going to have any impact on NTNX's business.
  • S
    Superboeren
    Recent performance reiterated that the stock moves with market momentum and rotations with a high beta on low volume. Sometimes major moves are just on 300k volume. I expected that below $30 the funds would step up and provide a put but it has not worked out that way. They nibble a little more each quarter but that is not enough to provide any defense. Small investors have pretty gone into hibernation so it’s the algos that have free reign. It begs the question why funds and retail have not stepped in and the answer may be that they don’t see enough value to stem the slide. Also, why have new investors and retail not jumped in to start a new position? The answer could be that NTNX remains a complex story to understand. At a first glance, investors look for growth in tech stocks. (Not always though as bottom-line losses have been excessive.) Although ACV growth and underlying growth has remained strong throughout the years with a notable uptick in last quarter (ACV growth at 31%), investors often just look at revenue growth sub-10% in recent years and that gets nobody excited. Apparently, it does not matter that $1.3 billion is stuffed into deferred revenue, earned but not recognized yet, which is worth almost a year of annual revenue. That will be recognized over the next four or so years. If this is all too hard to understand then new investors may look at the end-market growth to get a sense of market opportunity. Well, that is not so easy either. Not only entered the hyperconverged market only recently the Mature stage in which it supports a full range of workloads, the initial excitement of a couple of years back has waned and after a disappointing phase (which is natural in the hype cycle --- see earlier post) it’s rebuilding energy in which HCI now also seems to be a major gateway to the Hybrid Cloud, Edge, AI/ML workloads that are just now starting to gain real momentum. So what is the end-market growth? Again, estimates are all over the place. A simple search online yield several CAGR estimates for the next couple of years; 16% (Gartner), 26% (Researchandmarkets), 27% (Emergen) 24%, 20%. Where do you hang your hat on? Gartner is the one that NTNX management uses (NTNX is 100% SW). That is HCI software growth whereas the others seem to be both SW+HW. As software has a higher growth rate it would make intuitive sense that the other growth rates should be even higher than the stated estimates for an average in the mid-20% growth, almost 10% points higher than Gartner. That is a big difference and as I don’t have access to the reports so I cannot see the details. It could of course be that Hybrid/Edge/AIML makes up that difference, which is not included in Gartner and hard to quantify at this point. It also may be the difference in geographies. Either way, the estimates are all over the map while NTNX management follows Gartner (who also provides the Magic Quadrant) that provides a comparatively low bar for management to be conservative. The Gartner estimate is from January last year so maybe they revise it annually and we’ll see a revised estimate shortly. My point is not to show that the market growth may be higher than NTNX’s market estimate but the point is that for a new investor nothing is straightforward and perceived risk comes at a large discount due to misgiven forecasts of previous management. The proof will be in the pudding and although the dessert menu looks increasingly appealing for those who dig in a little deeper, we will have to wait until the numbers show continued revenue acceleration from multiple tailwinds to convince new investors and retail to pile in. I thought that moment was last June after Investor Day with it’s forecast, and again last quarter that showed impressive numbers, but I was wrong. Investors are still on the sidelines needing more time to feel comfortable stepping in. Once that happens that algos flip and will ensure the follow-through. On the other hand, the stock has a history of being unpredictable so who knows when and if the bulls start running.
  • R
    Raymond
    LONDON--(BUSINESS WIRE)--Jan 25, 2022-- Hewlett Packard Enterprise (NYSE: HPE) today announced that CDW, a leading global managed service provider, has selected the HPE GreenLake edge-to-cloud platform to enhance its core UK cloud suite of products called ServiceWorks. HPE GreenLake will enable ServiceWorks to meet increasing demand, accelerate deployment of new services and improve overall customer experience for its Desktop-as-a-Service platform.

    CDW is a leading multi-brand technology solutions provider to business, government, education and healthcare customers in the United Kingdom, the United States, and Canada. CDW ServiceWorks provides a highly reliable, infrastructure-as-a-service platform for customers who need to run core business services in a stable, accessible and secure fashion. CDW wanted to expand its ServiceWorks platform to offer increased flexibility and meet growing customer demand while avoiding costly over-provisioning and unnecessary upfront capital investment. The platform also needed to scale to meet the demand for its Desktop-as-a-Service product, which increased rapidly during the COVID-19 pandemic as more customers required solutions to support remote working for their employees.

    “We were looking for a solution that would quickly scale performance and capacity to meet our customers’ business demands. HPE GreenLake does just that, delivering the necessary flexibility and reliability across our cloud and Desktop-as-a-Service solutions,” said Chris Lillie, Head of Cloud Operations, at CDW UK. “The HPE GreenLake financial model allows us to pay for what we actually use. That means we can accurately match our costs to revenue and deliver improved predictability, visibility and control, while investing more in the continued development of our service portfolio for our customers.”

    In the past, CDW had procured its hardware as an annual capital expense and would previously hold a buffer capacity for emergency use to meet unexpected customer demand. Now with the HPE GreenLake platform, CDW has transformed the process to a flexible, scalable model with faster time to market, offering immediate deployment when and where it’s needed for every new customer. HPE and CDW work closely together to monitor and manage ongoing cloud capacity using HPE GreenLake Central to manage costs, utilization, compliance, and security across CDW’s cloud and desktop platforms. From a financial perspective, the pay-per-usage model eliminates upfront capital investments, improves visibility and predictability, and preserves cashflow with closer alignment of costs and revenues.

    “HPE GreenLake is a highly flexible cloud platform because it offers the ability to scale for extra demand allowing CDW to grow its business with full financial flexibility and predictability and enabling them to meet customer demand,” said Sue Preston, Vice President and General Manager, HPE Pointnext and HPE GreenLake, UK, Ireland, Middle East and South Africa at HPE. “Our collaboration with CDW further enhances our global partner ecosystem for HPE GreenLake and provides customers with more choices for their different applications and workloads.”

    The HPE GreenLake edge-to-cloud platform is a powerful foundation for accelerating digital transformation by delivering cloud services that can run on-premises, at the edge, or in a colocation facility. Today, HPE GreenLake has grown to $5.7 billion USD in total contract value, has 900 partners selling the platform, and 1,250 enterprise customers across 50 countries in all industry sectors and sizes, including Fortune 500 companies, government and public sector organizations, and small and midmarket enterprises.

    The HPE GreenLake edge-to-cloud platform runs on HPE Infrastructure and Nutanix software. This is following the recent announcement that Nutanix and Hewlett Packard Enterprise has expanded its partnership to accelerate hybrid cloud and multi-cloud adoption with a new database as a service offering delivered through HPE GreenLake.
  • S
    Superboeren
    IBM reported that Red Hat revenue growth YoY was 21% so the demand backdrop is good and it may have some trickle down effect for NTNX with the first real contributing quarter of the partnership (Red Hat has about a $4-$5 billion annual revenue run-rate). And to just goose the eternal marry-go-round of potential acquirers, IBM stated that it has $20 billion in 'flexibility' for acquisitions for the next three years (nothing imminent though IMO).
  • R
    Raymond
    January 26, 2022 -- SAN JOSE, Calif.--(BUSINESS WIRE)--Inspur Information, a leading IT infrastructure solutions provider, today announced it was selected by Bulutistan, the leading cloud service provider in Turkey and a top 5 provider in the EMEA region, to upgrade the company’s cloud infrastructure. Bulutistan faces rapid growth in its public cloud services that cannot be met by traditional cloud computing architecture. Inspur Information’s hyper-converged solution based on Inspur’s NF5280M5 server provides the extreme scalability Bulutistan requires in addition to a 30% reduction in operational costs.

    The three-tier architecture of traditional data centers (computing, storage, and network) is stable and reliable, but it is difficult to expand and requires complex equipment and that is time consuming and difficult to manage. It is not suitable for the next-generation data center cloudification that Bulutistan requires. Instead, the company needed a pooled IT infrastructure platform with maximum capacity and scalability that is also efficient, easy to adjust and manage, and highly stable.

    Understanding Bulutistan’s requirements for extreme scalability, flexibility, and stability, Inspur went through an extensive testing process and identified Nutanix's distributed storage software as the most effective way to integrate computing and storage. The Inspur hyper-converged solution and NF5280M5 server paired with Nutanix software would allow Bulutistan to upgrade to a customized cloud server platform with full-stack management analysis that is flexible and allows for unlimited expansion as an on-premises integrated solution. This logically simplified architecture is the key to why Bulutistan selected Inspur to upgrade its cloud infrastructure.
  • s
    stephen
    Can I just say I hate this stock?! Been in it 5+ years with nothing to show for it. My fault and I accept responsibility. Just can’t believe how this stock price continually goes down regardless of what’s happening in the market or how their earnings reports come out. Two reports ago was apparently good and stock initially up to $44. By the time three months passed for the last earnings report, stock price was lower than what it was before they previously reported. The last report was apparently good and yet the stock price is now at $24!!!! I get the general market has taken a lot of stocks down lately, but, NTNX never participated in the previous market rally. I feel it doesn’t matter what they report quarterly, the stock price will just always and eventually go down. Such a huge disappointment and a waste of a market they are in. The ownership/management haven’t capitalized one bit on this space and before you know it, that opportunity will be gone forever. Fire them all and hit reset. New group couldn’t possibly do much worse.
  • S
    Superboeren
    RR mentioned again in an article today that the Clusters Azure with MSFT is under development. This is taking a long time. I'm not a tech person but they are working on that now for more than a year and I figured that after the AWS launch 18 months ago Azure would follow in relatively short order. No idea if there were hick-ups. Kuman mentioned in a September interview that it was in preview mode so that is around 5 months or more by now. Launching it seems timely as interest momentum in Clusters AWS in the market seems high, albeit that sales are not rocking yet. RR mentioned a joint go-to-market effort with MSFT so maybe newly hired CRO DD wants to include his input (on the job for a good month now). I'm curious about this joint GTM and if it's a bigger push than what AWS turns out the be. AWS of course also partners with VMW Outposts so they are betting on multiple horses. Anyway, it looks like the MSFT is going forward but I'm eager for a launch soon. I thought it was bad that they did not launch late last year as they had hinted at in the past, they need to launch before the next earnings call. The Quiet Period starts by the end of this month so I hope and expect that we'll see that announcement in the next two weeks.
  • R
    Raymond
    Over half (64%) of organizations plan to operate a multi-cloud environment within three years. However, the challenges of cloud security, data integration, and cost remain, according to Nutanix’s latest survey.

    The vendor polled more than 1,700 IT decision makers globally for its fourth annual Enterprise Cloud Index to measure enterprise progress on cloud adoption. And it found organizations on average use 1.6 public clouds, up from 1.1 a year ago when more focus was on hybrid clouds.

    “Organizations are increasingly leveraging multiple clouds to achieve the agility and flexibility they need to effectively compete as well as drive innovation into the market,” Monica Kumar, SVP of product and solutions at Nutanix, told SDxCentral.

    The amount of data that enterprises have is huge, so “you’re not going to have all of your enterprise data living in a single place - it’s never gonna happen,” she added.

    In addition, large enterprises are more advanced in the multi-cloud journey. The report found 57% of companies with 5,000 or more employees already deployed a multi-cloud strategy.

    This shows that “one size does not fit all when it comes to deploying applications,” Kumar said. “Customers are choosing a cloud smart approach and choosing the right cloud for the right application.”

    Organizations can stay ahead of the evolution of technology by giving their network proper infrastructure with this white paper from Forward Networks.

    Despite more organizations moving toward multi-cloud, challenges remain in navigating the environment. Managing security, data integration, and cost across cloud borders were among the top multi-cloud challenges cited by respondents.

    Enterprises continue to rank improving security posture as a top IT priority. In this year’s index, of the 91% of respondents that moved applications between infrastructures during the past year, 41% said they did so for security reasons.

    On top of security, the majority of respondents also agreed that succeeding with multi-cloud requires simpler management, and 83% of them said that the hybrid multi-cloud is the ideal operating model to address the challenges.

    Nutanix has been pushing the hybrid multi-cloud operating model. It “provides unified operations and management across private and public clouds,” Kumar explained, so the model enables customers to move data, applications, and licensees across on-premise and multiple cloud environments, and also to reuse common IT constructs, processes, and skillsets.

    As it grows its hybrid multi-cloud technology, Nutanix wants to be the Airbnb of the hybrid cloud.

    “What we are is a hybrid, multi-cloud platform company with security built in,” Nutanix CEO Rajiv Ramaswami told SDxCentral in an earlier interview. “In some ways, we are like an Airbnb here. We have a platform, customers can come to our platform and use it and run in any cloud they want. And if you’re a cloud provider, you can come to us, use our platform and go capture those enterprise customer workloads.”

    Cloud Is Not a Destination
    Nutanix’s index also showed that 91% of respondents said they have moved one or more applications to a new IT environment over the last 12 months. However, 80% of them reported moving apps can be time consuming and costly, while 77% said that workload portability is a significant or moderate challenge.

    After so many years of developing cloud computing, organizations are still dealing with a lot of complexity including multi-vendor, multi-location, multi-application, and multi-workload, Kumar pointed out.

    Kumar suggested starting with an application-centric approach for multi-cloud deployments.

    “It’s becoming clear to us that cloud is not a destination. It is an operating model,” she said. “It’s a multi-cloud world out there. We believe a hybrid multi-cloud IT operating model is the best one to go with because one size of cloud doesn’t fit all.”
  • S
    Slaphappy
    Hopefully once we show we're cash flow positive "this year" (If still on track) this thing will get upward momentum. Then profitable next year. This is nonsense what's going on. It's so over sold it's beyond sickening.
  • J
    Jesse
    Would be a great time to announce GA of Clusters on Azure after those MSFT earnings.
  • R
    Raymond
    One of the top stock market analysts, Paul Hickey, was on Power Lunch on CNBC on Monday. He said that his indicators are showing that the stock market is the most oversold it's been since the Covid crash in March 2020. He said that the S&P, Nasdaq, and Russell 2000 are all looking like they'll be down 10% in January, which is rare. He said 10% down months have only happened 4 times in the history of these indices - Oct 87, Aug 98, Oct 08, and March 2020. He said a year after these months, all three indices were higher all 4 times. When the market gets this oversold, it always bounces back.
  • R
    Raymond
    Russell Investments in London England has filed their 13F for Q4. They bought around 45,000 shares of NTNX during the quarter, and owned a total of around 315,000 shares as of Dec 31. They obviously like the stock and are most likely continuing to buy given where the stock price is right now.
  • R
    Raymond
    Katy Huberty -- Morgan Stanley -- Analyst
    Arvind, can you comment on whether the recent pullback in software valuations increases the likelihood that you might look at doing M&A this year.

    Arvind Krishna -- Chairman and Chief Executive Officer, IBM
    M&A has to have an economic benefit for our company and our shareholders. I've said before, we have a little over $20 billion of flexibility over the next three years. So, I'll just leave it at that.
  • R
    Raymond
    Citrix stock is up $5 today as it appears that the company is about to be bought out. I recently added to my position in NTNX because I wouldn't be surprised if NTNX is the next cloud stock to be acquired.
  • R
    Raymond
    Institutional investors will be filing their 13Fs for the Oct-Nov-Dec quarter over the next month. Some of the smaller firms have already started filing. The Cutler Group, which has around $1b under management, bought 7,500 shares of NTNX during the quarter, and owned a total of 35,000 shares as of Dec 31. Cutler is in San Francisco and probably knows NTNX well, so this is a nice vote of confidence.
  • R
    Raymond
    According to Baird research analyst Rob Oliver, private equity firms are aggressively shopping for mid-sized enterprise software companies to buy. Oliver believes that the recent sell-off in the group could trigger a buying spree in 2022. In a research note Wednesday, Oliver notes that deal activity in the software sector hit new records in 2021, and he expects further acceleration in the buyout market in 2022.

    “Given the underperformance of public software stocks over the past year amidst favorable underlying demand trends, a greater number of ideas are closing in on conditions/attributes that have garnered PE buyout interest in the past,” he writes.

    Since 2012, he reports, there have been more than 40 acquisitions of public software companies, with typical deal sizes in the $3 billion to $4 billion range. Since 2019, the average deal size has increased to the $4 billion to $5 billion range.
  • R
    Raymond
    13Fs for Oct-Nov-Dec from institutional investors will be coming in over the next month. Some of the smaller firms have already started filing. Diversified Trust Company, which has $2b under management in Memphis, bought 6,000 shares of NTNX during the quarter, and owned a total of 33,000 shares as of Dec 31. NTNX had a good investor day presentation in June, the quarterly results they reported in August were good, and the quarterly results they reported in November were good. All the analysts that track the market are saying that digital transformation is accelerating, and I'm expecting another good quarterly report next month. NTNX has good support from institutional investors, and as sales and the number of customers continue to increase, the stock should move higher eventually.
  • D
    Dutch Trader
    Enterprise value is going to dip under 6B with an annual revenue of almost 1.5B unreal.