NTNX

Nutanix Inc

TMT


Presented:01/15/2019
Price:$48.74
Cap:$8.95B
Current Price:$64.15
Cap:$17.01B

Presented

Date01/15/2019
Price$48.74
Market Cap$8.95B
Ent Value$6.75B
P/E RatioN/A
Book Value$2.41
Div Yield0%
Shares O/S183.63M
Ave Daily Vol2,621,860
Short Int6.39%

Current

Price$64.15
Market Cap$17.01B
Nutanix, Inc. engages in the provision of enterprise virtualization and storage solutions. It specializes in cloud operating system that converges traditional silos of server, virtualization, storage, and networking into one integrated solution and unifies private and public cloud into a single software fabric. Its products are offered through the Acropolis and Prism brands. The company was founded by Dheeraj Pandey, Ajeet Singh, and Mohit Aron in 2009 and is headquartered in San Jose, CA.

Publicly traded companies mentioned herein: Alphabet Inc (GOOG/GOOGL), Amazon.com Inc (AMZN), Dell Technologies Inc (DELL), Lenovo Group Ltd (992 HK), Microsoft Corp (MSFT), Nutanix Inc (NTNX), Oracle (ORCL), SAP SE (SAP), ServiceNow Inc (NOW), VMware Inc (VMW)

Highlights

The presenter is long shares of Nutanix (NTNX) and sees the potential for the company’s market value to rise substantially over the next 3 - 5 years. Longer-term, NTNX could be worth $50B (up from ~$7B today) if the evolution of data centers and “cloud” continue on the current trajectory. This is because customers (including most Fortune 2,000 companies) will continue to adopt its hyperconverged infrastructure solution, which integrates (virtualizes) compute, storage, and networking in scale-out clusters. This solution is, according to the presenter and customers of NTNX, based on reviews/feedback - far superior to the legacy 3-tier environment (silos of servers and storage, along with the need for separate management tools and processes). Its transition to a pure software play is well underway (hardware sales have declined by 70% recently), and its win-rate versus VMware is 90%. As clients spend more with Nutanix, its revenue growth should accelerate and be fueled by higher margin software sales, justifying an improvement in its multiple to sales (EV/Sales). Looking out to 2022, NTNX is trading sub-3x the presenter’s revenue forecast. At 6x - 7x sales, which is where the stock trades on a current-year and trailing basis, respectively, there could be at least 100% upside for patient shareholders over 12 - 24 months.

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