Nutanix (NTNX) Pass Through Hardware Transition Accelerated And Nearly Behind The Company - KeyBanc

KeyBanc analyst, Alex Kurtz, reiterated his Overweight rating on shares of Nutanix (NASDAQ: NTNX) after the company delivered strong overall F4Q18 results with upside to billings at $395M (vs. consensus at $372M), aided by a strong DoD win and gross profit at $236M vs. consensus at $222M. The total revenue beat of $5M is less
relevant as Nutanix transitions out of pass-through hardware revenue, at 9% of billings this quarter vs. 17% last quarter.

The analyst stated "Offsetting these positive metrics were a higher F1Q19 opex guide by ~$10M and greater opex investment that will raise our FY19 opex estimate by $106M and drives our EBIT margin to -13% as Nutanix continues to pursue product and sales investments. The F1Q19 revenue guide was negatively impacted by an accelerated move to software only from hardware pass-through ($4M-$8M impact) and a higher bill-to-revenue ratio vs. consensus that accounts for ~$12M in higher deferred revenue".

No change to the price target of $68.

For an analyst ratings summary and ratings history on Nutanix click here. For more ratings news on Nutanix click here.

Shares of Nutanix closed at $56.60 yesterday.

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