By Senad Karaahmetovic
Shares of Nutanix (NASDAQ:NTNX) are up over 16% after the company reported very strong FQ4 results.
Nutanix reported a loss per share of $0.17, much better than the loss of $0.38 per share as anticipated by analysts. Revenue for the quarter came in at $385.5 million versus the consensus estimate of $355.3 million.
For this quarter, the company sees revenue in the range of $410 million and $415 million, which is better than the consensus of $372.63 million. On a full-year basis, the company guided to $1.77 billion to $1.78 billion in revenue, again better than the consensus of $1.66 billion.
"Our Fiscal 2022 results reflect strong progress on our subscription model with 27% year-over-year ACV billings growth and achievement of positive free cash flow, which we expect to be sustainable on an annual basis," said Rukmini Sivaraman, CFO of Nutanix.
A Morgan Stanley analyst raised the price target to $22 from $18 to reflect a strong beat but remained Equal Weight-rated "given number of management/organizational changes" and challenging macro backdrop.
"NTNX meaningfully outperformed FQ4 as supply chain improved and co saw better upsells/large deal activity. Co largely returning to AD targets on CF as a result of top line/incr cost discipline & stabilization of sales force," the analyst added in a client note.
A Needham & Company analyst also took note of strong results, which forced him to hike the price target by $5 to $25 on the Buy-rated NTNX shares.
"The company is seeing strong demand as customers invest in Digital Transformation, Data Center modernization and Hybrid Multi-Cloud initiatives. Importantly, the Renewals team is executing at a high-level, which we view as the linchpin for Nutanix delivering against its reiterated FY25 Free Cash Flow Target of "at least $300 Million," implying 10%-15% Margin," the analyst said to clients in a note.