Oppenheimer initiates Nutanix stock coverage with Outperform rating

Investing.com - Oppenheimer initiated coverage on Nutanix (NASDAQ:NTNX) Monday with an Outperform rating and a price target of $90.00, representing a 36% upside from the current price of $65.91.

The investment firm cited Nutanix as a beneficiary of the industry’s shift toward HyperConverged Infrastructure (HCI), positioning the company for growth in this expanding market segment. This aligns with Nutanix’s recent performance, as the company has achieved 18.11% revenue growth over the last twelve months.

Oppenheimer highlighted Nutanix’s opportunity to displace VMware over time, noting that VMware faces customer resistance during renewals due to price increases, creating an opening for Nutanix to gain market share. InvestingPro data shows Nutanix boasts impressive gross profit margins of 86.81%, giving it financial flexibility to compete aggressively in this space. InvestingPro also reveals the company is trading at a favorable PEG ratio of 0.42, suggesting potential undervaluation relative to its growth prospects.

The firm also pointed to Nutanix’s potential to capitalize on demand for unstructured data used in building and delivering AI applications, despite a recent slowdown in U.S. Federal business and longer-than-anticipated timeline for expansion into standalone virtualization. Investors should note that Nutanix’s stock has taken an 8.96% hit over the last week, potentially creating an entry opportunity ahead of its upcoming earnings report on November 25.

Oppenheimer expressed confidence in Nutanix’s long-term virtualization and AI inferencing opportunities, suggesting the company could see its multiple re-rate higher as it continues to exceed the industry’s Rule-of-40 metric. With a market cap of $17.85 billion and analysts setting price targets as high as $95, Nutanix remains well-positioned in the competitive cloud infrastructure space. For deeper insights into Nutanix’s financial health and growth prospects, InvestingPro offers a comprehensive research report with expert analysis on what really matters for this stock.

In other recent news, Nutanix reported impressive fiscal fourth-quarter results, with revenue growth of 19.2%, surpassing the consensus estimate of 17.6%. The company’s operating income margin reached 18.3%, exceeding expectations and surpassing its guidance by 230 basis points. KeyBanc maintained its Overweight rating for Nutanix, with a price target of $95.00, reflecting confidence in the company’s strong performance. In anticipation of the upcoming fiscal first-quarter 2026 results, Goldman Sachs reiterated its Buy rating and $95.00 price target, expecting Nutanix to meet its 14.2% revenue growth guidance.

Meanwhile, Northland downgraded Nutanix from Outperform to Market Perform, citing concerns over potential challenges in capturing VMware customer migrations due to increased competition from Red Hat. Additionally, Nutanix has renewed its alliance with Leostream to enhance virtual desktop infrastructure solutions, integrating the Leostream Platform with Nutanix AHV enterprise virtualization. The company also announced the appointment of former Intel CTO Greg Lavender to its board of directors, bringing over 40 years of technology experience to the team. These developments highlight Nutanix’s strategic moves and market positioning.

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