Shares of former Wall Street darling Nutanix Inc. are on pace to lose almost a third of their value Friday, after the cloud-computing company delivered an extremely downbeat forecast.
“Ultimately, we think Nutanix has tried to do too much with too little for too long and this has caught up with it,” wrote Oppenheimer’s Ittai Kidron, who cut his rating to perform from outperform on Friday. “With the installed base accounting for about 70% to 75% of new bookings over the last two years it seems that penetration rates for the company’s core [hyperconverged-infrastructure] solution may be higher than we anticipated and newer solutions have yet to reach the necessary scale to drive overall revenue growth rates,” he wrote.
At least 13 analysts cut their price targets on Nutanix shares after the report, according to FactSet. Of the 22 analysts surveyed by FactSet who track the stock, 15 have buy ratings, six have hold ratings, and one has a sell rating. The average price target is $51.63, nearly 50% above current levels.Susquehanna’s Mehdi Hosseini said that the company’s commentary validated his bearish call on the shares.